Cryptocurrency is the future, as they say. It is high time for people to invest in the crypto space as the decentralized technology is what’s needed for secure and safe transactions and trading. If you are new and want to explore the world of cryptocurrency through investing, here are a few important smart investment strategies that might help you in trading and investing cryptocurrency in 2021.
Hodling your Investment
It is one of the most popular strategies in investing. It was meant to be “HOLD” instead of “HODL” and it means to hold your money instead of selling it. It is most effectively used by beginners to hold their money for long period of time without cashing or selling it out. This strategy is quite easy to execute and straightforward. The concept behind this simple strategy is to maintain hope in the volatile market.
However, there is no proven evidence that this strategy is 100% effective yet it brings profits to the investors in certain circumstances such as when the market is going up. In a nutshell, hodling your money might not be able to get you immediate profit but it has significant benefits for beginners in understanding the working of the market.
Trading: Buying Low and Selling High
The name of this procedure is quite obvious. Purchase when you think the cost of a resource has dropped low enough, and sells after it surges in value. The choice on what crypto to purchase depends on authentic qualities and current economic situations. Despite the fact that it very well might be difficult to utilize this technique reliably, it has accomplished a good degree of prevalence.
To protect their benefits with this procedure investors frequently set stop-losses. Some go significantly further and apply technical analysis and buy/sell dependent on support levels, moving averages, and so on. Additionally, it is suggested that investors should watch out for exchange fees and portfolio erosion.
ICO Investing (Initial Coin Offerings)
ICOs are a crowdfunding technique where tech makers sell tokens that will later be supplanted with altcoins after the organization is moving up. The advantage is that tokens can be exchanged on trades and may altogether ascend in value over the long haul.
There are two fundamental ICO investment strategies, which are basically inverse methodologies. The first, flipping, infers buying the tokens and exchanging them very quickly. In the event that there is a decent interest for the token and the company is moving upwards, you can make great benefits. However, in any case if you at first make a little investment, the benefits may not be enormous.
On the other hand, investors can pick the holding technique. The reason behind this strategy is that the investors discover the organization and its tech extremely encouraging and rely on their future achievement.
It will require some research and technical analysis. Prior to investing, you should sort out about their plan of action, the development group, total supply, inflation and so on.
However, before creating a perfect investment strategy you need to consider the following things:
• Your current financial situation
• Your risk tolerance and desirable return
• The measure of the effectiveness of your investment strategy
• Applicability to different market environments
