4 Crypto Investing Strategies
To know the path, one should be clear with their destination. Similarly, before developing an investment strategy, you should be clear with what you want to achieve.
You need to have a goal, short term(❤ yrs) or long term(3+ yrs) and then develop different paths, strategies to achieve this.
For eg- Goal could be to have $10,000 in cash flow by the end of the year 2022. OR to pay off debt of $5000 etc. Today we’ll be sharing with you some amazing strategies to help you achieve your financial goals.
FOR PASSIVE INVESTOR
If you’re someone who’s a passive investor, risk tolerance is moderate & want less fluctuations-
STRATEGY-1 ( INDEX INVESTING)
- 20–30% into BTC, 20–30% INTO ETH
- 20–30% INTO stable coins ( to buy the dip).
- Could be invested weekly/monthly/every fortnight/bi-monthly for a long term.
STRATEGY-2 ( ADVANCED INDEX INVESTING)
- Stick to any 3–4 cryptocurrencies in top 5 or top 10 according to market cap. (Recommended to include BTC,ETH).
- Invest periodically, every week/month/quarter etc.
- Invest 20–30% in stablecoins eg- USDT ( to buy the dip of coins you’ve selected) .
STRATEGY-3 ( FOLLOW BIG INSTITUTIONS)
- You can follow the crypto portfolio of GRAYSCALE or MICROSTRATEGY.
- Suggested to have 2–3 coins in top5-top10.
- Keep 1–2 coins from top 20/top50/top100, according to your range/risk.
SECTOR BASED ( FOR SEMI ACTIVE/ACTIVE INVESTORS)
- Go to coinmarketcap and choose 1–3 sectors which you understand/follow.
- Recommended to go with Layer-1 sectors like DE-FI, NFT, Metaverse.
- Select your range of coins, top 10, top 50 or top 100 etc ( Recommended Range <= Top 50 )
- Select 2–3 coins (recommended) after doing your research.
COMMON MISTAKES PEOPLE MAKE WHILE CHOOSING COINS -
- Invest in something solely because of the hype or cool name of a project.
- Buy cryptocurrencies on the basis of no of tokens/coins they can buy in $1 instead of understanding if you understand where you are investing then price is irrelevant.
- Fail to understand that for a coin/token to go 2x, they need to double their market cap & have unrealistic expectations.
4. Get glued to a project, “don’t hate them, don’t date them, just trade them
5. Never understand that what goes up, comes down & what goes down may not always go up.
6. Don’t understand that the faster/harder price goes up, the faster/harder it falls down.
Let’s understand point no 5 and 6 using XRP chart below-
If you look at the chart, you’ll see how it went upto 1.96 and quickly fell more than 50% to 0.8, which proves point no 6.
And it never went back up to it’s all time high of 1.96 and hence it proves point no 5.
7. Should be prepared for both situations, whenever the market goes up or goes down.
8. Select the range where you want to stop buying and the range after which you will sell and not FOMO buy or not sell because of greed.
Let’s take an BTC chart as an example to understand this-
- If you had buy range<=35K, Sell range>= 60K, then you would have easily made 2x+ returns since BTC went as low as $28.8K and went as high as $69K as shown above.
- If you didn’t have any range, and had kept on buying even after BTC went $60k+ then you would be at a loss instead, because current BTC price= $49.8K.
This is why it’s important to have a buy/sell range for both long term and short term.
9. Once the buy range is decided, then the next step would be to place buy orders below that buy range.
GOT FUNDS BUT UNABLE TO SHORTLIST COINS TO INVEST?
- Then you can buy stable coins
- You can put in sell orders of USDT at indian exchanges and then buy BTC cheap.
As BTC doubles, you can sell it and buy USDT cheap again & sell when USDT is high as shown in the chart below-
You could’ve bought USDT at 64 Rs and bought BTC with it, whenever BTC doubles then you could’ve sold that and again bought USDT cheap and ultimately then place sell orders when USDT reaches 85. Could’ve made easy money doing this.
PRESALE AND HOW TO INVEST IN THEM -
It’s an opportunity to buy coins/tokens at a cheaper price before they go into circulation.
Since these newly launched tokens/coins doesn’t have any historic data, there’s huge risk-
Points to minimize risk-
- If the presale is a layer 1 based then we might hold it for 1 year and keep on taking regular profits.
Eg- If there’s a presale which is polkadot based, then we’d invest in it since we believe in polkadot.
- Would book profit every time it hits 2x,3x etc… and reinvest every time it dip’s 30–40%.
- Investing in a project with a working platform > Investing in a project promising something which’ll happen 5 years down the line.
- Seeing the overall market sentiment before investing in a presale is a good option.
- Seeing the UI/UX of a working platform helps.
- Roadmap of the project and whether they’re delivering on it or not.
- Whether developers/team is doxxed or not.
- Are they burning tokens and whether tokens are locked or not.
Above strategies are very simple yet effective, if you have the right mindset, discipline & consistency, then these strategies would definitely help you achieve your financial goals.
- Decide what kind of investor you want to be?
- Decide the strategy you want to follow?
- Decide coins that you want to invest in?
- Decide your buy range?
If you want to learn how to generate trustfree ROI then you may like what we’re doing at Fidaro.
Here are some useful links to save and reference. Let’s go and help you achieve your goals.