financialtreat – will explain about the Best Ways to Invest in Cryptocurrencies that you will get in the following article. let’s look at this article carefully!
If you want to invest in cryptocurrencies aka digital currencies, then you are in the right review we will explain the Best Ways to Invest in Cryptocurrencies. Because investing in cryptocurrencies is very much discussed and popularly discussed by investment experts.
In order for you to understand this way you need to listen and read a lot of everything you can about cryptocurrencies. There is a saying that concentration makes you rich, while being verified keeps you rich, how do you see the full explanation below.
Understanding How to Invest in Cryptocurrencies and Divest
Each cryptocurrency is created for a different purpose. over a decade there will be a surge in demand in the network market. In terms of how to invest in cryptocurrencies, every investor should have a diverse financial strategy.
In the end, you should not put all investments into one strategy. Is diverifying your assets in crypto really the best way to invest. In 1952, Harry Markowitz, an American economist and Nobel laureate gave famous words that most business schools still use today to encourage the benefits of diversification.
In fact, it became such a saying that even ordinary people still use it today to highlight the importance of not taking unnecessary risks. Peter Lynch is an American businessman and other well-known stock investor who swears by portfolio diversification. Indeed, he has never seen stocks that he does not like. When in charge of Magellan’s company funds, Mr. Lynch owned a portfolio of more than one thousand shares.
Know the Importance of Portfolio Divestment
If you are a person who is just learning how to invest in cryptocurrencies and risk management, you will definitely underline the importance of portfolio diversification without a second thought.
This will be the basis of each of your trading strategies. Meanwhile, if you look closely at some of the most prominent investors in their portfolios, what you will find is that they are highly concentrated. Great investors like Warren Buffett and George Soros have a concentrated portfolio. For Mr. Buffett, excessive diversification gave him a situation of “low risk, low profit.”
And that he seemed to be a waste of his time. An investor with a low risk appetite does not have any confidence to get his money back. John Maynard Keynes, a British economist who lived in the middle of the 20th century and whose influence was so strong that all modern schools of thought bear his name.
Keynes gave unwavering support to concentrate his investment. Warren Buffett also agrees, Broad diversification is only necessary if investors do not understand what they are doing. There is nothing wrong with diversification.
But you may have to wait a little longer to make your investment very well. Time is not on your side. Creating life-changing wealth will become more difficult. 90% of cryptocurrencies have died.
Considering How to Invest in Cryptocurrencies, Still Profitable Is It Not?
Before investing in cryptocurrencies. You have to understand The Lindy Effect. The term can be traced back to 1964 by Albert Goldman, an American writer who wrote about the world of music in New York City.
What he found was that a Broadway show that lasted 100 days had a life expectancy of another 100 days in the future. And for shows that last 200 days, they last another 200 days.
This effect applies only to non-perishable assets, assets that do not depreciate with age. This does not apply to food or living things such as apples or humans. Ideas, ideologies, technologies, and systems do show some form of the Lindy effect.
And cryptocurrencies are all of the above. Therefore, how you allocate your cryptocurrency portfolio to earn maximum profit in the long run should also depend on it on the Lindy effect. In the way of investing in cryptocurrencies you should also consider the bee hive scenario.
Consider Thee Bee Hive Scenario in Investing
Imagine a hive full of rich and sweet honey, and the bees swarm around it. The more honey it has, the greater the incentive for a hungry bear to attack it.
Over time, attacks are repelled. The longer this nest exists, the stronger the defense. But it also means there is more incentive for larger and stronger bears to investigate them.
Bitcoin-like networks that transact tens of billions of dollars a day are attacked every day. This is a huge hive filled with enormous value, and it has experienced 10 years of constant attacks without failing or even going offline for a moment.
Cryptocurrency Investment Tips
Are you among the beginners who want to try this type of investment? What is the right cryptocurrency investment business strategy to bring profit? Here we summarize various tips and ways to invest in crypto for beginners as this online investment guide that you can follow.
· Understand the Concept of Cryptocurrencies Exactly
Know the terms that exist in cryptocurrencies before investing in this field. Also know how to do business properly. Because, there will be a process of trading and investing in cryptocurrencies.
· Choose Legal Exchange Media
Choose an official and registered media exchange with Bappebti to ensure investment security. So far, there are 13 companies that have been listed on Bappebti as crypto asset traders.
· Variable Evaluation of Crypto Assets
Get to know the types of cryptocurrencies and how they work before you decide which cryptocurrency you want to buy. The easiest way to find out what can affect the value of cryptocurrencies is to evaluate cryptocurrency assets through the official website.
Read the lite paper or whitepaper for more information and also find out the founder and his community on social media so that you are more confident in the company.
· Perform Technical Analysis Through Candlestick Charts
In order to know the asset’s price action and get a profit, you need to do technical analysis. The reason is that cryptocurrencies do not have the authority of other institutions and are fully dependent on their users.
· Know the Amount of Service Fee
Terdapat skema biaya pembelian dan penarikan layanan pada trader ketika melakukan transaksi mata cryptocurrency. You need to pay attention to the amount of cost and spread which is the difference between the price of the highest buy order and the lowest selling price. This difference in spread determines the price volatility and liquidity in the market.
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· Diversify Coins
You need to diversify your coins to minimize the risk of possible losses. So, when you lose money on coin A, you can quickly make a stop loss and look for profits on the asset of coin B, and so on.
This step can also be a preventive measure so that you can avoid losses if the currency collapses even though the position of some currencies is currently in the “upper hand” and tempting to bring profit.
· Start with a Small Amount
Like other types of investments, it’s a good idea for you to start with a small amount that suits your abilities. Also try to use cold money or money that you don’t use for daily needs.
· Diligently Looking at the Stock Exchange Market
Cryptocurrencies have such a high level of volatility that the movement of their value can occur very quickly. For this reason, monitor the charts on the exchange market often so that you know the right time when to buy a coin at a falling price and sell it again when the price rises.
Additional Information on Disadvantages of Cryptocurrency Investment
Don’t be in a hurry in deciding to invest in crypto. Also pay attention to the shortcomings you have so that you are prepared for all investment risks. Here are some of the disadvantages of investing in cryptocurrencies.
- Not all countries give permission or legality to crypto trading
- Crypto confidentiality can be abused if transactions are used on the black market or black market
- Requires a device that supports and is relatively expensive, especially if a device with high specs is needed
- Fluctuating value is also a lack of crypto where the owners can suffer losses if the value drops
Thus the review of the Best Ways to Invest in Cryptocurrencies. The information above is important for you to know if you want to start investing in this crytocerrency so that your investment is successful and profitable.