Similar to other kinds of investments, there are a variety of strategies for investing in cryptocurrency. Some traders prefer to rapidly buy, sell and trade different cryptocurrencies and take advantage of their volatility to make a profit. Others opt for a more hands-off and long-term tactic to cryptocurrency. These traders would rather buy coins and wait for months or years till they sell or trade them.
The cryptocurrency market is full of inexperienced individuals gambling their money with no concrete cryptocurrency investment strategy. In most case, the reason people rush into investing is that they hear success stories that go viral. They learn about people that turn a small investment into a sizeable life-changing amount, and they want a piece of that pie.
However what you never get to hear are all the stories of people who wasted their capital and lost money by making simple newbie mistakes.
In this articles, we will go through some cryptocurrency investment strategies that will guide you in 2019. Make it a new years resolution to follow these guidelines and make some informed decision in the cryptocurrency investment world.
Cryptocurrency Investment Strategies – Quick Recap
2017 was a phenomenal year for cryptocurrencies without a doubt. It would be an understatement to say that the excitement drove cryptocurrencies to incredible new heights in December 2017. However, those joyous, peaceful times were short-lived. As 2018 is ending is ending, it is safe to say that after an unbelievably bearish year we are all waiting for 2019 with crossed fingers. Almost all the stated ways to make money with cryptocurrencies did not pull through.
What happened to the cryptocurrency blast everyone was expecting in 2018?
Hedge fund managers, Analyst and almost all retail investors had predicted that 2018 was going to be a year of incredible gains. Airdrops, ICOs, main-net launches, institutional investments and cryptocurrency futures (and strategies) were anticipated to boost the entire market valuation to more than $1 trillion. At the time each of these constituents of the market seemed to be a force to be reckoned with. However, we can now reflect on each of these components to see how diligent forecasts can sometimes be extremely misleading.
ICOs Flat Fall!!!!
ICOs (Initial Coin Offerings) were supposed to continue blowing up Into almost a trillion dollar market in 2018. A lot of analysts made predictions that ethereum would go up from $1400 to $3500-$4000. Now in the present, a lot of ICOs liquidated their funding for fiat, and all the hype of ICOs is almost at a standstill. ICOs are designed provide an easy way to maximize on investments. However, at the beginning of 2018, a selection of governments exerted global regulatory pressure which leads to the rapid decrease of ethereum prices. Making it less of a reality.
Altcoin Main-net Launches failed, And Airdrops vanished
Again the general agreement was that altcoins would deviate from the ERC-20 standard by introducing their main-nets which would encourage other cryptocurrency star-ups to develop their platforms. Furthermore there was confidence that altcoin value would shoot up. As many partnerships with well-known companies are leaning towards joining the blockchain revolution.
Investors were looking forward to gaining substantially from airdrops that would succeed after several altcoins changed over from Reuther standard to their main-net. However, as airdrops occurred the regularity and likely price outcome did not meet the investors’ expectations.
Even in a bear market, profits are still available.
Since the orthodox theory of investing in cryptocurrency proved to be imperfect what are the options remaining to be still to be still able to make a profit in 2019? This is probably the question almost all cryptocurrency investors have.
Luckily this is not the end; I believe there is definitely a light at the end of the tunnel. Even though bullish price forecasts fell short more often. Cryptocurrency adoption and investment platforms are entirely on the rise. From a technical point, it seems that the end of the bear market is drawing nearer. As bitcoin’s long-term current decline period is coming to an end. Analysts and investors are readily waiting for the voluntary deadline for either a downside or upside move.
The ultimate question here or rather what it should be; is what if it happens? What if bitcoin falls below the plunging triangle and the total cryptocurrency market capitalization drops further.
Well, partnerships and the blockchain adoption will go on. Exchanges will still be open for business. The blockchain technology will keep on growing, and the world will keep turning. But what about investors? How will investors make some money in the worst market conditions.?
Here are three strategic options that investors can employ while they wait for the bull market reversal.
Cryptocurrency investment strategy 1- go long on cryptocurrency startups
As for expectations investors should strongly consider re-adjusting their hopes and distribute a portion of their portfolio in too long-term choices.
There’s no doubt that the cryptocurrency market is a risky, fast-paced and may be better for day trading in 2018. However, it may be a good idea to have a small collection of coins that one can patiently wait for, for 2 to 5 years. This may be an excellent cryptocurrency investment strategy for 2019
With the intrinsic characteristic of cryptocurrencies. It is recommended to choose cryptocurrencies that have a compact partnership with well-known industry participants, that have more potential of fruitfulness in the long run. Examples of these are Ripple (XRP), IOTA, IOTA, Stellar Lumens (XLM).
Cryptocurrency investment strategy 2 – margin trading
Though spot trading permits betting only on asset’s prices that are going to rise, margin trading allows betting on assets that will lose value as well. With the use of borrowed leverage, traders can make bets on prices rising (Long) or falling (short) with more money permitted than with spot trading. The trader’s funds into a margin trade order are their leverage and margin refers to money borrowed from the broker or the exchange.
However, though it is hugely profitable, the risks are just as distinct. Margin trading requires you to understand Technical analysis very well and is mostly recommended for sophisticated traders. It is therefore imperative, to begin with, minimal amounts to nurture acquaintance. Taking time out to learn some fundamental Technical analysis. Getting more familiar with support or resistance levels and major indicators like Relative Strength Index as well as Moving Average Convergence Divergence is a good start for the inexperienced.
Cryptocurrency investment strategy 3 – running a master node for maximization of returns while gathering extra coins.
Rather than capitalizing solely on trading, investors can also consider operating a node. A node will present the opportunity to make a passive income as extra coins. However, simultaneously staying positioned to gain from the price increase of coins.
Even though operating a Master Node requires investing heavily in the beginning operators receive a reward in tokens of any cryptocurrency network that they support. Usually, the compensation is between 5 to 20 per cent of a block reward. These rewards are meant to reimburse operators for the expense of running the node. In 2017 operating a node required a lot of capital. However, this years bear market reduced the cost significantly. And the chance to make passive income on a cryptocurrency investment with this strategy is worth considering.
Final thoughts – cryptocurrency investment strategies for 2019
2018 has been a traumatic year for cryptocurrencies. And it is difficult to argue against that reflection unless one shorted the market. Even though the greatest analysts in the world are firm in their certainty that cryptocurrency prices will rise in 2019 nothing is certain. A lot of investors learnt in 2018 of the dangers in making predictions in a developing market.
Traders and investors need to consider a multi-pronged strategy that will safeguard their long-term vision for this promising sector. They should look further than short-term theoretical gains. With the 2018 cryptocurrency assessments at lows, this may be the perfect time to take stock and organize some concrete investment strategies.