I’ll start by saying that I’m not a financial advisor, and this is not financial advice. I would simply like to offer insight that I believe could be helpful to beginner investors in cryptocurrency. I can only speak on behalf of my own personal experiences and the things that I’ve learned in the past two years following the cryptocurrency markets and investing.
Cryptocurrency investors break down into two separate categories, those who believe in blockchain technologies and or the principals of a decentralized ecosystem, and those who are only invested in the space to take advantage of once in a lifetime monetary gains.
Of these categories, there are two different types of investors, those who wish to take long positions, and those who favor short positions. Because of extreme volatility, short positions have proven to be very profitable with a little discipline and focus. In addition, long positions have proven to be quite profitable because of the continued growth on nearly all crypto assets in the last year.
If you are new to cryptocurrency and are having trouble deciding exactly how and what you should invest in, you should first decide which one of the two categories that best describes you. In my experience, most people who fall into the category of believers in block chain technologies, tend to favor long term holds. Which of course means that most crypto investors primarily interested in short term monetary gains, will favor a shorter position and collect their profit from the volatility of the crypto markets.
For those of you believers in block chain and decentralization, when choosing which digital assets to invest in, my suggestion would be to pay close attention to the technology behind the coin. Be diligent and do your research. Determine what problem their tech intends to solve, and how much competition there is in the space. Research the people who are behind the company, such as officers, advisors, etc. Then based on the information you have gathered in your research, decide if you believe that this will be a company that will be around for a long time. If your research indicates the company will most likely continue to advance and develop their product, this could likely be the investment for you.
For those of you who are looking for short term gains in a day trading capacity, so to speak, you will need to pay close attention to news reporting and social media. The biggest movements in value of crypto currency are often driven by news and rumor. Positive news related to the tech behind a given digital asset will likely result in a quick gain in value, but is almost always followed by what is referred to as a price correction. The soaring high price is driven by the fear of missing out on huge gains, hype, and speculation. Of course, there is no secret to when to get in and when to get out, it’s about setting guide lines for yourself, and know what your risk tolerance is. Knowing how much you can afford and are willing to lose is also very important. But as is true in almost all parts of life, the greater the risk, the greater the reward potential.
@OriginalWorks
