Passive Trading Strategies for Cryptocurrency Investors

Passive Investment strategies are cost effective strategies where investors enter the market for the “long-haul”. The idea is to minimise velocity of buying and selling in the investment portfolio and to maximise returns by saving cost.

In principle, investors do not bother to anticipate market’s movement, instead they resist reacting to volatility of price movements. Passive Investment strategies are practised by investors investing in stocks, commodities, forex options and other financial assets. So, the particular trading strategy can as well be applied when investing in cryptocurrency.

Below are some Passive Trading Strategies that cryptocurrency investors can start adopting from today.

Buy and Hold strategy

Buy and hold strategy is a passive investment strategy where investors make an investment in cryptocurrency only to hold it for a long time. The idea behind this strategy is to enter a market regardless of the timings. For such investors, fundamental analysis of a particular cryptocurrency is more important than the technical analysis of the bear and bull market. Investors believe, rightfully so that if you stay in the market for long enough, entry price and timing won’t matter much. Buying and Holding Strategy is a popular strategy adopted by investors of Bitcoin in the Cryptocurrency market.

Index Investing

Index investing is another hands-off approach that investors of the blockchain industry or cryptocurrency market may adopt. It is a strategy of investing in a sector over placing an investment bet on a particular coin or token. The basic idea is to diversify your portfolio by investing in a basket of utility and a privacy token, as long as the basket includes financial assets from the same group. The minimal expense driven and uncomplicated process of investing follows similar fundamentals as that of S&P 500 stocks.

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