I believe that one of the main doubts of crypto investors is how cryptocurrencies are selected in a professional manner and the decision whether they are good or not.

And since I don't like to keep it a secret, today I'm going to show you the 4 steps I use to choose the cryptocurrencies I'm going to invest :)

But calm down!

First of all, we need to understand what we are looking for in the investments we are making, because without a plan you will hardly have any idea when, or if it has been successful.

In other words, what you're looking for is your investment philosophy, and if you haven't already maybe we can consider that you're not really investing yet... you're probably just speculating.

My investment philosophy is based on seeking asymmetric opportunities between price and value within the crypto market, which in my view today, is still quite asymmetric.

Isn't it clear? I'll explain later, come with me!

An asymmetric opportunity is an opportunity where you have a much greater chance of winning than your chance of losing. It's not a gain that will come in a week.

It is not a gain that will come without any risk. It's not a casino. It's no bet.

What I look at when I look at and analyze cryptocurrencies is the potential for gain that I may have given your risk. This, in the financial market, is known as the risk-return relationship.

Going into the second part of the sentence we come across the words price and value.

At first they seem to refer to the same thing, right? But no!

They have a big difference, and it's on that difference that I also base my investment decisions.

Price is how much the market is saying at that moment how much something is worth quantitatively, that is, how much the price is on the label of an outfit. Value is reflected in the utility that the good generates.

"The price is what you pay. Value is what you take." - Benjamin Graham"

The intrinsic value of the assets will not necessarily equal the screen price.

The graph above shows the difference between the price set by the market (in blue) and the intrinsic value (in purple).

It is interesting to note that the blue line (of price) is much more volatile, in times of crisis and euphoria the price will vary a lot. However, the specific time when the price is below value is what we seek to make investments.

In the long term (which is the investment horizon) I believe that more and more the price will arrive and remain on par with the value of the asset.

Besides, I don't try to get all the opportunities right, but I need to get some asymmetric opportunities right consistently.

This consistency in hits will generate a return that will compensate for the mistakes, which in turn need risk management to limit losses. Now let's go to the four steps:

Step 1: Choose which crypts to study

There are now over 10,000 different cryptocurrencies, if you want to study each one of them by choosing randomly you won't have enough time to understand them all, and you'll waste a gigantic time with many that don't make any sense, that don't deserve your time.

So it is necessary to have a sieve, to understand how to separate the cryptocurrencies that can be good, from the cryptocurrencies that straight away make no sense, like a sieve.

But how do you do that?

First you need to understand what are the main pains in the market, such as the number of hacks in bridges that connect crypto market networks.

Then you need to identify which solutions, or if any, you want to solve this problem.

In the example, we have the "layer 0" sector, which wants to create a layer underneath the networks eliminating the use of bridges, which are big targets for hacks.

Besides understanding the market pains you, in case you want to discover interesting crypts for study it is interesting that you follow the primary and influential sources of the crypto market.

The primary sources are like, for example, Twitter and Blogs, which you can use to observe and understand where the great analysts and analysis houses are looking.

Examples of good accounts to follow on Twitter:

https://twitter.com/RyanWatkins_

https://twitter.com/hasufl

https://twitter.com/sassal0x

Examples of good blogs:

https://messari.io/dashboard

https://jumpcrypto.com/writing/

https://members.delphidigital.io/home

And of course the articles here from https://article.coinpayu.com have a lot of good stuff.

Step 2: Initial Analysis

After understanding the main pains, being able to map the crypts that seek to solve this problem and understanding what and where the leading analysts are looking at you already have a much smaller list of cryptocurrencies to analyze.

With this short list it is interesting that you start developing a profile, which is an initial analysis, focused on defining whether the in-depth analysis will be discarded or whether it is worth studying and spending more time on this asset.

Then you ask me: How do I know whether or not to discard an asset for further analysis?

You need to focus on two main points:

- Tokenomics

- Business Model

The tokenomics is the ability that the cryptocurrency has to value itself based on its activities, it is the ability of the crypto to collect value from its own operation.

Understanding the business model is understanding crypto as a company, which has customers, suppliers and competitors. The ideal at this point is to understand if she is better than her competitors.

Step 3: In-depth analysis

If the initial analysis has been promising, it is interesting to go deeper by producing an in-depth analysis of the crypt, going through every detail it has.

And also to create the moment within this analysis with a focus on finding reasons not to invest in this crypt (definition of the contraception of an asset is extremely important, because here we can mark the risks).

Going beyond what the 99% of people know here is the differential that you will build in your analysis, in this analysis use the following pillars for study:

- Further deepening in tokenomics

- Further deepening the business model

- Governance

- Security

This third step usually takes months of study.

Currently the largest cryptos and those that are always recommended by analysts and analysis houses are already widely known. One strategy I'm using is every week takes a look at assets that are between 1000 and 2000 positions on coingecko.com. I believe that the large multiplications may be in cryptos in this range and are still unknown to the majority of the market.

This way today I like the assets very much:

 1039 (RADAR) DappRadar - $0.01

1069 (MNDE) Marinade - $0.04

1535 POOL) PoolTogether - $1.06

1710 (FEAR) FEAR - $0.13

It is worth it to give a studied in these assets and who knows a little bet ;)