beginingCryptocurrenciesBitcoinKey to success in crypto

    Key to success in crypto

    Cryptocurrency is an extremely exciting market to invest in. Crypto could cause the biggest wealth transfer we've seen in generations. It is the thought and the idea that attracts so many to the space. To be able to change your financial destiny overnight. But the opposite may be true. Yes, you can make profits beyond your wildest dreams, but just as quickly you can be thrown back to the harsh reality of losing everything. While it may seem that many in space get rich through sheer luck; usually this is not the case. What more often happens is that the people in this space who have the most success have also made a well thought out plan and stick to it. The point is, right?

    Yes, as I mentioned above, there is always a chance to pick this coin to make 200x by buying at the bottom and having the willpower to hold until it peaks. This is usually not the case and it is a smarter idea to make your own plan or strategy and decide what type of crypto investor you want to be. The answer will vary for each person. Everyone is at a different point in their life, has a different financial situation and has different obligations. Therefore, what might be a good strategy for you might not be for the next person.

    The first thing you need to decide is how long you plan to be in the market. If you are a true believer in bitcoin and cryptocurrency like me and plan to invest in the space for the long term. Then it would be a good idea to invest in the blue chips that will most likely still be around. That would be Bitcoin and Ethereum and maybe a few others. Although these coins will most likely make huge profits over a long period of time, they may not match lower value alternatives. Therefore, if you are trying to make as much money as possible. Then you might want to invest in these lower limit options. Although with great reward comes great risk.

    And that brings me to my next point. Do you want to take huge risks or take a slightly safer route. Taking huge risks can be categorized as investing in Meme coins, it is only in smaller cap altcoins, trading and leveraged trading. A safer route would be to invest only in lower risk options like Bitcoin and Ethereum. You will take the long-term approach and hang in there. Since you are in it for the long term, the daily price should have little or no impact on you. But if you take the riskier approach, daily price action can have a much more significant impact on you. This can become a very stressful experience that affects your sleep, your personal life, and potentially even your health and mental health. My personal thinking is that I'm just investing in the crypto itself; this is already quite risky. Investing in the lower-cap options only multiplies this risk. However, I openly admit that I experience large amounts of potential profit on the table by doing this.

    Now that you have acquired your crypto; you have to decide what to do with it. Since I'm long bitcoin and ethereum, I like to lend them out to earn compound interest with them. As Albert Einstein once said, compound interest is the 8th wonder of the world. It can appreciate much faster than you think and help you grow your portfolio much faster than you would think possible. With my steady accumulation and also through lending, this allowed me to double my accumulation this year. This becomes even more important as cryptocurrency prices continue to rise. On the other hand, if you are a trader or in it for the short term; then lending or pawning may not be the option for you. There are withdrawal costs when lending, and there may be delays in returning the cryptocurrency or diluting it. Or there may not even be a place available to borrow your coins with a lower cap. The bottom line is that if you're hoping to trade or coin flip, having access to your coins in an instant is paramount.

    You also need to decide what kind of buyer you will be. Will you set price targets and only buy when coin prices reach those targets. Maybe you'll dollar value average and buy every time you get paid. Maybe you'll only buy on days when prices are deep red. The list goes on and on. Personally, I like to dollar price average and also keep money aside for those deep red days. Like what the market is just experiencing. Dollar cost averaging is a great way to build and average the cost of investing. But the real gains are made by investing in those deep red days. It was so important to my portfolio. But it's easier said than done. Putting money into the market on days when people are crying doom and gloom. We declare that the bull run is over and we will have a 2-3 year bear market. these are not easy times to keep spending. But if you have done the research and really believe in the coins you are investing in. Then even in these difficult days, you must still have conviction.

    One last important thing to decide is how concentrated your portfolio will be. Will you have a highly concentrated portfolio or a diversified portfolio with many coins. With a more concentrated portfolio giving you higher reward potential. But this is only limited to the few coins that are part of your portfolio. If you have a diversified portfolio with many coins, there is a much higher chance that one of your coins will go up in value. But it won't go up as much as if it were a higher concentration approach. For people who don't want to put too much research into it, a more diversified approach might be the best option. For me personally, I prefer to have a more concentrated portfolio. I like to do in-depth research every day and this allows me to invest in coins that I have extremely high conviction in. More often than not, these coins have appreciated and done very well due to this higher level of concentration. Again, this all comes back to the level of risk you are willing to take.

    These are just a few things to think about as you build your cryptocurrency portfolio. Someday soon, I'll write an article that goes into more depth on the ideas above, and I'll also continue the list with more tips.  

    But what about you? What type of cryptocurrency investor are you?

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