Cryptocurrency is a relatively new concept with new investment strategies still emerging. If you are looking for some ideas about how to get started with cryptocurrency investment, this list of the three most common crypto investing strategies might be just what you need.
However, please be aware though that investments can go down as well as up. No one practice can protect you from the market. This is what makes investing pay off, but it is also what makes it risky. Make sure you invest carefully. Please contact a financial advisor if you need specific advice. With that said, here are a few ideas from others in the cryptocurrency investment community.
Buy in the Dips
What this strategy means is that you buy your cryptocurrencies when their prices are falling. There’s more than one way in which you can implement this strategy. You could buy cryptocurrencies incrementally as the price falls, and so try to get into an average position which is ahead of where you started. You could also wait until the price falls and settles, and buy just as it shows signs of rising back up. Another good strategy to ensure that you buy cryptocurrencies at lower prices to set your buy orders at prices lower than the current rate and profit that way.
Build a Portfolio
It can be easy to get carried away by all the hype surrounding one particular kind of currency or another when you first consider investing in cryptocurrencies. Just like with most investment options, you might want to consider building a strong and diversified portfolio of cryptocurrencies. Investing in one particular kind of coin increases your risk. This is because if that currency falls, you could face huge losses, with no other movement to offset them against. Having a diversified portfolio can help cushion that blow by setting off heavy losses with gains in other currencies. Right up to 2016, Bitcoin was the only major option that a cryptocurrency investor had. Now, with other options like Ethereum and Monero emerging as strong competition, diversifying your portfolio is getting easier.
Making Informed Investments
Of course, this is a prerequisite when it comes to any kind of investment. But when it comes to cryptocurrencies, making informed investments isn’t just an option, it’s a necessity. This is because cryptocurrencies are a relatively young form of investment, and conventional wisdom has yet to be established and tested through market cycles. So, before you take any kind of advice at face value, try to do some reading on the subject. Get yourself up-to-date about what is happening in the cryptocurrency world.
The thing to remember is that investing in cryptocurrencies is quite similar to investing in any other asset. You need to stay updated and aware of what’s happening in the field, and steer away from making rash uninformed decisions. Above all, to be ready to lose as well as win. Ultimately, no one is responsible for your outcomes other than you. It’s a high-stakes environment, but it could see you coming out big.