Mastering your crypto investment game is not that impossible if you are mindful of some aspects and have the right strategies in place. The increased adoption of blockchain technology and cryptocurrencies gave rise to an avid wish to make money and achieve financial freedom. So, increasingly more individuals invest in virtual coins and look for strategies to do so proficiently.
It might be confusing, particularly as a novice, to choose your crypto and further develop a proper tactic that would help control your assets and earn considerable income. With so many cryptocurrencies existing at this particular moment and many more to be developed, it is only normal to find it puzzling to navigate this vast market. Not to mention that most cryptocurrencies are highly volatile, making it even more daunting to achieve your financial objectives.
But there are just as many (if not more) opportunities as downsides, and if you adopt proper strategies, you are no longer at the mercy of the market – you will get the hang of it.
Maintain a balanced portfolio
While investing in just one kind of cryptocurrency is usually more recommended initially, once you become more intuitive about the game, you should expand your investment portfolio. This will not only help you manage risks, but it will also keep you away from massive losses. That is because a diversified portfolio contains more than one type of digital currency, perhaps other kinds of assets, too, such as non-fungible tokens (NFTs), stablecoins, and central bank digital currencies (CBDCs). Thus, in the event some particular crypto dramatically loses its value and stops existing on the blockchain, you will, at least, have a second chance. And let us be honest – it could not be possible for all your assets to take such a catastrophic fall.
If you are skeptical about this, consider investing minimum funds in every digital asset and double or triple the amount as you become a more avid risk taker.
Invest in promising new cryptocurrencies early
It is a well-known fact that those who invested in Bitcoin at the moment of its release are now millionaires. Erick Fineman, Jered Kenna, and Peter Saddington are just some of the many individuals who became rich after buying Bitcoin when the coin was worth only a couple of dollars. Now, Bitcoin is the most popular cryptocurrency worth thousands of dollars. Ethereum is also a promising bet, particularly for those interested in app development.
But BTC and ETH are not the only fruitful projects out there; new altcoins are on their way. Some promise to generate significant returns according to market cap, liquidity levels, and worldwide adoption. Thus, Tamadoge (TAMA) has recently become a buzzword, and its popularity makes experts believe that it can generate considerable income if people consider investing in it early. Besides, the meme coin guarantees real utility and value to holders by means of NFT ownership and an entertaining P2E (Play-to-Earn) game. Another similar example is Battle Infinity, so you definitely have options – all that matters is to take your research seriously and document your next investment thoroughly before taking the leap.
If you are afraid to take the risk, you can invest in more stable cryptocurrencies like Bitcoin. BTC has never ceased to generate gains, especially when approached wisely, so it is a good starting point for any investor. But even so, you still have to inform yourself about Bitcoin price, market cap, liquidity level, adoption status, or any factor that might determine the coin’s worth.
Day trading is one of cryptocurrency’s most lucrative strategies to earn rewards. But remember that investing is out of the question at this point, as day traders are people who take advantage of the market’s volatility throughout the day.
If you choose this path, you should have a basic (if not comprehensive) understanding of market volatility and predict price fluctuations correctly. This is, in fact, the very essence of day trading – buying particular crypto when its price is dropping and selling when its price is rising. Volatility will bring you profit, even if it initially appears insignificant. Holding onto multiple positions throughout the day is advisable to take full advantage of this short-term volatility. Thus, you gain small but consistent returns.
Buy and hold – HODLing
HODLing is arguably one of the most sure-fire ways to make money, particularly considering beginners. It refers to the process of buying cryptocurrency and simply holding onto it for a relatively long period. Contrary to trading, this buy-and-hold strategy involves a lot of patience and often requires a “buy it and forget about it” mindset.
Some cryptocurrencies have proved incredibly valuable over time, including Bitcoin and Ethereum, so there is a great chance for your next investment to be just the same if you keep it safe and sound in your e-wallet for an extended period. Plus, you no longer have to worry about epic price fluctuations that often lead to panic. And what happens when you are panicked? You may sell your assets at a low price and later be surprised that they regained or even doubled in value.
HODLing is a long-term strategy that ensures profit and protects you from dangers.
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Yield farming is an excellent beginner strategy to earn passive income, but any crypto enthusiast can adopt it. It involves buying crypto and depositing it into a special smart contract named liquidity pool. Basically, you cannot yield-farm without a liquidity pool. Yield farming is also beneficial for decentralized exchanges, as it contributes to the financial liquidity of a particular exchange. The liquidity pool’s traders will thus receive a percentage of the fees they generate by depositing their tokens into a liquidity pool.
Other promising methods to earn crypto include:
- Buy a share in a decentralized autonomous organization
- Earn free digital goods by solving tasks
- Play-to-Earn (P2E) games
Have you just entered the crypto game? Do not worry – there’s something for everyone. You will surely find a suitable and lucrative strategy to help you achieve your financial objectives. Maybe you start by employing one of the above-mentioned.