Do You Need A Cryptocurrency Investment Strategy ?

 Do You Need A Cryptocurrency Investment Strategy ?

Cryptocurrency’s popularity is surging. Every day, a large number of new people join the cryptoverse. On the other hand, Beginners are frequently swayed by gossip and hype, resulting in poor selections. A good crypto investment strategy can help you in so many ways. Some companies can help you manage your portfolio. Placing your crypto portfolio with OSOM for example can help. Still, there are some things to consider before trading.

1. Begin with what you already know

You must decide based on the knowledge you have. Is Bitcoin capable of replacing gold? If that’s the case, it’s probably undervalued right now. Is Ethereum capable of replacing the current internet infrastructure? Is it possible for AAVE to take the place of traditional financial markets? Do you prefer a multi-chain world in which Polkadot, Cardano, and Ethereum coexist or one in which a single chain rules them all?

These questions will assist you in figuring out what you believe in and how undervalued the assets are right now. Then you may determine how much of each form of crypto asset you want to be exposed to, as well as which ones.

2. Do your homework

There are almost 10,000 cryptocurrencies on the crypto market. Some of them are extremely popular, while others are still battling for a piece of the pie. The question now is, “Which crypto-asset should you choose?” With your beliefs clear, you must do a thorough examination of the assets you are considering.

With all of these answers, you can evaluate each asset’s promises, the stage of its products’ development, the devotion of its team members to their corporate goal, and their success in meeting their milestones.

3. Diversify your cryptocurrency holdings

Diversification refers to not betting all of your money on a single “bet” to spread your risks.

Payments, DeFi, stablecoins, and exchange tokens, as well as many other sectors, have a range of crypto assets accessible. If you’re new to investing, we’ll go over risk, diversification, as well as asset selection.

4. Plan Entry Points

A cryptocurrency portfolio manager must be able to predict the optimal time to enter the market. It is cliché, but the goal is to buy the coins low and then sell high.

Because “time in the market is more preferable than market timing” and “market timing is impossible,” you might want to consider the “dollar-cost averaging” technique as an alternative.

5. Have an Exit strategy

Since you can’t time the market, time your strategy’s exit. If you buy a coin with the expectation that it would be worth €100 in five years, sell it when it reaches that value.

If it isn’t worth 100 euros in five years, sell it. It makes no difference what happens to that  coin after that because the stock market is an “infinite regret machine” (you could always have bought more of what performed well or bought something that performed better instead,. . . ). It’s more important that you achieve YOUR objectives.

And, before you repurchase the same asset, make sure you have a new thesis for it, rather than simply going with popular ideas.

Many trading platforms also provide a stop-loss mechanism to ensure you don’t lose more money than you can afford.

Conclusion

Investing in the crypto market entails risk, but it has also yielded a considerable amount of profit so far. If you’re careful to build a well-balanced cryptocurrency portfolio, you’ll find that the crypto market is full of pleasant surprises.

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