When it comes to crypto, I have always heard the phrase "buy low and sell high." This is fine and all but how do you know when the market is actually low or high? If you buy when it is 10% down and then it continues to go down 20% more, you lose out on that other 20%. Same thing when you sell high.. What if you sell too early and the coin continues to rise 30% more?
I have also heard "buy high and sell higher." Obviously, this phrase comes from the "pump and dump" trend. I would say this is closer to gambling because it requires constant monitoring of social media accounts to see if any important person or group begins hyping a specific cryptocurrency. It becomes a race to buy that specific coin before it reaches it's high and then sell when you think it is at it's highest point before anyone else does.
Another common strategy is to only buy coins when the crypto market is low and hold long term. Holding long term comes with less stress and also saves you more money when it comes to taxes if the holding time is at least one year.
A strategy I learned from someone with a background in finance once mentioned that his plan was to sell 25% of his cryptocurrency every time he thought the crypto market hit new highs. The risk here was that if it continues to go higher, he only missed out on 25% of the coins he sold. The opportunity this brings is that if the market crashes again, then he can use the 25% that he cashed out on to buy the dip. The dip is a term used whenever the value of cryptocurrency is at a low. This is actually a great strategy in my opinion as long as you have patience because it has low risk.
With crypto, I have learned about something called decentralized finance. Instead of investing into a savings account at a bank and receive something like 1% APY, imagine investing into the crypto version of a bank. The only drawback is that there is no FDIC insurance. However, you can receive anywhere from 15%-18% APY. Just incase you don't know what APY is, the complete word is called Annual Percentage Yield.
An example: 15% APY on $10,000 would be $125 of interest a month.
So my plan would be to sell 50% of my cryptocurrency at what I think is a new market high. Then I would place those coins into a decentralized finance company and collect the high APY until the next crypto crash. Once the next crypto crash occurs, I would then use the funds I have in the decentralized finance and place it all back into the crypto exchange to buy the dip.
Time to mention one of the decentralized finance companies I have been eyeing...
Stablegains is a start up company that simplifies investing in decentralized finance companies. Instead of cycling through multiple companies when the APY changes and paying those gas fees, they would do it all on their backend for you. Gas fees are fees in crypto that you pay whenever you transfer cryptocurrency. Some times gas fees can be as high as $60 for moving $5 worth of crypto. Saving gas fees whenever you invest is great and so is not dealing with chasing the company with the highest APY since this will also make doing taxes a nightmare. Speaking of taxes, Stablegains also plans to issue 1099 forms to make doing taxes more simple.
So the way Stablegains saves on gas fees for the user is by utilizing cryptocurrency transfers with Coinbase. When you transfer coins to a Coinbase account from another Coinbase account, you can choose an option to save on gas fees. This is awesome for someone who would like to invest into decentralized finance projects weekly.
While Stablegains works with many different cryptocurrency coins on the backend, users only invest with the company by depositing USD Coins to their interface. USD Coins are stable coins and they never go up or down like other cryptocurrency coins do depending on the market. USDC is short for USD Coin and also stands for United States Dollar Coin.
Stablegains is in their beta stage and they are planning to launch in a few months. Feel free to use my referral link to get in their waitlist and reap any referral bonuses.
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