This is not the first rodeo for cryptocurrencies to make rounds in mainstream media outlets. The only difference now is that because of the pandemic, more eyes are glued to their screens and were able to observe this bull run.
 |
| "close-up-view-of-a-golden-coin" by Pixabay is licensed under CC0 |
Buy Cryptocurrency
To have an effective buying strategy, you need to actively listen to Social Media rumors. Rumors coming from these platforms are technically 'fresh and raw' compared to TV outlets. Thus, it can (intentional or not) somehow affect a cryptocurrency's price. Take for example Elon Musk's SocMed trail, when he tweeted about investing in 'this or that' cryptocurrency, the price of the said crypto rises.
Same with the Stock Market, the big whales are the ones affecting the price movement. These big companies are moving large amounts of money that let them move the price scale. The big problem is visibility, unlike the Stock Market where all transaction trails are available to the public, cryptocurrency transactions are not that open. But thanks to Social Media platforms, data are available for the very reason that these companies are broadcasting their portfolio to entice retail investors to buy also.
Investing Cryptocurrency
However, not all the time you will be glued to social media waiting for the news. For the best part, you will have your own life to take care of.
So what will be your best strategy?
There is no one-size-fits-all solution but you will be banking on a strategy that has the highest probability.
- Prepare your heart and mind - Crypto is very volatile, it can move either up or down in a matter of minutes.
- Money you invest must be disposable - Meaning, you invest and forget. Don't be that other guy who buried himself in debt, in the hopes of making it big in crypto that ended up not happening.
- Don't look at the price - Cryptocurrencies are flying to the moon, so once you have the funds, buy crypto. Don't wait for the magic news that will cause the price to drop because you will just end up in regret. Take for example Bitcoin, during the start of 2021 it was around US34,622.37 (Php1,654,370). If you think about this as expensive, then how much more that it is around US53,260.3 (Php2,544,951) now.
- HODL the Door - According to legend, it was HOLD but was misspelled to HODL. However, it didn't stop the denizens of the Internet to give the word new meaning. Now, HODL means - Hold On For Dear Life.
- Reap that juicy crypto Rewards - For you to remain motivated in HODLing, take profit also. Profit-taking has different strategies, pick what is comfortable for you. I'll be sharing my strategy at the end of this article.
- Consistency is key - At first, it will initially need external funds for your investment to be up and running. Once you reach your target profit, you can just reinvest and have it self-sustained.
- Patience is a virtue - Crypto or any investment vehicle, in general, can make you wealthy. But also accept the reality, that a small capital will also yield a small profit at first. If you are not a big whale, TIME is your greatest weapon to make up with the difference. Meaning, you need to think 'slightly' long-term.
- Risk Management - Sometimes HODLing just ain't enough. Crypto is volatile, its price drop can cause a frenzy to the players. You need to apply some form of stop-loss strategy. This is very applicable if capital preservation is your concern. Especially, if you violated point # 2.
My Crypto Profit Taking Strategy
- Initial Capital is 50
- Deploy capital
- Apply the 8 step best cryptocurrency strategy above
- When capital is doubled, take profit. Sell 50
- Cash out 25 (50% of the profit) as your reward. Reinvest 25.
- New capital is now 75.
- Repeat process.
Takeaway
The strategy above is by no means the holy grail in cryptocurrency investing. This is true if you are investing in some still unknown (there are more than 2000 in circulation) cryptocurrencies. But it is better to have a guiding light than just attributing all to luck.
Quote
