Fundamental Analysis in Choosing Altcoins in Cryptocurrency With Preference Selection Index Method

Abstract

Cryptocurrency has become one of the most intriguing topics in finance and technology in recent years. With the growing prominence of Bitcoin, the rise of altcoins (alternative cryptocurrencies) also demonstrates significant potential within the cryptocurrency market. Altcoins, which include all cryptocurrencies other than Bitcoin, offer diverse functionalities and use cases, ranging from smart contracts to decentralized finance (DeFi) applications. This thesis identifies the altcoin options with the best investment opportunities and the highest growth potential. The study employs the Preference Selection Index (PSI) method, a multi-criteria decision-making approach that evaluates alternatives based on specific preferences and criteria. This method is particularly suitable for assessing complex investment decisions involving multiple variables, such as market capitalization, technological innovation, and utility. By applying PSI, investors can decide which altcoins will likely yield substantial returns. A web-based platform has been developed as part of this research to simplify selecting promising altcoins. This platform enables users to evaluate options based on predefined criteria, such as market trends, project objectives, and development team credibility. The accessibility of this tool empowers users—whether novice or experienced investors—to navigate the dynamic cryptocurrency market more effectively. Altcoins provide a unique opportunity for diversification in investment portfolios. Unlike Bitcoin, which is often viewed as a store of value, many altcoins are designed with specific purposes and innovative features. For instance, Ethereum introduced smart contracts that revolutionized decentralized applications, while other altcoins focus on scalability or niche markets like the Internet of Things (IoT). However, investing in altcoins also comes with challenges like high market volatility, security risks, and regulatory uncertainties. Therefore, thorough research and strategic planning are essential for minimizing risks while maximizing returns in this rapidly evolving sector.