As we all know, risk and return are proportional—higher returns naturally come with greater risks. In the world of crypto assets, investing in mainstream coins carries far lower risks than altcoins, which is why some altcoins can yield higher returns than mainstream coins. Different sectors of crypto investments have their pros and cons, so what crypto assets are suitable for beginners? And how should they manage their positions and adjust their mindset?

1. Understanding and Choosing Crypto Assets

After over a decade of development, Bitcoin has gradually gained acceptance and recognition among investors. More and more users outside the crypto space are learning about Bitcoin and entering the crypto world. Once inside, we discover that Bitcoin is not the only investment option—there are hundreds, if not thousands, of other assets to choose from.

1. Mainstream Coins
   Crypto assets ranked at the top of the market cap list are usually referred to as mainstream coins. These coins are characterized by a large user base, strong trading depth, high market activity, and a proven track record of resilience. Mainstream coins generally enjoy strong consensus in the crypto market, have substantial real-world utility, and offer better liquidity than most crypto assets, making them widely recognized investment choices.

   Therefore, for beginners, allocating funds to mainstream assets like Bitcoin, Ethereum, Litecoin, and Ripple is relatively more appropriate. Bitcoin, as the first crypto asset, accounts for nearly half of the total crypto market cap. Many experienced users use its price movements as a reference for allocating other assets. For more on Bitcoin’s introduction and investment value, refer to What Is Bitcoin? and Why Is Bitcoin Worth Investing In? For other mainstream coins, see What Are Mainstream Coins, Stablecoins, and Altcoins?

   These mainstream coins are well-known, highly liquid, and relatively low-risk, making them a wise choice for newcomers.

2. Altcoins
   Altcoins are defined in contrast to mainstream coins. The term "altcoin" is not derogatory—it refers to crypto assets created using blockchain technology but with lower market recognition, consensus, and liquidity than mainstream coins. However, when hype builds, they can deliver impressive performance, such as meme coins, public chain tokens, and concept coins like GameFi, Layer 2, DeFi, and NFTs, which have led investment trends at different times.

   So, do altcoins have investment value? Opinions vary. Historically, altcoin prices have shown significant volatility, so their value must be tested by time and the market.

   Before investing in any altcoin, beginners should understand its essence: What is it? Does it have real-world use cases? What is the purpose of investing in it? Only invest cautiously within your risk tolerance and capabilities.

3. Stablecoins and Exchange Tokens
   Crypto assets also include concepts like stablecoins and exchange tokens.

   Stablecoins, as the name suggests, are digital assets designed to resist price volatility. Their key feature is price stability, unlike Bitcoin’s wild price swings. To maintain stability, stablecoins are typically backed by alternative value reserves, such as the U.S. dollar, gold, or a basket of fiat currencies. Examples include USD-backed stablecoins (e.g., USDT, GUSD) and Facebook’s now-defunct Diem (Libra) project.

   USD stablecoins primarily address two issues:

   1. Excessive volatility in crypto prices.

   2. Serving as a medium of exchange between fiat and crypto.
      The oldest stablecoin is USDT, issued by Tether (a company affiliated with Bitfinex), pegged 1:1 to the U.S. dollar. Users deposit dollars into Tether’s bank accounts, and Tether issues equivalent USDT. In short, every USDT in circulation is backed by a dollar in reserve. Other stablecoins include USDC, TUSD, GUSD, DAI, and PAX.

   Exchange tokens refer to tokens or loyalty points issued by crypto trading platforms. Since their use cases are mostly platform-specific, investors call them exchange tokens. However, being tied to exchanges gives them inherent trading and liquidity value—for example, OKB by OKX.

2. Diversifying Crypto Asset Allocation

For beginners in the crypto space, it’s advisable to invest only idle funds. Avoid putting all your eggs in one basket—learn to allocate different crypto assets across positions to mitigate risk. For example, if you have $1,000 in idle funds, you could invest most of it in mainstream coins like Bitcoin and Ethereum. If you believe in their long-term value, consider extending your investment horizon. The remaining small portion can be allocated to altcoins, but due to their high volatility, risk management is crucial. If you lack confidence and experience, avoid holding them long-term, as their high risk may not suit all investors.

The saying "Don’t put all your eggs in one basket" has a follow-up: "But don’t spread them across too many baskets either." Asset allocation leverages risk differences between assets to reduce overall risk and portfolio volatility. True diversification involves selecting varied investment platforms and products, considering factors like platform type, product category, investment horizon, and expected returns.

After understanding crypto asset allocation, beginners should also time their entry wisely. Choosing the right entry point can significantly boost returns. If you’ve done your homework and understand crypto’s value, market downturns can be great buying opportunities—extend your investment horizon and ignore short-term fluctuations for greater gains. If you’re a novice who’s only heard of Bitcoin or Dogecoin, study the broader market trends and the historical performance of your target assets, stay updated with news, and aim to buy low and sell high. Remember, crypto markets are highly volatile, so risk control is essential.

3. Position and Mindset Management

Whenever crypto markets experience major swings, position and mindset management become critical.

Many investors prioritize making money, but as Warren Buffett advises, the primary goal should be capital preservation—this applies to crypto investing too. During high volatility, focus first on protecting your principal, then on profits. Every competent investor needs a personalized position management system. Always remember to cut losses strictly—many know the "compounding leverage" strategy, which essentially ignores position management, making strict loss-cutting a must. Neglecting this could lead to total loss.

Additionally, mindset management is often overlooked. Some investors adept at technical analysis—discussing trends, left/right-side trading, Fibonacci retracements—may still fail if they lack emotional control. A few misjudgments can lead to frustration, self-doubt, and long-term impacts on investing. After all, no one is infallible. Proper mindset management helps investors stay confident, recover quickly from mistakes, and return stronger.

Good mindset practices include:

• Assessing risks

• Accepting risks

• Resisting FOMO (fear of missing out)

• Avoiding illusions

• Managing return expectations

As the ancients said, "A general who thinks first of defeat rather than victory can fight a hundred battles without peril." Conversely, refusing to accept risks is avoiding them, which can be disastrous. For example, risk-averse investors often succumb to FOMO during bull markets—blindly chasing rising assets without analysis, only to regret when prices fall.

Conclusion: Whether you’re about to enter or have already entered the crypto space as a beginner, thoroughly evaluate mainstream coins like Bitcoin while deeply understanding the utility and value of other blockchain projects. When you recognize the value of projects in trending sectors like DeFi, NFTs, or Polkadot, your investment confidence will grow, and your grasp of risk and profit/loss points will sharpen. Of course, like any investment, crypto isn’t a guaranteed win—it carries risks. Thus, proper position and mindset management are key to controlling risk effectively.