Cryptocurrency investments form a considerable part of investors’ portfolios these days. Although normal stocks remain popular, more and more investors are diversifying into cryptocurrency these days.
There are tools to help you check your potential profits, charts to help you monitor price movements and trading volume, and well as concise articles on different tokens and exchange platforms.
The market is incredibly volatile, and a token whose value rises by 10% this month can suffer downturns of 50% the following month. To stay in the green, you should join platforms like CoinStats and enjoy the tools they have on offer.
The overall target is to secure profit. Any investment worth putting money into should yield significant returns on investment. Also, the rules state that the more you put in, the higher your returns. As such, many investors are apt to channel even more funds into profitable ventures.
However, cryptocurrency is not like normal stocks. Its rules are very different. Putting a lot of money into it is no guarantee of making quadruple gains. In fact, experts advise that you only invest money that you can lose.
Still, that is not to say that cryptocurrency investment is a game of chance and luck, such as sports betting. It’s a whole market and economic ecosystem of its own, with its rules and opportunities.
And several inherent opportunities will make pragmatic investors secure profit regularly. This is not to say that you won’t lose at all. In fact, you’re likely to lose as much money as you win in cryptocurrency investment.
With a well-timed investment decision, you can invest as little as $1000 and get double the amount in less than a month. Provided the market retains bullish attributes, you can hold on to a token that you bought at a floor price, hoarding it till its value spikes and peaks, before selling it.
Simultaneously, an ill-timed buying spree can leave you with low-demand tokens and have stagnating, even retrogressing values. In this article, you’ll learn a few crypto investment tips to help you earn rather than lose:
Buy low, sell high
As a cryptocurrency investor, the first tactic to making a substantial profit is to ensure that you adhere to the simple mathematics profit formula- profit equals cost price minus selling price.
For example, if you purchase a quantity of BSV worth $10,000, selling it for anything less is a loss. In the worst-case scenario, you want to recoup at least 100% of the original outlay in the worst-case scenario. That way, you will not have made any profit. But at least you’ll have the bulk of your funds to reinvest as you wish.
In cryptocurrency investment, buying low and selling high is very important. To master the art, you’ll have to make a point of it to study chart movements and price actions. A token in freefall is a good target, especially if it’s likely to rise again in the future.
And, you can be fairly certain that it will rise again, given that it’s not one of the hundreds of scam altcoin tokens that infest the blockchain today. Nonetheless, you should be wary. When a token’s value drops and everyone is rushing to sell it off, you might want to put off trading it for a little longer until you’re sure that the value cannot drop further by any considerable margin.
Just as well, you should be equally prudent when selling off assets you bought at the floor price. This way, you can take advantage of the highest spike and make maximum profits.
Use a crypto calculator
If you trade regularly and have a vast portfolio, you should consider using a cryptocurrency calculator.
Many factors go into deciding whether or not you’ll secure a profit from your investment scheme. The value of the token you’re trading is just one aspect of the entire thing. Depending on the network you’re using, there are deposit fees, trading fees, exchange fees, and other small commissions.
If you’re using the Ethereum blockchain, you may have to pay gas fees. The same applies if you’re dealing with an ERC-20 token.
With a crypto calculator, you’ll be able to monitor your earnings and note exactly how much you’re profiting or losing per transaction.
Also, you’ll be able to note the tokens that have been performing well, so you can pump more money into them. Without a crypto calculator, it’ll be incredibly hard to keep track of earnings without a crypto calculator.
The reason for this is that the market is incredibly volatile, and prices change on an hourly basis. Everything is so rapid that you can be deluded into thinking you’re earning a good profit when you’re actually stacking up losses.
Diversify your portfolio
It’s impossible to overemphasize this strategy, as it’s a rule that many investors still fall afoul of. The trick is simple, and the logic is this- don’t put all your eggs into one basket.
No matter how profitable a particular token has been for a while, investing all of your funds into it would be an error. In the eventuality that there’s a downturn in its financial fortunes, you may face the prospect of losing 100% of your crypto portfolio.
To stem your losses and increase your chances of winning, you should spread out your portfolio over at least three tokens. That way, everything is evenly spread out, and you won’t take an irrecoverable hit whenever the market gets bearish.
Nevertheless, market volatility can still take on some strange downturns, such as the current market depression that has persisted since the start of 2022. Since then, nearly all the major altcoins and Bitcoin have seen their values drop considerably, with no upturn in sight as yet.
This serves to enforce further the rule that one should always diversity one’s portfolio as much as possible.
Be pragmatic
Cryptocurrency investment is a game of numbers, and there’s no room for sentimental decisions. If you have to make a withdrawal, trade, or deposit, all of your choices must be made with pragmatic logic.
You can’t invest in a coin simply because you like its logo or the founder is a popular celebrity. Watch out for serious projects with innovative whitepapers and a good track record.
In summary, you should avoid impulsive buys.
HODL
Hodling is a time-honed art in investment that yields bountiful rewards to investors with long-term strategies.
The prevailing volatility of the cryptocurrency market means that there’s a very good chance that short-term strategies can yield profit. In fact, the latter is the preferred strategy for most investors, who accrue steady gains on daily trading.
HODL refers to “hold on for dear life.” When an investor uses this strategy, he forgoes short-term gains for long-term windfalls.
This is what happened to the pioneering investors in Bitcoin. They held on to their digital assets, and watch the value of the token soar, “holding on for dear life”, as it were.
Today, they’ve earned big, with many years of patient investing having paid off.
Conclusion
Cryptocurrency investment is not something to be hurried. Neither is it something to go into blindly without first understanding some basic principles.
If you play by the rules and formulate great strategies, taking into consideration as many factors as possible, you’ll make far more than you’ll lose.
