Idea of cryptocurrencies.
The idea of cryptocurrencies has long penetrated the masses. Some people have already made a fortune on cryptocurrencies. Successful crypto-investors adhere to certain cryptocurrency investment strategy, strategies that help them to receive substantial dividends. But what should beginners do? In this article we will try to figure it out.
For the competent creation of a cryptocurrency portfolio, it is important to understand the coins well. Some novice traders mistakenly acquire Bitcoin exclusively, thinking that this is the most important digital asset. Of course, there is some truth to this, but in order to make a profit you need to remember altcoins.
Speaking about cryptocurrency investments, you need to understand that we are talking about long-term investments. For a short distance, it is most likely that it will not work to get the expected profit. The main advantage of long-term investments is the growth trend of any assets. As an example, we can cite economic statistics: the profit on the S&P 500 index was 60%, on the FTSE 100 index – 25%.
This tells us that even the most congested markets in the long term (usually a period of 5 years) are growing, so long-term investment in cryptocurrencies looks like a reliable option.
What are the benefits of a long-term cryptocurrency portfolio?
- Low commission fees. With active trading, the commission can cost the investor a tidy amount. In some cases, commissions can offset successful trading. With a long-term strategy, the investor has to wait for the growth in the price of digital currencies. He doesn’t need to trade daily, so exchange fees will no longer be a serious problem.
- Minimum risk. No losing days. You wait only for good days.
What factors should be given particular attention for cryptocurrency investment strategy?
This criterion helps to understand whether the coin of your choice is often used or not. If we consider, for example, Ethereum, then transactions per day amount to 500,000 ETH. This indicates the relevance and prospects of the coin.
A careful study of the blockchain of a coin can shed light on its prospects. If the blockchain is not suitable for the implementation of the stated goals, then the prospects of the coin are small.
News relating to exchanges and coins.
One problem that arises can bring down the course of a coin, and in some cases even all coins. Be prepared for this.
How to create a cryptocurrency portfolio in 2019?
We will consider two schemes. Depending on your available funds, we’ll show you which one is suitable in a particular case. In addition, you can read an article about the basics of creating a cryptocurrency portfolio.
First, make a reservation. The schemes that you see below are conditional. There are countries in which a digital asset is prohibited. In this case, you should replace it with an equivalent asset, which you don’t get under the ban!
Cryptocurrency investment strategy. Scheme No1.
30% – coins used as a means of payment (Bitcoin, Litecoin);
30% – coins used for application development (Ethereum / Ethereum Classic);
20% – coins with a high degree of confidentiality (Monero, Dash);
10% – coins that can be paid in applications that help solve certain problems (Salt, Metal);
5% – exchange coins (Binance);
5% – coins that are used both as a currency and for project development (Ripple, Stellar).
The fourth point of this scheme deserves special mention. Previously, such coins could be purchased during the ICO. Yes, many of them failed, but with a successful set of circumstances, it was possible to increase the amount of investment by tens of times. In 2019, it became much more difficult for many projects to enter the ICO and a new type of token sale appeared through the exchange, the so-called IEO.. Its main advantage over its predecessor is fewer scam projects, which increases the likelihood of successful investments and cryptocurrency startups become more attractive to the masses.
Scheme No.2 (simplified version).
Bitcoin – 50%;
Ethereum – 15%;
Monero – 10%;
Litecoin – 10%;
Zcash – 10%;
5% – Bitcoin Cash.
If you have at your disposal only $ 150, crypto investors recommend fully or partially the scheme No 2. In the presence of $ 1,500, crypto investors partially apply scheme No. 1. If you have from $ 5,000, crypto investors think that the scheme No 1 is perfect.
Crypto investors also like to give some universal tips:
1) 60% – 70% of the coins in your portfolio should be from the TOP-10 rating;
2) For the amount of $15,000 and above, it is best to buy coins that are in the TOP-100 rating.
This article is not a recommendation for investment or investment in cryptocurrency, as well as perceived as investment advice. Be careful, because investing in cryptocurrencies is very risky and you need to consult with your financial advisor. Past earnings do not guarantee future earnings.
Holderlab.io is a service for automated crypto portfolio management with automatic rebalancing of assets (threshold or periodic), searching for efficient frontier and analysing assets using a correlation matrix and other crypto investments tools.