Cryptocurrencies are also known as “Digital Gold”. They are considered good investments and nobody ever knows how much they’re going to make. So its important to know Cryptocurrency Strategy. Starting to invest in cryptocurrencies is easy. All one needs is a basic amount to invest and they’re ready to get started.
Cryptocurrencies unlike real gold lack intrinsic value. If left alone they’re useless. The real value lies in the user. The more cryptocurrency a user accumulates the more value the cryptocurrencies have and their price rises.
But if the value of the cryptocurrencies goes down then there’s no saving it. The user has to wait for a better time and wish that someone else buys off the cryptocurrencies. When the rates are higher and the user can sells it at an increased rate than they have initially invested to gain profit.
Many types of cryptocurrencies are available in the digital market to invest. Some are safer bets than the others and some are riskier. Examples of various cryptocurrencies are
The user using this cryptocurrency gains the opportunity to have their own blockchain. Giving them access to their own ledger. This Cryptocurrency gives three perks of its own which are having no fees while trading.
It’s focused on creating digital assets instead which is inclusive of everyone. Plus their eco-friendly. There’s no need for printing or mining new tokens. That makes it quick and easy to use. It can also be purchased from several exchanges allowing coins for payments.
One might even say that these can become a bank with an approximate market capitalization of $1 billion. The risk still isn’t any less. It operates on the Ethereum platform and the CEL tokens have multiple platforms.
It can be also used as collateral to secure loans. It’s focused on lending, borrowing and earning crypto. CEL is a way to earn passive income.
Also known as “the Chinese Ethereum” and formally known as “Antshares” has an approximate market capitalization of $1 billion as well as Celsius (CEL). It is one of the earliest and largest cryptocurrency ventures in china.
Founded in 2014 by Erik Zhan and Da Hongfei. Users with the help of NEO can also develop digital assets and smart contracts because it’s a blockchain-based platform supporting its own currency.
Read Also: Digital Marketing Strategies
And there are many types of cryptocurrencies one can choose to invest in and start with their journey. Still one must be aware of the different strategies to choose from before investing and this article is all about that talking about 21 different strategies of CryptoCurrency.
Trading Cryptocurrency Strategy
The market is volatile and it’s best to know about the trends and strategies in the market before one starts investing.
Trading is the simple process of buying cryptocurrencies and selling them at a higher price than the initial rate. It carries a lot of risks and has small benefits in comparison to investing and has short term benefits rather than long term benefits.
Position Trading Cryptocurrency Strategy
Although it’s trading it doesn’t always have to be short term. A user is buying cryptocurrencies and waiting for the market rates to go up. Selling them when the time is right and gains are usually more beneficial than usual trading.
The trading is done in a day’s time. The user buys the cryptocurrencies on the same day and sells them off on the same day as well. Making short amounts of benefits from them.
The Bot is customized to trace, scan and analyse the market according to the user’s goals of benefit. The user is buying and selling crypto currencies based on the information available by the bots and can set short term or long term goals at their own convenience.
The trading is based on market trends and a good discerning eye for undervalued cryptocurrencies. The users using this strategy can even set a goal of a month waiting for the rates of the undervalued cryptocurrency to rise up and sell them on the market.
The strategy follows a support level and a resistance level. The support level is the highest rate of a cryptocurrency reached within a certain rate of time and the resistance level is the lowest rate hit by crypto. The strategy is to buy cryptocurrency at the resistance level and sell it on the support level within a certain time period.
In this strategy, the user needs to be on their toes since it involves making quick decisions with a strategy. Scalp Trading or “Scalping” is a short term trading strategy in which the user sells the cryptocurrency when there’s a small rise in its value and the belief that follows this method is that over time small gains accumulated becomes large gains.
Balance out your investment portfolio by investing in different cryptocurrencies. There are many kinds of cryptocurrencies to choose from it is not wise to invest too much or all of them in a single type of crypto. When the market value of the currency will go down it will result in total loss. To avoid that invest in many kinds of crypto so that when one kind of crypto currency’s rates goes down there are still benefits from the ones whose rates have gone up, balancing out the profits instead of resulting in a total loss.
It’s exactly as it sounds, reinvesting the profit previously gained to gain even more profit. As cryptocurrencies lack intrinsic value the value is created by the user, so the more cryptocurrencies a user has the more value is generated. So the user can buy more currencies from the profit they’ve gained and generate even large amounts of profit from it.
This strategy requires a user to have a portfolio as it is the process of buying a cryptocurrency from a market and selling it to another at a higher rate. “Spread” is a term used in this strategy that is equal to the profit a user makes as spread can vary every time a user sells a cryptocurrency on a different platform. It’s the difference between the rates of the same crypto currency’s rates on different platforms.
Crypto currency Brokers
There are brokers for the cryptocurrency that do not provide a safe platform for transactions but also analyse the market for the user and based on the analysis the user can choose how to invest in their cryptocurrencies with a set value for return.
This method is simply taking out the average of the total amount to be invested and investing the average amounts on different cryptocurrency platforms to reduce the risks of volatility. It is the process of investing equal amounts of money in a systematic way.
Stacking Coins and Tokens
This strategy involves putting aside an amount of cryptocurrency and gaining interest in it, which in the digital market is referred to as points. It’s similar to holding a bank account in which the user keeps a certain amount of money and receives a certain amount of interest on it.
This strategy involves the trajectory of a trend in the market changing its path which a user needs to detect. The change of the trajectory can happen for a day a month or even as low as one to five minutes. The user needs a discerning eye to figure out the pattern of reversal and invest in the cryptocurrency.
This strategy is simply investing in a cryptocurrency whose rates are rising every moment. Considering the speed of increment of the value the user will invest in a currency to a point in time. Calculating the rate of the currency, at the exact point of time the user will make a profit.
This strategy is simply going with the flow. If the digital market is doing well, the user will invest in long trends and if the trends or the digital market is going down then the user will invest in short trends.
This strategy works when cryptocurrency doesn’t. Most profits are made when countries ban cryptocurrency. This strategy is for when the market volatility is high which simply means that the user is going against the trend and investing.
This strategy involves buying different crypto assets accumulating them and putting them all together to create a token and benefitting from all of them at once.
Lack of Leverage
This strategy involves the process of using small amounts of cryptocurrencies to open up possibilities of greater positions to gain profits. This strategy is also high risk-taking.
This process involves analysing the history of assets and figuring out indicators about future price movement resulting in gain or decline.
High Frequency Trading
This strategy of trading crypto currency can be simplified as automated scalping. Bots use algorithms to execute trades and is more frequent and precise at generating profits. Manually it takes more time and the calculations are riskier.