We’ve constantly witnessed a sporadic volatility in the cryptocurrency index prices. Over the course of the price fluctuations, some coins have gained value, while some have equally dropped. There have been successful cryptocurrencies to invest in, and bitcoin has already demonstrated that. The cryptocurrency price trend is always changing because the investors pump and dump investments. Yet, the question of how to invest and pick up a good cryptocurrency is still prevalent among crypto traders. There isn’t any good or bad cryptocurrency, rather a profitable coin, depending on the trader’s asset allocation.
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The nature of cryptocurrency does not require a mandatory knowledge of the technicalities associated with the technology. Since most of the traders have been following the crypto market, however, this implies that every crypto trader stands the chances of profiting from picking up a good cryptocurrency, and can also fail to profit. As the crypto market is not annualized, the price is deemed to rise and fall over a timespan. But having a well structured investment plan could set a trader aside to picking good cryptocurrency. There are a few investment strategies crypto traders may consider.
Breaking down investment strategies for making a good investment decision in two-pronged approaches are as follow:
The first approach is owning the coin or purchasing future contracts. There are different ways of doing this - either by purchasing from Bitcoin or Ethereum. It may demand a leverage plan of other coins in case of drawbacks. In this approach, if one purchases Bitcoin today, the asset could only be held for long, despite price fluctuations. This method is neither suitable for bullish market nor bearish market. Purchasing cryptocurrencies for future use in expectation that they increase in cost may render the trader penniless. Irrespective of the trader’s large capital, this method seems to be costly in ROI because it is unwieldy predisposed to any disaster. Putting one’s eggs into one basket will result in having only one escape route in the event of disaster. However the leverage purchasing future contracts may leave the possibility of which the investors can’t afford to witness a price decline, while allowing it to squander all their investment funds.
The second approach is diversifying and committing to daily trading. After purchasing several coins and separating them into two categories: (a) daily trade of a particular coin; and (b) daily trade of several coins on several exchange platforms. This method most likely offers the greatest potential return, and as well exposes the trader to risk. It requires energy, investment time to study coin announcements, follow up with the coin community on social media platforms to be well informed of recent events. Trading in this way will liquidate other digital assets that have devalued. However, the CoinMarketCap is heavily weighted towards the volume of trades, so if a coin experiences a decline in prices, the traders could see a negative return even if other coins experience robust price increases.
In other words, diversifying investors’ assets regardless of the amount invested, allows the investors several options, and less troubling with the increased volatility of the crypto market. Several cryptocurrencies like Bitcoin Cash, EOS, and Litecoin were established for good alternative investment sources for investors. This method is less likely to expose the trader to market risk of a sharp price decline in any of the coins. Despite the diversification, other cryptocurrencies indexes are even more likely to profit only when markets continue downward price movement, especially, less traded coins.
To strategically forecast on the profitable cryptocurrency to invest in, depends on the demand for a particular coin. This means that the influx of investors in a particular coin determines the very nature of that coin. The more people buy, trade and demand the coin, the more the value increases. In order to be informed, investors may choose coins based on the project road map of the company or following the company’s white paper for any announcements regarding the development of the coin.
The emergence of cryptocurrency has caught the eye of Thailand to embrace the state-of-the-art of blockchain technology. The next phase upon which Thailand may look into is the utilization and the integration of the elegance of blockchain technology to businesses. And this development is the reason behind the establishment of a Thai crypto exchange platform like Bitkub.com, after being listed in CoinMarketCap, to assist traders in Thailand to buy and sell crypto to fiat money (THB). The platform focuses on the end user experience, offering a user friendly platform for traders to invest in cryptocurrency.
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