Top 5 Crypto Investment Strategies 

Updated on 25 November, 2022 10:38 AM
1 min read

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    With time the cryptocurrency craze is going exponentially. People are understanding the potential of the crypto markets. But, without knowledge, it can be difficult for new investors to earn profits. Investors are figuring out different ways to incorporate cryptocurrencies like Bitcoin and alternative coins into their portfolio of traditional investments. 

    In this article, we provide a detailed strategy to help young and experienced investors invest in cryptos efficiently without much risk. While managing your crypto investments remember these fundamental investing strategies to have a safe and secure crypto investment journey.


    Choose the right mix of storage

    While managing your crypto, prioritize safe storage to keep your cryptocurrency safe. You can store digital in either hot(software wallets) or cold storage(hardware wallets). Experts advise storing the majority of your cryptocurrency in a cold wallet to prevent hackers from gaining access. You can use the hot wallet for short-term investments but for long-term investments, you should keep 80% of your digital assets in hot wallets.


    Prioritize liquidity

    Go for liquidity specific cryptos to easily convert to cash while maintaining their value. Liquidity determines whether traders can enter or exit a trade at the desired value. In fast-moving crypto markets, traders need to move in and out quickly of positions. For example, Bitcoin is the most liquidity crypto that you can opt for investing. While Measuring liquidity, check trading volume, buying and selling of the coin, and investors' overall interest in the asset.


    Buy and hold crypto

    You can use the buy-and-hold strategy. This strategy helps you maintain a stable portfolio, irrespective of fluctuations over time. This strategy is denoted as “HODL” (Hold On for Dear Life”) and is interpreted as ‘HOLD’.


    Dollar-cost averaging strategy

    You can use another popular cryptocurrency investment strategy called Dollar-cost averaging. It lets you invest in increments at regular intervals like SIPs. It reduces crypto volatility impact by averaging the purchase price of the crypto.


    Value Investing

    Value investing is one of the most effective strategies among all cryptocurrency investing strategies. Value investors analyze real-life use cases, scalability, background of the founding team, adoption, community engagement of the competitive landscape, and blockchain network.


    Maintain a balanced portfolio

    You should maintain a balanced crypto portfolio to profit from the overall growth and adoption of the cryptocurrency market. If losses are incurred in any single crypto, it will not impact the portfolio much. Rebalance your balanced portfolio periodically to tackle market volatility. 


    Invest what you can afford

    Invest the amount that if lost won't affect your overall worth. Don’t invest by hearing from others or just not miss the trends., Invest in something you understand and in the long term efficiently can continue without much risk.


    Diversify your crypto investments

    Don’t put all your investments in one or a few cryptos. Make your strategy and select a bunch of cryptos for investing. Always diversify across different digital assets associated with cryptocurrency and blockchain, including the internet of things, non-fungible tokens, and DeFi projects. It minimizes risk in crypto investing and helps you gain worth in the long term.


    There are many other strategies that can be used to enhance your investment strategies, depending on your priorities, however the ones listed above cover some basics which will surely benefit you in the long term.

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