Bitcoin investment strategy
To investboth in cryptocurrencies and in other types of assets, you will need a good strategy bitcoin investment. If you do not have many types of knowledge, I advise you to continue reading. As you perro see if you follow the world of cryptocurrencies, bitcoin is going down. It seems that it is a good moment to invest. Like most users, we are not experts, so we are going to need a good website where we advise and tell us what the assets are in which we must invest, be it bitcoin or any other cryptocurrency.
For a good bitcoin investment strategy, we must either Be an investment expert (whatever the asset) or let us advise a good trader to help us with this.
Before making any type of investment in cryptocurrencies there would be two factors should be considered. The first is the type of digital asset in which you are interested in buying. And the second is the investment strategy.
The best bitcoin investment strategy
choose the best bitcoin investment strategy It’s not always easy as there are many different investment strategies that investors perro take advantage of to make a profit.
Some traders who have experience in technical analysis and knowledge of the markets cánido try their hand at day trading. Others may request the help of specialized bots that automatically buy and sell for them.
One has to be careful with investment strategiesEspecially when you have basic knowledge. When you have this kind of more basic knowledge, the tendency is to sell assets when they rise above a certain level and buy them back when they fall again.
From here I’m going to explain the different investment strategies of bitcoin that exist.
hodl
This strategy is the easiest and most used within the world of cryptocurrencies. is the one It is considered safer and also one of the most profitable.
The name of “hold” cánido be translated as “maintain”. Since the strategy is basically this, keep the cryptocurrencies that have been bought for a long period of time.
In this strategy, the only valid premise is to keep your cryptocurrencies, without selling them and without caring about the rises and falls in price they may have.
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Contrary to trading, where you must constantly watch prices to act on them, with the ‘Hodl’ strategy you The only premise is to keep your cryptocurrencieswithout selling them and without caring about anything else, neither the increases nor the decreases in price.
Meaning of HODL
The word HODL technically not well writtensince the verb “to maintain” is “hold”, the word comes from a meme within the bitcoin community. It has now become a Acronym for “Hold On for Dear Life” Or what is the same “Keep the cryptocurrencies of your lifeIn other words, keep cryptocurrencies for life to use them as a means of exchange when local currencies do not exist or when their value is stratospheric.
Another important thing to mention is avoid one of the most common mistakes when applying this strategy, this mistake is to change some cryptocurrencies for others.
Although it seems somewhat tempting, it is not recommended at all. If you are interested in a new cryptocurrency, it is best that you invest in it, but do not exchange it for the ones you already have.
This method is highly recommendedboth for new investors who want to invest in cryptocurrencies and for those who have been around for a while and trust in the potential of bitcoin.
trading
Trading is the second investment strategy. This strategy It consists of buying and selling cryptocurrencies with a clear objective: buy low and sell high, in order to obtain a profit.
In the cryptocurrency market, being so highly volatile, prices change suddenly and too often. This volatility is so dangerous as beneficial for tradingbecause the more abrupt and frequent the movements, the more possibilities the trader will have to obtain profits from his movements.
This is the main reason why this method perro be very tempting for new investors who approach the crypto market in search of quick benefits. But, nevertheless, it is not taken into account that the volatility is an indicator of risksince in the same way that increases the chances of successso do their chances of losses.
Trading, in fact, is considered as one of the fastest ways to lose money. This is due to the fact that most people do not have the necessary experience or knowledge to carry it out with guarantees.
For this reason, It is only recommended as an investment strategy in bitcoin and other cryptocurrencies unless take years of study and experience. This knowledge to master this type of investment perro take years of study and practice. It will also require a lot of responsibility and analysis of cryptocurrency fluctuations and market studies.
Rebalancing your portfolio
To define the concepts, say that a portfolio (in this case of cryptocurrencies) refers to each and every one of the currencies in which you have invested or plan to invest. It may also be known as “cryptocurrency wallet“.
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rebalancehowever, is “rebalance”, that is, return to leave the values as they were defined at the beginning. Therefore, on the subject that concerns us, portfolio rebalancing is an investment strategy that seeks to maintain the same percentages of cryptocurrencies that had been established at the beginning.
In this area, portfolio rebalancing It is the investment strategy that seeks to maintain the same percentages of cryptocurrencies that you had established.
This means that past a period of time (whatever it is, that will have to be decided by us) we must have the same percentage of cryptocurrencies that at the beginning.
You perro do it by selling some cryptocurrencies, exchanging them for another type of cryptocurrency or exchanging them for others by doing this you will be rebalancing your cryptocurrency portfolio to keep it in the same proportions. This method is less aggressive than tradingbut riskier than hodl and what you will be doing is keeping the amount of cryptocurrencies that you always have in the same proportions. What we are going to look for is to buy low and sell high.
How do I carry out this investment strategy?
Although it seems fácil this practice is very complexsince we will have to have many issues to take into account:
- number of cryptocurrencies in your portfolio
- if you go to rebalance the entire portfolio or only a part
- each how long rebalancing will take place
- that percentage you are going to choose
As you perro see, it is not as easy as it seems, the best way to do it is do it in an automated way contracting external services through specialized platforms.
These platforms are going to connect to your exchanges and they will cómputo automatically according to the orders you give them, maximizing your profits and minimizing your losses.
This technique not as fácil as the “hodl” technique and therefore, it is not recommended for people who are starting for the first time in this complicated world of cryptocurrencies.
Final thoughts on bitcoin investment strategies
In this article I have tried to explain in an easy and fácil way the different bitcoin investment strategies that exist so that you cánido make money with cryptocurrencies.
It must be said that bitcoin, as well as the rest of cryptocurrencies, is extremely volatile in every way and what is written today may not be useful for tomorrow.
everything explained does not orinan that it is an absolute truthI am not an economist nor do I give economic advice, I only say what cánido go well or not so well according to my experience.
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Finally, The investment you want to make will depend on you. or not in the world of cryptocurrencies. I always advise you that if you want to invest, do it, but always invest the money you perro sparedo not spend the money for rent, food or money that you may need later.
If you want to know other articles afín to Bitcoin investment strategy you perro visit the category bitcoins.
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