What are the cryptocurrency investment strategies? How to invest cryptocurrency for a long time?
In just a decade, cryptocurrency has developed into a meaningful asset class. The well-known BTC (BTC) and ETH (ETH) have both risen sharply, and thousands of virtual currencies have emerged in recent years. But not all cryptocurrencies can produce the same profits, and some cryptocurrencies are relatively unstable. Therefore, some novice investors asked, what are the cryptocurrency investment strategies? What should we do if we invest in cryptocurrency for a long time? Next, let's have a look.
What are the cryptocurrency investment strategies?
1. Average cost method
Mean Cost Approach (DCA) is one of the most popular investment methods in fluctuating markets such as digital currency industry. The countermeasure is to invest a fixed amount at a specific interval, rather than a one-time investment, regardless of the bearish or bull market trend. Investors can use this method to cope with rapid market changes.
The risk of the average cost method is low, because it is committed to stable and long-term profits, rather than rapid and substantial profits. If you want to invest in cryptocurrency, time period plays a particularly important role. If you buy or sell at the wrong time, you may face the risk of losing all your capital. But by using the mean cost method, you can minimize business risks and maximize profit opportunities.
2. Eliot's wave theory
If you want to obtain rich assets in the encryption market, it is very important and helpful to grasp the investment opportunity.
Choosing the perfect opportunity to enter the market will enable you to buy low and sell high. Eliot's wave theory is implemented by comparing the long-term trend of prices. Investors can determine the best time to enter and exit the market by predicting the price cycle of currency, so as to reduce losses and improve profits. However, to use this strategy, you need to study hard and have technical knowledge.
3. Buying and holding countermeasures
Buying and holding is also called HODL (long-term investment in cryptocurrency and not sold or used) by many cryptocurrency investors. In recent years, this kind of investment strategy has become very popular.
This method is popular among amateur investors because it will not involve a large number of transactions. You just need to buy digital currency and invest in your digital wallet for a long time. Investors in the season firmly believe in this method, because it is a low-risk, high-yield strategy.
4. Income farming and HODL
Another method is profitable farming and HODL, which is suitable for crypto investors who prefer medium and low risks.
This method is based on having cryptocurrency for a period of time and lending the currency to the working capital pool to gain profits. You can use your position to get an attractive annual yield. In other words, this is a particularly good way to obtain passive income, similar to the way you deposit assets in AAX Financial Treasure and earn interest.
By the way, AAX launched a limited time event "Financial Marathon" on September 15, with a total reward pool of 300000 USD. As long as the more copies passed, the more rewards will be obtained. You can get rewards by subscribing for each copy of regular financing to reach the milestone and participating in the completion criteria of gas station activities.
For users who often subscribe to regular financing, this is an opportunity to obtain additional rewards while subscribing to regular financing. Try it!
Cryptocurrency ETFs (exchange traded open-ended index funds) use traditional methods to invest your funds in convergent investment securities like mutual funds. You can use cryptocurrency ETFs to access diversified crypto assets and manage risks at the same time.
The risk of ETFs is relatively small, because these funds are generally linked to major cryptocurrencies such as BTC and Ether. This means that you don't need to invest too much effort, and ETF managers may manage your property on your behalf. However, one of the disadvantages of this method is that they usually deduct huge management fees.
How to invest cryptocurrency for a long time?
When it comes to long-term investment in cryptocurrencies, the main idea is "buy and hold" or HODL. This basically represents the purchase and storage of cryptocurrency, rather than looking for the next sales opportunity when the price rises.
The strategy chosen by many investors to do so is the dollar cost average (DCA). It looks like setting aside $10 or $100 a week or month to buy cryptocurrencies like BTC or ETH.
The average dollar cost is an investment strategy. Investors break down their total investment into smaller regular investments rather than one-time investments. By purchasing crypto assets over time, buyers reduce their risk of market fluctuations and price adjustments. The average cost method is also a good countermeasure for investors who are new to the market or are uneasy about the sharp fluctuations of prices.
More savvy investors will try to buy once when the market bottoms out. However, it is difficult to do this well. Even very experienced investors may try to integrate the application of DCA and market opportunities - they may widely use DCA, but once the price falls far below the initial expected level, they may increase their distribution.
Long term cryptocurrency investors will also pay close attention to the planned network upgrading, strategic partnership, roadmap and other key project milestones to confirm the growth prospects.
In addition, they will pay close attention to such data as liquidity, market value, trading volume and adoption rate.
Speaking of this, I believe you have a certain understanding of the cryptocurrency investment strategies and how to invest in cryptocurrency for a long time. In general, in the encryption industry, people often hear about the ups and downs of many projects. However, considering how easy it is to establish a currency, it is not surprising. In addition to the above investment strategies, before joining the project, it is important to master the token economics, functions, use cases, founders, development teams and project investors of digital currency.