It’s no surprise that cryptocurrency investors had a difficult 2022. Bitcoin and ethereum, two of the best performers, fell by about 65%. Nonetheless, opportunities always emerge from chaos, and 2023 could be the year that opportunity knocks.
With that in mind, let’s look at the four fundamental pillars of crypto investing that could position you for long-term success.
1. Invest for the long term instead of trading for the short term
Losing money when prices are falling is one thing, but losing money when the market is going nowhere is even more frustrating.
After a crypto bear market, the market would typically move sideways for months before resuming a positive run. Short-term traders find it extremely difficult to make money during this period, so many are tempted to over-trade or use leverage in order to achieve greater short-term gains. This strategy often results in a “death by a thousand cuts”, in which you lose small amounts of money over time and underperform the market.
So how can you play this?
Dollar-cost averaging refers to the strategy of gradually accumulating your chosen investment at set intervals over time (for example, monthly buys), which has been shown to outperform 99.99% of traders.
This strategy allows you to accumulate a cryptocurrency (regardless of price) and gradually increase your holding in anticipation of the beginning of a new bull market. If you choose a good diversified investment (Revix Top 10 Bundle), you may be rewarded when cryptocurrency prices finally begin their ascent.
2. Cleverly construct your crypto portfolio
A goal without a plan is nothing more than a wish. Bear markets are ideal for planning. It’s far better to take time planning your ideal crypto portfolio when prices are down than waiting for the market to turn and quickly piece together a ‘that’ll do” portfolio.
Since the crypto market is still young, crypto bull runs are typically shorter and sharper than those of traditional asset classes (stocks, bonds, commodities). When bull markets begin, they frequently catch investors off guard, resulting in Fomo (fear of missing out). Without a clear plan in place, you are less likely to succeed and may miss out on more lucrative opportunities.
So, how should your portfolio look?
It all comes down to your risk tolerance.
- Safe: For those who are more risk-averse, you may want to stick with bitcoin and ethereum, the two largest networks and market capitalisations, as well as the most tried and tested cryptocurrencies.
- Risky: If you’re willing to accept more volatility for potentially higher returns, you can consider adding riskier altcoins to your investment portfolio such as solana or cardano.
- Best: While these two options are viable, there is a better option: diversification.
Diversification simply means spreading out your investments. By implementing this portfolio strategy, you can enjoy the returns of cryptocurrencies without being at risk of one cryptocurrency substantially reducing your investable wealth.
For example, Revix provides its customers with access to multiple crypto bundles, such as the Revix Top 10 Bundle, which allows them to benefit from the overall growth of the industry, or if they prefer a specific sub-sector of the crypto space, a sector specific bundle through a simple one-click investment.
3. Upskill your crypto knowledge
Because the cryptocurrency market is still in its infancy, there is a greater opportunity to generate alpha (beating the market) than in traditional markets. Those who make a lot of money in the cryptocurrency market are the first to notice these trends.
Imagine investing in decentralised finance (DeFi) in the summer of 2020, right before the 100x DeFi Summer, or buying Polygon’s MATIC token for less than $0.01 (trading at $1.12 at the time of writing).
Revix Bundles keep investors informed and invested in the biggest and best cryptocurrencies based on market capitalisation and theme so you never miss a trend.
4. Zoom out and see the bigger picture
When in doubt, zoom out. As crypto moves toward mainstream adoption, it is likely to see many more ups and downs, but if we use bitcoin as a proxy for the crypto market, we can see a clear long-term picture of growth and return.
And it’s not just bitcoin; over the last few years we have seen how the world of DeFi and smart contracts is shaping a new era of financial services, one that allows for a costless, transparent and non-sovereign transfer of wealth between parties.
How can you gain access to these cryptocurrencies and their sectors?
South African fintech Revix offers the easiest way to invest in over 15 single cryptocurrencies (bitcoin, ethereum, uniswap, polygon and more). Its signature theme-based crypto bundles are fit for any investor who wishes to diversify their portfolio into different sub-sectors of the cryptocurrency space.
Visit Revix today and invest the smart way.
Revix brings simplicity, trust and great customer service when investing in cryptocurrencies. Its easy-to-use online platform allows anyone to securely own the world’s top cryptocurrencies in just a few clicks. Revix guides new clients through the sign-up process to their first deposit and first investment. Once set up, most customers manage their own portfolio but can access support from the Revix team at any time.
Remember, cryptocurrencies are high-risk investments. You should not invest more than you can afford to lose, and before investing please take into consideration your level of experience and investment objectives – and seek independent financial advice if necessary.
This article is intended for informational purposes only. The views expressed are opinions, not facts, and should not be construed as investment advice or recommendations. This article is not an offer, nor the solicitation of an offer, to buy or sell any cryptocurrency.
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