In Crypto or cryptocurrency investment, choosing a coin to trade determines more than 50% of success or failure. This article will provide you with basic and necessary knowledge about choosing the right coins, as well as analyze the strategies and tools commonly used when investing in cryptocurrencies. Let's get started!

To know how to choose a "good" coin, we must understand the factors that affect them, including Blockchain technology. Cryptocurrencies and blockchain technology are two independent entities, but complement each other. Cryptocurrencies are a special product of blockchain technology; in other words, blockchain technology is the technology that "backs" famous cryptocurrencies.

Thus, in addition to depending on the law of supply and demand or market fluctuations like other investment portfolios, cryptocurrencies are also affected by technological factors, supply, and community support.

1 - Coin liquidity
This is the most important factor that any investor must care about. The higher the liquidity, the easier it is for the asset to be converted into cash or another type of asset without reducing or losing its value.

In which, circulating supply, trading volume, market cap, and community support are important factors that determine liquidity.

Just like on the exchange, the liquidity of a coin helps investors be more flexible in their investment decisions.

2 - Intrinsic value of the coin
If you are a long-term investor, you are interested in the investment portfolio because you think it is a sustainable value that is not affected by market factors; then the intrinsic value of the coin in the investment portfolio is the most important criterion you should aim for.
3 - Coin supply
Unlike stocks or Forex - companies can issue more shares or governments can print more money, coins have a very limited supply; and people create them by mining.
Of course, not all coins are like that! However, based on the scarcity of the law of supply and demand, the limited supply of coins makes the market price of the coin not inflated in the long term. Besides, the cost of mining coins also affects the supply.

4 - Community Support
There is no need to argue about this criterion! Investment types that receive community attention will be more likely to survive than other coins. The more people support, the more people will know and invest, and thus the liquidity will be higher. In addition, having many investors will increase the value of that coin due to the scarcity of the law of supply and demand.

Thus, a "good" coin can be based on many factors, and these factors contribute to complementing each other. The more criteria are met, the safer the coin is and the more sustainable value it brings to investors.

However, a coin appearing on the market is also affected by other short-term factors. As a smart investor, be mentally prepared to "adapt" to the market!

Typical coins in the Crypto world

Bitcoin (BTC)
If you ask anyone which coin is the most worth investing in, the answer is 95% probably BTC. That is also the support of the community that we mentioned in the previous section.

In the coinmarketcap rankings, this coin is always at the top of the list with a market capitalization of 136 billion USD (data recorded in November 2019), proving high liquidity, large volume, ... that any coin is 'craving'.

In addition, the limited supply and the cutting-edge technology behind Bitcoin opening the era of cryptocurrencies are indisputable factors for a good investment portfolio.

In terms of Bitcoin's intrinsic value, it has been argued that Bitcoin's price cannot fall below $5,000 because this is the monetary cost to create a Bitcoin, if the BTC price is lower than that, miners will not have enough motivation to continue their work.

In addition to the monetary value to create BTC, Bitcoin's price is also affected by other factors. Therefore, according to some experts, when the price falls below $6,000, it is a favorable time to buy Bitcoin with the hope that the market will reverse in the future.

Ethereum (ETH)
"Below one person, above ten thousand people" is a saying to indicate the position of Ethereum (ETH) at the present time. Thus, the figures on ETH's market capitalization are also desirable numbers.

If only considering technology or intrinsic value, perhaps Ethereum will "beat" Bitcoin because of the valuable applications based on its platform such as Smart Contract (smart contract), or Dapps (decentralized applications). In addition, the improvement in speed or transaction fees is also one of the plus points of this coin. However, perhaps because it was "born later", ETH has not yet gained as much support from the community as BTC.

Unlike Bitcoin, the supply of Ether is produced by the Ethereum network, and there is no limit. That also means that the supply of ETH, more or less at each time, depends entirely on the decisions of the developers and the response of the market at each stage, and does not follow any rules. This is probably also one of the "weaknesses" of Ethereum compared to Bitcoin or other coins with limited supply.

Bitcoin Cash (BCH)
A coin forked from Bitcoin's blockchain technology in 2017, Bitcoin Cash once "made waves" on social networking sites. With outstanding technological features such as larger block sizes, higher levels of protection, and faster Proof-of-Work difficulty upgrades than its predecessor (BTC). In the past, BCH surpassed ETH, rising to the 2nd position in the rankings. Like BTC, BCH also has a supply limit of 21 million.

However, with a large number of anti-fans from the followers of the "mainstream" Bitcoin (BTC) school, BCH still cannot "dethrone" ETH for a long time.

Litecoin (LTC)
From the vision of creating a lighter and cheaper coin than Bitcoin by Charlie Lee (former Google employee and former director of Coinbase - a popular wallet application platform), Litecoin was born in 2011. Considered the "silver of the crypto world", LTC is a coin that has been technologically upgraded from the BTC platform with the Scrypt algorithm, which is more chained than Bitcoin's PoW algorithm (SHA-256). In addition, transaction speed is also a strong point of Litecoin in terms of technology.

With a limited supply (84 million LTC), Litecoin also possesses all the advantages that a limited supply brings. In March, Charlie suddenly introduced the MimbleWimble protocol (allowing to send cryptocurrencies in a secret way by encrypting transactions), based on the Litecoin platform; officially putting this coin on its own path with its own identity, separating from the "shadow" of Bitcoin in the present.

Ripple (XRP)
As a relatively "hot" coin on the rankings recently, XRP is holding the 3rd position (after ETH) in terms of market capitalization and has reached its highest growth in 2019. With the original purpose of global money transfer, Ripple has become the foundation of many money transfer services using distributed ledger technology trusted by banks around the world. In Vietnam, TPBank has used the RippleNet platform in its international money transfer service.

While the potential of the Ripple network is very promising, the market value of this coin is not so clear. In the last months of 2018, the price of XRP increased sharply, possibly due to the FOMO psychology of speculators about the intrinsic value of this coin. However, the current value of Ripple is quite low compared to the past. Is XRP undervalued compared to the potential it has?

Tether (USDT)
Tether is the 'strongest' stable coin to date. In addition to its function as a bridge between the crypto and fiat worlds, USDT is also a safe haven for investors whenever the coin market fluctuates strongly. Each exchange supports at least one type of stable coin. However, this is not a good investment portfolio because stable coins have very low volatility and are difficult to make a profit like highly volatile coins such as BTC, ETH, ...

Should you invest in Altcoin?

After the spectacular birth of Bitcoin, Altcoins (Alternative Bitcoin) have also been launched in droves. As of this year, there are more than 2,000 altcoins on the market to solve many of Bitcoin's remaining problems to date. Along with that explosion, the concept of "junk coins" has appeared, causing investors to be confused and lose confidence in altcoins on the market.

However, the truth is not like that at all! Altcoin is actually an investment portfolio, and a coin that contains technological potential. Notable altcoins include TRON, Stella, Cardano, Binance Coin (BNB), and EOS. So, "don't judge a book by its cover": if an altcoin possesses many "good" criteria, has sustainable development, and brings short-term profits, etc.; then why not invest?

So, a "good" coin can be based on many factors. The more criteria are met, the safer the coin is and the more sustainable value it brings to investors. However, knowing how to choose a coin is not enough. To be able to trade successfully, you need to learn and know how to apply appropriate coin investment strategies.

6 coin trading investment strategies for investors

1 - Diversify your investment portfolio
"Don't put all your eggs in one basket" is one of the most popular investment rules that we often hear. In today's market, putting complete trust in anything is extremely dangerous and risky. Therefore, the phrase "diversify your investment portfolio" was born as an effective solution to limit risks.

As we know, different coins have different liquidity, intrinsic value and community trust. Therefore, at each point in time, coins also have different changes. Normally, BTC is the coin that wins the most sympathy from investors, but it is one of the coins with high price volatility on the market.

Therefore, diversifying your investment portfolio is very necessary to keep your assets balanced. Normally, investors choose a diversified portfolio with the following criteria:

High market value (price)
High intrinsic value
Low price volatility
2 - Coin has moderate 24-hour price volatility
The "Change 24h" column or the red/green state of the market in most charts represents the change in the coin's price compared to 24 hours ago. So, should this index be high or low? The answer is moderate, about 1-3% is good! Why is that?

If we look at it from a technical perspective, this is a form of trading following the market trend. So, everyone can see, if within 24 hours the market increases by less than 1%, the uptrend has not been clearly formed, and a reversal is a completely possible situation with a basic probability of 50/50.

On the contrary, if the market trend is clear (increases more than 3%), it is a late time to enter an order; because behind the increase is a trend reversal, it is all just a matter of time!

Normally, professional investors rarely use this indicator, because the capital market has many fluctuations in that 24-hour period. However, this is probably the most "easy to understand" and comprehensive indicator that anyone can apply. Therefore, investment decisions using this "1-3% change" tip are only relative; However, this tip is quite effective for short-term investors.

3 - Use the Coinmarketcap website
If you are a data-oriented investor, or you only trade short-term without paying much attention to the intrinsic values ​​of your portfolio; then, coinmarketcap is the right tool for you.

On this website, you will find all the coins listed on the market, from large coins like BTC, ETH, ... to small coins that have just been listed. Besides, market information such as capitalization value, coin circulation volume, supply, and a billion other things.

If you are eager to know all the secrets of this tool, then stay tuned for the next chapter, Remitano will reveal the secret to "hacking" coinmarketcap data in the most miraculous way!

4 - Learn more experience through investment forums
If you are a new investor, still do not understand all aspects of the market, or even have not applied the 'book' knowledge skillfully. Then, go around reputable forums, and of course, it must be a "roundtable" of experienced investors. Then, see what they say about the market during the day, and apply it to our case.

However, it is common for experts and economists to argue with each other in the newspaper. Therefore, it is not strange when you come across the scene of "he says chicken, she says duck". However, their arguments and evidence are all based on logic and many years of experience in the market.

Therefore, for this reference to be effective, you need to clearly identify the goals and investment school you are pursuing to make the right decision.

Currently, TradingView is a good forum in the crypto world based on those criteria. On this website, you can easily find the "Ideas" section for all investment schools in the market, and other sections to learn about basic parameters. TradingView is currently serving many markets, including Vietnam.

In the Vietnamese market, TraderViet is also a good forum, meeting both professional and current criteria for the investment community. Besides, following investors that you like or admire on their personal pages is also an effective way to "hack" experience!

In addition, Remitano Forum is also a potential forum. With the goal of being a place to share knowledge, experience, and update news for investors, Remitano Forum is gradually improving to bring the best experience to users. This is also an ideal reference channel that any investor must "look" at. Follow Remitano on Facebook, and join the Remitano community to update the latest news from the Forum!

5 - Invest in your favorite coins
In the first part of the article, we have agreed on the effectiveness of diversifying the investment portfolio. However, how many coins should you invest in, is it true that the more the better? The answer is no, according to the similarity chart of the number of portfolios and the level of risk distribution, we can see: when reaching a certain number threshold, the risk level will not decrease and almost saturate the unsystematic risk level to 0.

So, instead of focusing on a lot of coins, focus on coins that you understand very well, know very well, and follow their information and data every day.
6 - Eliminate "junk" coins
Depending on each person's definition of "junk coin", we have our own opinions on this. Here, let's temporarily accept that junk coins are coins that have no intrinsic value, or their intrinsic value is very low; and of course, they are always at the bottom of the rankings.

That means, if a small coin, just launched on the market, but possesses great technological potential, high applicability, etc. and the problem is that it is too young; then we will not mention it in the scope of this section.

Speaking of this, everyone must be wondering that if we define "junk coins" like that, who would be foolish enough to invest in them (?!) But no, the point here is that those coins do not stay at the "bottom of society" but they will often "jump" to positions in the top 40 or even the top 10 thanks to a strong marketing team. Yes, that is the phenomenon that we often call a "bubble" and is always at risk of "bursting" at any time.
Of course, junk coins are also an investment portfolio and we have every opportunity to make a profit from them. However, determining whether a coin is "ripe" or when is the time to sell requires a lot of experience and carries great risks. In addition, when we notice a phenomenon, we need to carefully consider its fundamental factors, intrinsic value as well as its sustainability to make wise decisions.
Using Coinmarketcap to choose investment coins
Why should you use Coinmarketcap?
When you first enter the market, you will easily encounter the scene of "he says chicken, she says duck" happening all the time in newspapers or forums. If you want to learn about the market yourself and make your own investment judgments; etc., Coinmarketcap (CMC) is the place to help you do that!

Coinmarketcap (or website https://coinmarketcap.com/) is the place to synthesize information about all large and small coins on the market, from large coins like BTC, ETH, ... to newly launched coins. This is also the reason why CMC is the "national" website of crypto investors. According to data from SimilarWeb (a reputable website statistics website), CMC is in the top 16 most popular websites in the Finance - Investment category, with more than 30 million visits per day.

On its 6th birthday (May 2019), CMC established the Data Accountability Alliance (DATA) including major exchanges such as Binance, Bittrex, OKEx, Houbi, Liquid, Upbit, KuCoin, BitBTC, Gate.io, OceanEx, and Bitfinex. Accordingly, this Alliance will participate in a "roundtable" twice a year to make proposals to increase transparency. In addition, CMC also requires listed exchanges to provide transaction data and live order numbers within 45 days from the date of announcement, otherwise they will be "deported" from this website.

Founded in 2013, with the goal of strengthening fairness and transparency for the cryptocurrency space, CMC has increasingly improved the way it presents and provides data to bring the fairest view to users. However, strengthening transparency is not a one-day-two-day thing; Therefore, the current figures are only relative. Recently, CMC has provided liquidity data to combat fake trading volumes, which "disturbed" the market.

Indicators to pay attention to in Coinmarketcap
Currently, CMC is listing information on nearly 2,000 coins and more than 300 exchanges. To understand this "huge" amount of information, we need to grasp the basic concepts and pay attention to some important indicators.

In the article [Crypto A-Z] Crypto Terms P.3: "Old as the Earth" trading language, Remitano has provided concepts about these terms. Everyone, please learn them before starting!

Market Capitalization (or Market cap):

If you pay attention, you will easily realize that the name Coinmarketcap also comes from this index. That is enough to see how important the market cap is!

Simply put, this is the price for you to buy all the coins in that market. Looking at the image above, everyone can see that the market capitalization of Bitcoin (BTC) is $136,737,374,384, this is the price for you to buy all BTC on the market. Thus, the higher this index means the larger the market share of that coin.

Surely everyone still remembers the formula for calculating market cap: We can see that if we want the price to increase, the market cap must increase (the amount of assets invested in that coin increases) and/or the circulating supply must decrease (the scarcity increases). Thus, investors can estimate the feasibility of expectations compared to the actual price based on this index.

In addition, if you look at the top of the interface, you will see the Market cap index is $204,139,031,549. This is the capitalization value of the entire market, which is the price for you to buy all coins on the market. Similar to the market cap of coins, traders will rely on this index to predict the market share of the crypto market, compared to other markets.

Volume (24h):

This is the 24-hour trading volume index of a coin. The higher the trading volume, the more people are interested in investing in that coin. Normally, investors look at volume to predict the liquidity of a coin. However, the data still cannot fully reflect when the market is manipulated!

Circulating Supply:

This is the number that indicates the amount of coins that have been mined and are circulating in the market. In reality, not all mined coins are circulating in the market. Among them, some may be lost due to theft or [duplicate transactions](link to fork article], etc. In addition, in Circulating Supply on CMC, we see * next to some coins such as XRP, EOS, USDT, ... This means that these coins cannot be mined.

Price:

The current market price of that coin is updated regularly. The price of a coin at CMC will be calculated based on the price of that coin at all exchanges listed on CMC. Bitcoin (BTC) information
Bitcoin (BTC) information
For example, the current BTC price is $7,570.14, calculated by the weighted average of BTC prices at listed exchanges: Specifically: $7,570.14 = (3.32% x $7,579.55) + (3.02% x $7,580.52) + ...

BTC Dominance:
This is the dominance index of BTC, which is the "market share" of BTC in the cryptocurrency world. The higher the market capitalization (market cap) of Bitcoin, the higher this index. The higher the BTC Dominance, the more other coins are sold and/or Bitcoin is bought. Thus, this is an index that shows the market demand for Bitcoin compared to other Altcoins. The reason why BTC Dominance is considered one of the important indexes is because:

Bitcoin is the first cryptocurrency, the "king" of other cryptocurrencies, and always has the highest market capitalization value.

Bitcoin and other cryptocurrencies (altcoins) are two opposing types of investment, with opposite trends, often used to diversify investment portfolios effectively.

On some exchanges, BTC is often chosen as an 'intermediary' currency to exchange with other coins because of its high liquidity.

Liquidity:
In November, CMC updated the Liquidity index of exchanges. Thanks to this index, users can accurately determine the liquidity of the exchange in a transparent and safe manner. List of exchanges sorted by liquidity

According to CMC, Liquidity is a tool to limit dependence on the trading volume reported by exchanges. As we mentioned above, trading volume is often falsely declared by exchanges, or there are fake transactions, price manipulation transactions, money laundering, etc. to increase the market demand for that coin.

Look up information with Coinmarketcap
Cryptocurrency market information

Basically, CMC provides information about coins in a tabular format by listing. On the main interface, you can follow lists such as Cryptocurrencies (List of coins on the market), Exchanges (List of listed exchanges), and Watchlist (List of coins you are interested in). To sort the list according to your own criteria, simply click on the arrow next to those lists and select the criteria you want.

Cryptocurrency Information
After monitoring the market to find potential coins, you will have to research each coin to see which one is the most worth investing in. To do this, you just need to click on the coin name in the Cryptocurrencies list: Full Cryptocurrency Information Here, you can track the basic information of that coin, as well as the ups and downs since the coin was formed until now. The chart shows information such as market capitalization (green line), market price (blue line), price in BTC (appears on the chart of coins other than BTC - yellow line) and trading volume (gray).

In addition, you can also track other information such as

Market Pairs: shows the relationship between coin pairs, eg: BTC/USDT, BTC/ETH,...
Social: shows the community's comments/reviews about the coin
Tools: tool to calculate coin prices on CMC
Ratings: measures the health of the coin, performed by a third party
Historical Data: records coin data by day
Exchange information
In addition to cryptocurrency information, CMC also provides full information about the exchanges listed on its website. Similar to how to view cryptocurrency information, you just need to click on the exchange name in the list of exchanges (Exchanges): Full information of the exchange Here, you can track the list of coins listed on this exchange. The data in this section is provided by the exchanges. In addition, you can also filter the list by the criteria on the right side (in the purple box) to find information and compare the coins you are interested in.

Watchlist - Track your favorite coins in a magical way
The main function of Watchlist is to save the coins you are interested in without having to find them again in the list of 2000 cryptocurrencies listed on the other side. To do this, you need to: Step 1: Open the coin information by clicking on the name on the list Step 2: Click on Watch to add the coin name to your Watchlist Step 3: Review the list of favorite coins in Watchlist In addition, you can also add the coin you are interested in by selecting "Add to Watchlist".

Coinmarketcap Interest - Coin Holding Interest
In October 2019, CMC launched Coinmarketcap Interest - a place that provides interest rates for a number of cryptocurrencies, helping users estimate the inflation rate of each coin and make appropriate decisions. Accordingly, users can earn interest when depositing coins or can borrow cryptocurrencies to make investments. Coinmarketcap Interest main interface

On the main interface of the website, we can find full information such as coins (left column), basic information (first item of the right column), and information on platforms that pay interest on coin deposits (Earn Interest) or lending platforms (Borrow Crypto).

Here, you can also track basic information and interest rates of platforms for the coins you choose. To see detailed information about this service, you just need to click on the name of the platform, the system will connect to the official website of the providers, where all the necessary information is available.

Above is all the latest information and instructions on how to use Coinmarketcap. This is an extremely important tool that any investor needs to monitor information about their investment portfolios in the most accurate and transparent way.

Conclusion
"Profit always comes with risk" has never been wrong. Like other investment portfolios, investing in virtual currency also has great risks in addition to huge profits. Therefore, to take advantage of the strengths and limit the weaknesses of this type, investors need to carefully research the market and look for suitable opportunities for themselves. Hopefully after this article, you have equipped yourself with basic knowledge and applied it to choose a good coin for yourself. And don't forget to follow other articles in the "Crypto A-Z" series!