How Should Beginners Allocate Crypto Assets? This Guide Has You Covered

As we all know, risk and return are directly proportional—higher returns naturally come with greater risks. In the world of crypto assets, investing in mainstream coins carries significantly lower risk than altcoins, which explains why some altcoins can deliver higher investment returns than mainstream coins. Different categories of cryptocurrencies have their own advantages and disadvantages. So which crypto assets are suitable for beginners to purchase? And how should they manage positions and maintain the right mindset?

1. Understanding and Selecting Crypto Asset Types

After more than a decade of development, Bitcoin has gradually gained acceptance and recognition from investors. More and more people outside the crypto space are learning about Bitcoin and choosing to enter the crypto world. Upon entering this world, we discover that Bitcoin is not the only investment option—investors have hundreds or even thousands of asset allocation choices.

1. Mainstream Coins

Crypto assets ranking at the top of the market capitalization charts are typically called mainstream coins. Mainstream coins are characterized by large user bases, good trading depth, high market activity, and having withstood the test of time, demonstrating strong risk resistance. Mainstream coins generally enjoy strong consensus in the crypto market, have significant practical application value, and offer better liquidity than typical crypto assets, making them widely recognized investment targets.

Therefore, for newcomers just entering the market, allocating mainstream assets is relatively more appropriate, such as Bitcoin, Ethereum, Litecoin, Ripple, etc. As the first crypto asset, Bitcoin accounts for nearly half of the entire crypto asset market capitalization. Many experienced users use its price movements as the primary reference for allocating other assets. For an introduction to Bitcoin and its investment value, please refer to "What is Bitcoin" and "Why Bitcoin is Worth Investing In". For introductions to other mainstream coins, see "What are Mainstream Coins? What are Stablecoins? What are Altcoins?"

These mainstream coins have high market recognition, strong liquidity, and relatively low investment risk, making them a wise choice for new users investing in crypto assets.

2. Altcoins

Altcoins are defined relative to mainstream coins. The term "altcoin" is not derogatory—they are also crypto assets created using blockchain technology, but their market recognition, consensus, and liquidity are not as high as mainstream coins. However, when they experience surges in popularity, they can also deliver impressive performance. For example, heavily hyped Meme coins, breakout public chain tokens, and GameFi, Layer 2, DeFi, and NFT concept coins have all led investment trends during different time periods.

So, do altcoins have investment value? This question is somewhat subjective. Looking at historical price trends of altcoins, their price fluctuations are quite volatile, so they still need to be tested by time and the market.

For new users considering investing in a particular altcoin, you should first understand: What is its essence? Does it have real-world use cases? What is your purpose for investing in this altcoin? Invest cautiously within your own capabilities and risk tolerance.

3. Stablecoins and Platform Tokens

Among crypto assets, there are also concepts like stablecoins and platform tokens.

Stablecoins, as the name suggests, are digital assets unaffected by price volatility. Their greatest characteristic is price stability—they don't experience the dramatic rises and falls like Bitcoin. To maintain price stability, stablecoins need to be backed by some form of alternative value, such as the US dollar, gold, or a basket of fiat currencies. This has led to numerous dollar-pegged stablecoins (such as USDT, GUSD, etc.) and Facebook's former Diem (Libra) stablecoin project.

Dollar-pegged stablecoins emerged primarily to solve two problems: 1) The excessive price volatility of cryptocurrencies. 2) Serving as an exchange medium between fiat currency and cryptocurrencies. Currently, the most established stablecoin is USDT, issued by Tether Limited, a company formed by Bitfinex, the world's largest digital currency trading platform. It is pegged to the US dollar, with 1 USDT approximately equal to 1 USD. Users deposit US dollars in Tether's bank accounts, and Tether issues dollar-denominated certificates equal in value to one dollar. Simply put, the amount of USDT issued means Tether has that amount in dollar reserves. Besides USDT, there are also stablecoins like USDC, TUSD, GUSD, DAI, and PAX.

Platform tokens refer to the tokens/universal points of digital asset trading platforms. Because their application scenarios are mostly within the platform, they are also called platform tokens by investors. However, precisely because they rely on trading platforms, they inherently possess trading value and circulation value.

2. Diversifying Allocation Across Different Crypto Assets

For newcomers just entering the crypto space, it's recommended to invest only a portion of your idle funds. When allocating assets, new users should try not to put all their eggs in one basket—learn to diversify positions across different crypto assets to reduce investment risk. If you have $1,000 in idle funds, you could allocate the majority to mainstream coins like Bitcoin and Ethereum. If you believe in the value of mainstream coins, consider extending your investment timeline. The remaining smaller portion of funds can be allocated to altcoins. However, since altcoins typically experience larger volatility, risk management is essential. When you don't have complete confidence and experience, it's advisable not to hold long-term, as the high risks they carry are not acceptable to all investors.

"Don't put all your eggs in one basket" actually has a second half: "but don't put them in too many baskets either." Asset allocation is about leveraging risk differences between different assets to reduce overall risk and lower portfolio volatility. True diversification emphasizes differentiation in investment platforms and financial products—diversifying across platform types, product types, investment periods, expected returns, and other dimensions.

After understanding crypto asset allocation, new users also need to pay attention to entry timing. Choosing optimal entry times can often yield greater returns. If you're a new user who has done thorough research, understands and believes in the philosophy and value of crypto assets, and is ready to enter the market, then every major market dip is actually a good entry opportunity—extend your investment timeline appropriately and don't worry about short-term fluctuations to achieve greater returns. If you're a novice user who only has superficial knowledge of crypto assets and has only heard about popular coins like Bitcoin and Dogecoin, then you need to understand overall market trends and the historical price movements of the crypto assets you want to invest in. You also need to stay updated with the latest news to help your judgment, buying low and selling high to profit from market fluctuations. Of course, given the high volatility of crypto asset markets, risk control is essential.

3. Position Management and Mindset Management

Whenever the crypto market experiences significant price fluctuations, position management and mindset management become extremely important.

Many investors consider making money the primary goal of investing, but this isn't quite right. Warren Buffett once shared his investment philosophy: preserve your capital. The same applies to investing in crypto assets. When market volatility is high, our primary goal is capital preservation, and only then profit. Every qualified investor needs to build their own position management system. Always remember to implement strict stop-losses. Many people know about compound interest and position-adding strategies, but this approach essentially abandons position management, so you must implement absolutely strict stop-losses. Ignoring this will inevitably lead to total loss.

Additionally, mindset management is something many investors often overlook. Some investors who understand candlestick charts can analyze trends and technical aspects eloquently, discussing concepts like left-side trading, right-side trading, and Fibonacci retracements. However, if they cannot manage their mindset properly, investors may experience tremendous frustration and self-doubt after one or two misjudgments, which can even affect their investment decisions for a long time afterward. After all, humans are not omniscient and cannot make every judgment correctly. If investors can properly manage their mindset, even after several misjudgments, they can quickly recover emotionally and get back in the game. Mindset management allows investors to trade with greater confidence.

Good mindset management includes thinking about risk, accepting risk, resisting FOMO emotions, eliminating illusions, and managing return expectations. An ancient saying goes: "A general who considers defeat before victory can fight a hundred battles without danger." Conversely, not accepting risk means avoiding risk, which can have disastrous consequences. For example, investors who like to avoid risk often develop FOMO emotions when market conditions are favorable—seeing a particular crypto asset continuously rising and developing a chase mentality. This blind buying without market analysis can easily lead to regret when that crypto asset declines.

Conclusion: As a newcomer about to enter or already in the market, you should not only comprehensively examine mainstream coins like Bitcoin but also deeply understand the purposes and values of other blockchain projects. When you recognize the value of the blockchain projects you're researching—such as popular sectors like DeFi, NFT, and Polkadot—your investment confidence will be stronger, and your understanding of risk and profit-taking/stop-loss levels will be clearer. Of course, like investing in other assets, crypto asset investment is not risk-free—risks exist. Therefore, investors need to pay attention to position management and mindset management, and reasonably control risks.

Disclaimer

This article may contain content related to products that are not available in your region. This article is provided for general informational purposes only and no responsibility is accepted for any errors of fact or omissions expressed herein. This article represents the author's personal views only and does not represent the views of OKX. This article is not intended to provide advice of any kind, including but not limited to: (i) investment advice or investment recommendations; (ii) an offer or solicitation to buy, sell or hold digital assets; or (iii) financial, accounting, legal or tax advice. Holdings of digital assets (including stablecoins) involve high risk, can fluctuate significantly, and may even become worthless. You should carefully consider whether trading or holding digital assets is suitable for you based on your financial situation. Please consult your legal/tax/investment professional for questions about your specific circumstances. Information (including market data and statistical information, if any) appearing in this article is for general informational purposes only. While all reasonable care has been taken in preparing this data and charts, no responsibility is accepted for any errors of fact or omissions expressed herein. © 2025 OKX. This article may be reproduced or distributed in its entirety, or excerpts of 100 words or less may be used, provided such use is non-commercial. Any reproduction or distribution of the entire article must also prominently state: "This article is © 2025 OKX and is used with permission." Permitted excerpts must cite the article title and include attribution, for example "Article Title, [author name if applicable], © 2025 OKX". Some content may be generated or assisted by artificial intelligence (AI) tools. No derivative works or other uses of this article are permitted.

How Should Beginners Allocate Crypto Assets? This Guide Has You Covered

How Should Beginners Allocate Crypto Assets? This Guide Has You Covered

1. Understanding and Selecting Crypto Asset Types

1. Mainstream Coins

2. Altcoins

2. Diversifying Allocation Across Different Crypto Assets

3. Position Management and Mindset Management

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