The best crypto investing strategies are not necessarily the ones with the highest historical returns. Instead, the best crypto strategies for experienced and beginner traders would be those that meet your objectives and level of risk tolerance. The most effective investment plans should have characteristics that make them easy to follow and maintain over time rather than requiring frequent changes. In this article, you will learn the top crypto strategies that would fit your trading style and goal.
Best Crypto Investing Strategies to Follow During the Inflation
Due to inflation, investing is crucial. Investors choose to invest in stock, bonds, commodities and cryptocurrency to prevent the devaluation of cash.
Consider that within the next 30 years, the current money may not be worth as much as now. If you don’t have a good investing strategy or plan, you might lose your money due to inflation. Due to the ongoing threat of inflation on the fiat currency, investors frequently take measures to safeguard themselves by investing in assets with long-term value stability.
Gold is commonly recommended as an inflation hedge, but cryptocurrency has recently gained popularity and has become a substitute for gold. Retail investors and investment institutions invest in gold, real estate, and other assets. As a result, to safeguard themselves against inflation in the future, they consider many different investment options and diversify their portfolios with different types of assets.
Throughout the past ten years, Bitcoin and other cryptocurrencies have demonstrated that value gain for the long-term holders. For example, Bitcoin has naturally developed into a store of value assets because of its durability and scarcity. From Bitcoin historical data we can see that the opening of Bitcoin price was only $0.3; then it reached its peak at the highest price of $ 68,000 in November 2021, which made the crypto market cap hit the $3 trillion mark for the first time.
Even in a recession market, a profitable investment could be made with the proper crypto investing strategy. The key to success in trading is that you should not abandon your investment strategy in favour of a trendy new item you discovered online but continually adhere to the fundamentals.
Long Vs Short Terms Crypto Investing Strategies
When you first start investing in cryptocurrencies on your own, the market may appear complex, sometimes even too complicated. But there are several tactics you may use to simplify things. A sound investment strategy can produce positive returns. Understanding your trading style, whether you are in for a long or short period and how frequently you want to trade will help you make investing easier.
Growth Investing Strategy
One of the oldest and most fundamental methods of growth investing is a suitable fundamental analysis that fits long-term investors.
It entails examining financial records and information on the business responsible for each coin and its project. The objective is to choose a coin with growth potential for the foreseeable future.
This method of investing aims to create a portfolio of 10 or more distinct coins. It can take a lot of time to conduct the research necessary to make this plan successful. This approach aligns with investors who seek to gain higher during future growth. If you opt for this strategy, you will examine data from the coin’s chart and market cap with its supply and demand. The coin’s trading volume, project, and whitepaper will help determine whether it would be a good investment.
Value Investing Strategy
It is clear that a crypto value investor is looking for an undervalued coin that is trading at a “discount.” Once it becomes more well-liked among cryptocurrency traders, the price can rise. Bitcoin is the first cryptocurrency, which was probably undervalued for the first ten years of its existence. This example serves as an illustration of this value investing concept. As more investors have realized the potential of Bitcoin and its demand has grown, the price of Bitcoin has also risen. Those who purchased Bitcoin early on when it was undervalued and held it for a period of time have significantly profited.
The challenge with a value investing strategy is figuring out which assets are undervalued. This method demands extensive study and a long-term outlook because it may take some time to turn a profit and only if your research is accurate.
Given the potential for significant rewards, this labour-intensive work may be worthwhile, and you can only learn from the process how to become a better investor by improving your ability to identify projects with high value.
Buy and Hold Investing Strategy
The strategy is straightforward, you purchase coins or tokens, hold them, and wait. You can find HODL, terminology that is commonly used among crypto investors ‘’ HODL’’ stands for “hold on for dear life” and is both a misspelling of the word “hold” and an acronym; it is a long-term strategy that has emerged as one of the simplest and most successful methods available. Buy-and-hold investors will purchase and hold coins for a long time, and if you employ this strategy, which will only trade at the right time, then you are on the path to success. Many Bitcoin holders purchased tokens at a price far below the currency’s current price and became millionaires.
Active Trading Strategy
Active trading is challenging, and only a select few who attempt it are successful. Most active traders employ short-term strategies and some technical analysis to concentrate on the price swings of the coin rather than the projects or its potential future value increase. Significantly shorter-term adjustments can be profitable if you are experienced and skilled in chart reading.
With this trading approach, you can operate on any time frame, as many times per month, day, minute, or even second. First, you need to view current price patterns and market trends and use the coin’s price data via exchange feeds or charting services to forecast future changes in pricing. You might also use momentum investing for a more passive version of active trading and invest once the trends have developed and price movement has occurred.
Additionally, active traders can decide to make longer-term investments that will last for several months in the hopes that the price will keep moving in the same direction and gain momentum according to the “buy high and sell higher” concept.
Tip! Fundamental analysis may be the primary tool for growth for long-term investors but Technical analysis is the primary tool for the active trader.
How to Choose Crypto Investing Strategies for You?
One of the best choices you can make for yourself is investing, but getting started can be challenging. Select a well-liked investment strategy that will work for you, and then stick with it to simplify the process. Your tactics and the kinds of investments you can make can be expanded as you get a deeper understanding of investing. You’re bright and engaged, you can invest more aggressively; if daily price watching and market moves are things you want to keep an eye on, active trading may be a good fit. On the other hand, the buy and hold method is an option if you have a short attention span and are unconcerned with the short-term decline. Lastly, you might adopt a growth strategy for less aggressive trading if you hope to make money in the long run and believe in the coin.
To be kept in mind a few key factors for you to pay attention to before investing:
1. Avoid social media advertising that promises significant returns or other financial advice.
2. Learn about the value of the projects you are interested in, and track the cryptocurrency market movement.
3. Create more effective strategies over time once you‘ve more investment experience on losses and gains.
4. Ensure that your portfolio is diverse and reallocate your assets for you to feel comfortable with the risk level you are taking on.
5. Moderate your portfolio regularly and allocate your assets depending on your investment plan and market state.
6. Limit your investment to what you can afford to lose.
7. Never risk your entire life’s savings in one investment.
Each investor requires a different approach, but we all have one common desire to build wealth and pursue that goal in life. It is you only who can decide how to accomplish it.
Kickstart Your Crypto Journey With CoinField
New investors can make investing relatively simple with a few basic steps starting by signing up for a CoinField account, and once your identification is fully verified, then fund via wire transfers or debit/credit card to your account and purchase your favourite cryptocurrencies like Bitcoin, Ether, XRP and many more.
Please note that this is not trading advice. We recommend you to carry out your own research before making any trading decisions. This article is for informational purposes only.