The ranking of cryptocurrencies to make investment decisions for investors

Abstract

This study aims to rank cryptocurrencies for investment decisions among three different types of investors: Conservative Investors, Moderate Investors, and Aggressive Investors, using the Multi-Criteria Decision Making (MCDM) model known as Technique for Order of Preference by Similarity to Ideal Solution (TOPSIS). The study selected the top 10 cryptocurrencies with the highest trading volumes through exchanges registered with the Securities and Exchange Commission (SEC), consisting of Tether, Bitcoin, Optimism, Ethereum, Terra Classic, Zilliqa, XRP, Dogecoin, GALA, and Cortex. The criteria used for ranking these cryptocurrencies include: 1) Return on Investment, 2) Sharpe Ratio, 3) Trading Volume, 4) Volatility, 5) Market Capitalization Share, and 6) Number of exchanges licensed by the SEC. The findings of the research indicate: 1) For Conservative Investors, the recommended order of investment is Bitcoin (BTC), followed by Optimism (OP) and Ethereum (ETH). 2) For Moderate Investors, the recommended order of investment is Ethereum (ETH), followed by Optimism (OP) and Cortex (CTXC). 3) For Aggressive Investors, the recommended order of investment is Bitcoin (BTC), followed by Tether (USDT) and Ethereum (ETH). 4) All types of investors should avoid investing in Tether Classic (LUNC), ranked as the 10th cryptocurrency.