When you’re planning to invest in cryptocurrency, you need to treat it as an actual investment. However, cryptocurrency is a digital asset that mostly without any physical appearance, but your investment portfolio is quite real. Follow some of the investment strategies we layout in this article if you are a crypto investor.
You may think about the future when investing in any asset, and cryptocurrency isn’t an exclusion. When it comes to the future cryptocurrency to invest as your portfolio, you should set long-term investment strategies.
Cryptocurrency is known to be volatile and unpredictable, while we’d not know what would happen with the digital asset’s existence or valuation in the future. Fortunately, we can observe factors to give you a clue about the future cryptocurrency to invest in your portfolio.
Before start, know a little bit about What is Cryptocurrency?
Future Of Cryptocurrency Investment Strategy
Investing in an asset, whether it’s stock, properties, commodities, and cryptocurrency, requires you to have clear goals, and you’d achieve them. No investor is investing without the goals and calculated strategies.
When it comes to future investment, you need to define your “future” or how long you’d hold the investment and the profits you want to achieve.
Cryptocurrency is not an investment exception. When you’re planning to invest in particular cryptocurrencies or ICO offerings, you need to build investment strategies despite its volatile nature.
Speaking of the future investment, we’d consequently discuss the long-term investment strategy covering your goals for months or years to come.
When it comes to the future cryptocurrency investment strategy, you’d expect the one that could perform better for a longer period. However, the period isn’t the same with other assets as cryptocurrency would recognize a “long-term” period of 6-12 months instead of multiple years.
It also depends on establishing the cryptocurrency itself, as some investors may hold their investment for years. On the other hand, the way you also invest matters. Some investors may make one total investment, while others may split it into batches.
Generally speaking, you’d need to diversify your cryptocurrency investment portfolios. Follow
Step 1: Setting Your Goals
Like any other investment portfolio, you should have clear goals on cryptocurrencies to invest in for the future and what you want to achieve. Without a clear objective, you’d likely end up losing your money on cryptocurrency investment. Here’s how you can set your own goals:
When you choose to hold on to your cryptocurrency portfolios, you’d likely deal with two primary options.’ First, you’d hold and sell your cryptocurrency after a while. Second, you’d keep and sell them as they’ve reached a specific price level.
Either way, you should choose the one that suits your vision considering the feasibility after monitoring the cryptocurrency’s actual progress or performance.
Decide When and How You’d Sell Your Crypto Investment
When researching cryptocurrencies, you’d have a clue on the best way to purchase and sell them. Before choosing one, you should consider whether you’d sell them after a particular time or after a specific level or price.
When in investment planning, you should have recognized the character of each cryptocurrency. Whether it’s time-based or price-based selling, the decision would be better if applied to each portfolio. It’s because cryptocurrencies have different performances and characters in the market that require different treatment. You need to decide how much to invest in cryptocurrency for long-term investment.
On the other hand, you should be clear on how you’d sell your crypto portfolio when the time comes. Decide if you’d trade all of your investment at once or sell some at different times. You need discretion for the best decision, and you’d find it not difficult as long as you do your homework, including researching and monitoring your digital assets properly. At this point, you can make your crypto investment goals clearer.
Consider Events That Affect Your Investment
Some events can potentially affect your cryptocurrency investment in the future. Whether it’s global economic events, political issues, or new regulations, they all could affect the projected prices of the cryptocurrencies in your portfolio.
These events could have been inevitable, but you can anticipate your crypto investment from the harmful impacts. For anticipation, can sell the affected cryptocurrencies sooner than the determined date or level of price.
However, you should also note that each cryptocurrency may react differently to events. Of course, public events affect most cryptocurrencies, but some events could be more damaging for particular digital assets. It’s because cryptocurrency issuer companies may run different types of businesses affected the circumstances differently. When setting crypto investment goals, you should recognize the industry as well.
Step 2: Choosing The Cryptocurrency
You should research multiple fundamental factors and elaborate on choosing the cryptocurrency you’d finally invest in. It would take some time to observe the factors below, but you’d end with the best future cryptocurrency to invest in and the best possible profit rate.
The cryptocurrency industry relies on technology. Blockchain technology processes these transactions. However, as the cryptocurrency grows in demand and network, it will face significant challenges, including speed and security. Even strong cryptocurrencies like Bitcoin and Ethereum continuously develop the challenge.
Ethereum has smart contracts on their blockchain that automates transactions. Many new cryptocurrencies currently adopt this system. Check whether the technology used in their ecosystem is better than their competitors.
Founders and Developers
The team behind the projects, especially the founders and developers, determines the prospect of the cryptocurrency. The fast-growing cryptocurrencies with progressive market capitalization always have a strong team behind them. Both founders and developers are experts in the industry.
You can research further on the successful Binance, Tronix, Ripple, EOS, NEO, BAT, and so forth. Leadership and technological skills represent how cryptocurrencies drive and sustain changes in the future. Remember, many cryptocurrency projects don’t continue after their ICO.
Project Plan Whitepaper
To better understand the cryptocurrency you want to invest in, you need to learn the project’s roadmap. During ICO, the companies usually distribute the white paper that contains critical information about the new blockchain projects.
This paper describes the projects’ technology, services, products, and methodology to the investors. You can learn what they plan for the future. Remember, a white paper is like a proposal, so you need to compare blockchain projects and figure out the best one.
Planning to Invest? Read 10 Biggest Mistakes You Should Avoid When Investing in Cryptocurrency!
What They Do With your Investment
With the growing popularity of cryptocurrency investment, the market would consequently get more competitive. At this point, you need to consider what activities or business they do seriously. For example, blockchain projects run the browser business that provides rewards for the content creator, information provider, and user/end viewer.
Some projects link their business to the gold mining industry, digital companies, farming, and so forth. At this point, you can research their business performance and prospects for the future.
Generally speaking, worthy blockchain investments are the ones that answer real-world problems. Such business areas would create sustainable demand that would sustain the cryptocurrency. However, there are also fundamental factors you need to consider, including liquidity, market capitalization, ICO, and so forth.
Note that cryptocurrencies are generally volatile. When it comes to established cryptocurrencies, you can have a valuable clue if you carefully observe their record, significantly when their prices drop.
At this point, you need to elaborate on all of those factors so you can figure out whether cryptocurrency is worth investing in the future before deciding on one. Take your time to research cryptocurrencies or initial coin offerings(ICO), and you can use the factors above as your guide to investing.