Quick take
- Nobody can reliably pick the best crypto to invest in; past rankings are full of coins that later collapsed.
- Most altcoins and new cryptocurrencies fail or lose most of their value.
- Research supply, use, liquidity and who controls the tokens before buying anything.
TyrexCoin does not recommend coins. Here is how to think about the question instead.
Why "top 10 cryptocurrencies" lists change so much
A top 10 cryptocurrencies list is usually ranked by market value: price times circulating supply. It tells you which coins are large today, not which will do well. Several coins that were once in the top 10, including TerraUSD and its sister token LUNA, lost almost all their value within days.
Altcoins: what they are
Altcoins are any crypto-assets other than bitcoin. They range from large networks such as Ethereum to tokens launched last week. The newer and smaller the coin, the more likely it is to be illiquid, heavily controlled by insiders, or abandoned.
Seven questions to research any coin
- What does it do? Is there a working network or product, or only a roadmap?
- Who holds the supply? Large team and investor allocations can be sold into the market later.
- How is new supply created? High inflation dilutes holders.
- Where does it trade? A coin listed on one small exchange may be impossible to sell in size.
- Is the code audited, and can anyone change the rules or freeze tokens?
- Why is it being promoted? Paid influencers and "guaranteed" gains are red flags.
- What would you lose if it went to zero? Size the position accordingly.
New cryptocurrency launches
New cryptocurrency listings attract the most hype and the most fraud: "rug pulls" where developers drain liquidity, copycat tokens using a famous name, and presales that never deliver. If you can't answer the seven questions, you are speculating on a story.
A calmer approach
- Decide in advance how much of your money, if any, belongs in crypto at all.
- Prefer understanding one or two assets well over holding twenty you can't explain.
- Use the crypto profit calculator to see what a 50% or 80% fall would mean in money.
Common questions
What is the best crypto to invest in?
No one can know in advance. Rankings describe the past and are often paid promotions. Research any coin you consider and never invest more than you can afford to lose.
Are new cryptocurrencies a good investment?
Most new tokens lose value, and new launches are a common vehicle for scams. They are among the riskiest assets available.
What are altcoins?
Any crypto-asset other than bitcoin, from large platforms like Ethereum to small, speculative tokens.