Have you noticed that the tokens heavily invested by institutional leaders have almost no overlap with those so-called 'get-rich-quick secrets'? Understanding their coin selection logic will give you clearer judgment the next time you face price fluctuations.
Institutions' 'hardcore coin selection standards'
Ordinary investors often chase hot trends and follow rumors, anxiously tracking candlestick charts; in contrast, institutions managing billions of funds remain calm as if selecting antiques in a museum, with their strict standards filtering out 99% of the cryptocurrency 'internet celebrities'.
Compliance is the first hurdle: No matter how strong the technology, it is useless if the token does not meet regulatory requirements, especially whether it can pass the scrutiny of the U.S. SEC. Regulatory risks hang over like a sword of Damocles; non-compliant tokens, no matter how tempting, will be excluded.
Liquidity must be sufficient: Institutions deal with large amounts of capital, and if they choose 'small pool' tokens, buying can easily push prices up, while selling may crash the market. Therefore, a large market cap and active trading are essential conditions, ensuring that funds can enter and exit quietly like whales in the ocean.
Focus on ecosystem infrastructure: Institutions prefer tokens that 'build bridges and pave roads' for the crypto world, such as underlying public chains, storage protocols, oracles, etc.; they are the 'reinforcements and concrete' of the whole ecosystem. Tokens that merely speculate on concepts without practical uses, known as 'mood-setting' tokens, are unlikely to attract institutional attention.
High transparency requirements: Anonymous teams, long-unupdated code, and opaque financial conditions are taboos for institutions. They prefer projects with clear audit reports, publicly available team backgrounds, and continuously updated GitHub code; the higher the transparency, the more trustworthy they are.
Focus on long-term survival ability: Institutions are not concerned with short-term fluctuations, but whether a project can survive and grow in the next bull market. Only projects with real users, a stable developer community, and a healthily growing ecosystem possess sustainable self-financing capabilities; ephemeral projects will ultimately be eliminated.
Coin types that institutions avoid
Pure meme coins: Even if they become popular through memes, they find it hard to attract real investment from institutions and are more seen as entertainment symbols.
'Meme coins' (ultra-low market cap + extreme volatility): The dramatic fluctuations of 50% in a single day come with extremely high manipulation risks, which institutions avoid at all costs.
'Island' coins (non-mainstream chains + no ecosystem): Dependent on niche public chains, lacking practical applications, with poor liquidity and high risk, making it difficult to gain institutional recognition.
Next time you encounter a token soaring in price, don't rush to follow the trend. Measure it with institutions' 'yardsticks': Is it compliant? How is the liquidity? Does it belong to ecosystem infrastructure? Is the transparency sufficient? Can it survive long-term? If it fails to meet these criteria, it is likely just a short-term frenzy for retail investors, while institutions have already been watching calmly from the sidelines. The cryptocurrency space carries high risks; investment must be rational, and entering with a clear mind will help you go further.
