(Newswire.net — September 21, 2018) — If you want to invest in cryptocurrency, you need to understand the different strategies available, so you can make profits and not lose your money. There are several cryptocurrencies available, and you need to study their volatilities, what their blockchain is built on and how external factors can affect them.
Some cryptocurrency investors adopt a long-term strategy where they buy coins at low prices and stash them away for years. Others prefer to trade different cryptocurrencies on a daily basis, raking in marginal profits from them. We’ll look at different cryptocurrency investment strategies.
1. Long-Term Holding
With this strategy, you buy when the price of a cryptocurrency is low and sell when it is high. For example, Bitcoin was once priced as low as 1 Bitcoin for less than 1$. But at a point in time, the price of Bitcoin was as high as $20,000. So, early investors made a lot of money. Some bought at a time when it was priced at $3000 and still made a lot of profits. Other cryptocurrencies like Electroneum and Ethereum were priced low before their price shot up.
You can adopt this same strategy and make a lot of money for yourself. Look for coins that you think their value will shoot up in the future and buy them.
2. ICOs
ICOs stand for Independent Coin Offering. A lot of cryptocurrencies adopt ICOs which is much similar to initial stock offerings where early investors have a chance to own a certain number of coins at a low price. These coins will then be worth a lot of money later as the coin is adopted by more users and the value shoots up.
A lot of these cryptocurrencies are based on smart contract ICOs like Cardano and Ethereum. Some of these ICOs may not improve in value, but a lot will see their value go up.
But you need to be careful in adopting this strategy as there are a lot of scam ICOs now. You need to check the background of those that introduced the coin so that you won’t be scammed. You are less likely to be scammed with an ICO that is backed by trustworthy people.
3. Day trading
Cryptocurrencies are highly volatile, and prices could increase or drop as much as 50% within 24 hours. News like a major exchanger dropping a coin or government regulations can affect the price of a coin severely. Some cryptocurrency investors take advantage of this volatility and use it to rake in a lot of profits.
To adopt this strategy, you need to keep track of various cryptocurrencies and examine how the price of these coins change over time. Examine their price history and refresh news sources to get cryptocurrency news. You must be adept at converting from one cryptocurrency to another, and you will need to learn how to use different cryptocurrency exchangers or wallets.
4. Buying in a Dip
There are cases where cryptocurrencies will experience a dip and bottom out. When you buy in a dip, you can hold the coin till when it rises again and make a lot of profit from it.
To adopt this strategy successfully, you need to know how to time the market. You might think a coin has reached the dip point only for the value of the cryptocurrency to drop further. You also need to be careful not to buy coins that will die forever. Timing is key, and a lot of research is needed.
Conclusion
With the strategies mentioned in this article, you can invest in cryptocurrency successfully and make a lot of money. You need to take your time in conducting your research to ensure that you do not make a loss. Check platforms like securities.io for cryptocurrency information so you can make informed choices when investing your hard-earned money.