Strategy for selecting long-term investment targets

1. Track positioning

In the cryptocurrency circle, trends determine success or failure. We should be cautious about old and over-hyped tracks, such as some early blockchain projects. On the contrary, emerging tracks, such as the sub-sectors of decentralized finance (DeFi), the non-fungible token (NFT) ecosystem, the concept of the metaverse, and the application of artificial intelligence (AI) in blockchain, are more likely to contain huge growth potential. In these new tracks, we should actively look for and deploy leaders.

2. Market value considerations

Market value is an important indicator for evaluating whether a project is worth holding for a long time. Projects with too high market value, although they have strong stability, often have limited growth space and are difficult to achieve a 10-fold increase. Projects with too low market value, although they have great potential, have low trading activity, high liquidity risk, and even the risk of being delisted by exchanges. Therefore, we recommend choosing projects with a market value between 50 million and 1 billion, which usually have more reasonable valuations and higher growth potential.

3. Position allocation

In the investment process, position management is crucial. We do not recommend concentrating all funds on a single project, as such investment risk is extremely high. Instead, we recommend that 30% of the total position be used for long-term investment, and 1-2 projects be allocated in different tracks, with a total of 5-10 projects screened for investment. Such a strategy can ensure the diversity and risk diversification of the investment portfolio, and even if a project performs poorly, it will not have much impact on the entire investment portfolio.

By selecting emerging tracks with growth potential, assessing the reasonable market value of the project, and conducting scientific position management, we can increase the winning rate and return multiples of long-term investment. At the same time, this investment strategy also helps to reduce risks and ensure that our wealth can grow steadily. By adhering to such an investment strategy, we will be able to get more returns in the digital asset market.