According to my discoveries when as i was searching for a good cryptocurrency investment strategy on reddit, i found out that most people who started investing in cryptocurrency, don’t even have any smart cryptocurrency investment strategy before entering the investment – as well as starting to get involved in cryptocurrency trading.
In this post, i am going to guide you through making a well thought financial decisions with your investment plan. We’re going to talk about Long-term (HODL) and short-term (trading) bitcoin strategy. Now let’s get started…
Table of Contents
Long-term crypto investment strategy
This is basically termed as HODLing bitcoin investment for a long time to make huge profit. This involves securing BTC or any other cryptocurrency and holding for a longer period like a year and above.
This is the easiest plan with low effort one needs to adopt based on the assumption that the cryptocurrency will rise in real value and price worth. Despite all the market volatility in crypto coin prices, it’s considered as a passive income.
Why cryptocurrency long-term investment strategy?
- Just want to easily invest and earn in cryptocurrencies
- Not actively motivated to run the investment
- Don’t have much time to dedicated for the investment plan
- Not confident enough with your technical analysis ability
- Maybe you’ve only selected the long-term crypto winners.
Questions to ask yourself before going long-term
- What are the long-term winners and how to allocated them?
- How are you going to invest in your selected crypto coins?
- Is your condition for pulling out gains going to be based on time or value and worth?
- At what percentage, or fiat value would you draw out your earnings?
- Are you investing more than you can afford to loose?
- At what situation would you be forced to sell out all your investments?
If you can genuinely answer to all these questions, you’ve gotten yourself a great plan to follow up.
Short-term crypto investment strategy
This kind of cryptocurrency investment strategy is when you invest some amount of bitcoins or any other crypto coin for a period of some minutes, hours, days or months.
It is a process that goes with the volatility of the market of cryptocurrencies, as it opportunities to earn from changes in prices of assets over a short period of time.
Problems affecting short-term investments
- The invest is significantly timed
- Prices of assets can go against expectations causing loss
- Technically requires the ability to read charts
- It’s highly profitable yet highly risky.
But all the disadvantages being discussed above, the major advantage is the potential of high performance in the gain of an asset according to the investment percentage due to the changes in price.
However, this can cost you much time and blood pressure because you’ll be reading the chart every second to avoid stories that may touch.
Why you may use this strategy
- You’re confident with your technical analysis ability
- You need quick returns on investment
- You have much time to spear to trade
- You have a decent amount of bitcoin investment that can be used to maximize the ROI.
Taking this strategy and approach to cryptocurrency investment, you will still need almost the same goals that you previously set in the long-term (HODLing) strategy.
Answer all the questions you once asked in the long-term strategy is to be considered once again, and effectively.
Best approach to cryptocurrency investment strategy
- Always hold up-to 80% of all your entire bitcoin investment in crypto assets that has long-term potentials by checking their historical performances in the market-cap.
- Use only the other 20% to engage in short-term trading to maximize your profits due to the volatility in price actions.
- If the market becomes favorable in the long run, you can take everything, but leave a little to continue on the market.
Summary: Investment Strategy for Cryptocurrency
• Don’t invest more than you can afford to loose
• Always write down your goals, strategies and targets as it helps traders bitcoin investors a lot
• Track everything and also compare active trading strategy against passive investment
• Make few, but safe and better investment
• Don’t use all your live earn to start and Bitcoin Investment.
Word of Advice: Be very careful as you invest in the cryptocurrdency trading platforms because things may go totally wrong and you can also loose everything in a second. Learn technical analysis very well or at least, have an idea of how the market operate before trying it out. Good luck.