Cryptocurrency Business Strategies for Beginners
Investment experts have took the very same view that cryptocurrency investments are the most highly profitable, although the most risky ones. Such a tool can provide very high profit (100% and more), while real estate investments generate just a 10% average return, bank deposits — 7%, the stock market — 20%, investments in real business — about 10–50%. At the same time, for all-time existence of Bitcoin, the total return of the coin generated to 132.5 million percent! Let’s take a look at the three main cryptocurrency strategies for beginners.
Average points of entry
Yes, it is not always possible to buy cryptocurrency at the lowest price, but you can always average the entry point! It is quite simple to do that: you must divide the amount of your future crypto investments into several parts and buy cryptocurrency gradually. You can determine the procurement interval by yourself. Bearing in mind that the rate is constantly changing, you will get coins at the average rate if you’d buy it in several phases.
That’s how it works: let’s just say you have 1000 USD and you want to buy Bitcoins. Let’s split the money into 5 parts:
First purchase: 1 BTC = 7000 USD, we buy with 200 USD;
Second purchase: 1 BTC = 8000 USD, we buy with 200 USD;
Third purchase: 1 BTC = 6500 USD, we buy with 200 USD;
Fourth purchase: 1 BTC = 8500 USD, we buy with 200 USD;
Fifth purchase: 1 BTC = 6000 USD, we buy with 200 USD.
It turns out that the average Bitcoin rate of the procurement is 7,200 USD.
Another recommendation: if you have any free funds that you want to invest in cryptocurrency, keep some of them in fiat in case of strong depreciation — so you will have the opportunity to buy coins as profitably as possible!
Portfolio diversification
The classic strategy, the gist of which is to diversify risks and to divide the portfolio into several assets. Since we are talking about cryptocurrency, it involves the purchase of not only BTC, but also altcoins. At the same time, it is better to invest about 50% of all funds in Bitcoin, since it is the most famous and reliable cryptocurrency. The remaining funds can be distributed between alternative coins from the TOP-10.
Let us take a simple example: let’s say we have $1000, but we invest only 50% of the amount in BTC, and divide the remaining $500 between ETH, XRP, LTC and DASH. If we think that by 2022 the exchange rates will return to their historical maximum (the rate of early 2018), we would receive hundreds of percentage profit!
At the same time, the profit from of altcoins will be higher than from Bitcoin, but we do not recommend to invest in such coins only. It must be the most dangerous option, since a lot of investors have lost money on it.
Increase of crypto savings
This strategy is the most advantageous, because it allows not only to receive the income from cryptocurrency, but also to increase its amount. For example, such an effect can be obtained by investing in mining. Receiving income in cryptocurrency, the holder of mining capacities constantly increases the number of BTC on his account, and also receives additional profit with the growth of the coin rate.
Of course, you can also use investment platforms or trading to earn BTC, but you need to have special knowledge to predict exchange rate fluctuations. But mining does not require either your personal attendance or specialized knowledge. For example, you can not only receive Bitcoins on your wallet by purchasing equipment in ECOS and co-locating it on a legal hosting in mountains of Armenia, but you can also get income from the growth of the rate, constantly replenishing your cryptocurrency reserves!
