Now it’s time to consider the two basic investment strategy types for tokens
If you want to be a successful investor, you should know one thing. No successful investor starts making investments at the moment he initially thinks about it.
So, once you have made a decision to put your money in crypto, you need to know for sure which goals and actions you pursue and identify ways to achieve your desired results. It’s better to become an expert in what you want to invest in, or at least remain informed of current issues and news that concern your chosen field.
You may need to decide how long you are prepared to keep your investment open.
Long-term crурtосurrеnсу Investment
This kind of investment works when you anticipate tokens will increase over a longer time span. Typically, investors who use this type of strategy put their money in for at least 6 months (in some cases from 6 months to 1 year). However, when we are usually talking about long-term investments, in most cases people would expect to invest their funds for 5-10+ years.
Read the questions and statements below. They might help you to understand whether this strategy suits you or not.
- Is your strategy clear? We mean, have you set a specific amount of time when to sell your tokens or will you sell them once they reach a particular price?
- When you decide to sell your investments, would you sell all of them to receive a lump sum, or would you sell just parts of them over various periods of time?
- Define your terms, which may make you sell your digital assets earlier.
Check out these questions. They might help you to decide what tokens are better for long-term investments:
- What currency uses the best technology, in your opinion?
- Who are the founders and developers?
- Is their plan transparent and reasonable? Does their development trajectory seem to be promising?
- Do their solutions address any real global problems?
- Firstly, it makes the process more accessible. You don’t have to waste all your time dipping into the market games and changes, and you don’t have to pay attention to the overall picture (to track all currencies rate changes) all the time.
- You trust the cryptocurrency future is unwavering.
Short-Term Сrурtосurrеnсу Investment
This strategy goes in a slightly different way than the previous one. We guess you will realize that “short-term” means shorter periods of time (in order to make quick profits).
First of all, check out these questions and statements:
- What do you expect from this investment? That will help you to choose the price for tokens buying/selling.
- Try to predict possible losses.
- You need to find a little time to study the сrурtо market.
- Are you able to make analyses of the сrурtо market? If not, then read the previous statement.
- Is a short-term strategy more favorable than a long-term one? (if the answer is yes, predict how much money you will get following this strategy, or compare it with a predicted profit of long-term strategy).
So what сrурtосurrеnсіеs are suitable for short-term investments? There are some patterns:
- Low market cap.
- High trading volume — a lot of investors are trading it.
- Always try to buy tokens as cheaply as possible.
Good old Віtсоіn and Еthеrеum have been in this market for a long time, compared to some newer tokens, but it doesn’t mean the newer ones are worse or less profitable. Some people have earned a lot of money with short-term investments by trading in the newer currencies, like NЕО, Stеllаr, ІОТА, and NЕМ.
Using short-term strategy, lots of investors have made profits in a short length of time, however, there are always “pros” and “cons”.
Well, what about “cons”?
- It can take up a lot of time to check all the market changes continuously.
- Prices tend to change abruptly and sometimes unpredictably, which makes this strategy riskier and can also lead to greater losses.
- This strategy is definitely a stressful one, which requires a cool head along with good self-organization.
Put your money in for the long-term if you really believe that a project is promising, but if a project is new and people pay a lot of attention to it – be certain, it’s often better to put money for the short term. But after all, only time will tell.
Remember! You can earn a lot of money trading сrурtосurrеnсіеs, but like any other assets market, this one is relatively unstable, and you can lose money, so be ready for it. Watch out, you can make mistakes, and your predictions can be wrong!
We would like to conclude with the good old proverb “Don’t invest money that you can’t afford to lose.”
*Note: this article is a personal opinion. Before making any investment decisions you should consult with a professional.