Investing isn’t about luck. All those sports cars, big mansions, and piles of money you’re wishing for won’t come to you because you had a lucky call. You’re hitting the jackpot when you’re having the RIGHT call. And being right is the result of your knowledge acquired over time. If you want to become a cryptocurrency investor, you have work to do!
Here’s your step by step guide to making the leap from a cryptocurrency owner to a real investor:
1. What is your strategy?
Before even pulling your money out, you should have a clear strategy defined. In this way, instead of acting on emotions, you’ll have a successful plan backing your decisions. The strategy is your main plan which really works for each type of investment (cryptocurrency and crypto tokens are not an exception).
You should diversify your risks:
- 60% – stable low volatile actives
- 30% – middle risks volatile actives
- 10% – high risks active (cryptocurrency is here)
But you could find such a groups inside this 10% of high risks investments. In the world of cryptocurrency we have:
- Bitcoin or proved coins like Ethereum – stable low risks actives
- Altcoins – high risks actives
- ICO Tokens – middle or high risks actives (depends on the company you’re investing in)
You can also “save” your investments in something call bitUSD or bitEUR actives on Bitshares blockchain. It’s special type of asset that is protected from high volatility and connected with fiat currencies, as the dollar or euro.
Long term investment
Some projects need time to reach their real value. If you’re doing your research right and the variables show you a clear successful path you can support it, as an early investor for long term profits.
Short term investment
All projects are in continuous development. If you’re investing at the right time, based on experience and present signs you can cash in the profits in terms of months, weeks, or even days.
Risk management between the two
For a more balanced investment, you can decide to get your profits on the way when certain milestones are reached. While you’re still invested for the long term, benefiting the early entry discount, you’re making sure to save some of your profits early on, reducing the risk of your overall strategy.
TOP-3 source to monitor actives:
- Coinmarketcap.com (For currency and token capitalization)
- Icotracker.net (for upcoming ICO to monitor tokens)
- cyber.fund (You could just follow the portfolio of fund like cyber.fund and see in this spreadsheet what they invest in and how much)
2. What are you going to invest in?
Based on the strategy you’re following, there are different types of investment you can make. Between them, there are differences of entry levels, risks, and profits.
Stable currencies with big market cap (Bitcoin, ETH, Neo)
If you want an easier investment, with the lowest risk, you can choose one of the stable currencies with a big market cap. These are proven technologies with history already written. While the profits are smaller, the always increased transactional volume assures you an easy exit anytime.
Riskier small projects in development (Sia, IOTA, Stratis)
The smaller projects with big communities are technologies still in development with big potential gains. Deciding to invest in one of these is riskier, you don’t have any guarantee that the idea is even doable. In this case, an in-depth research is recommended, even a long term follow their progress before investing.
ICO (Initial Coin Offerings) are early stage projects with a strong team working on a detailed development plan. They’re providing a public roadmap. Once they’re asking for this early investment they’re usually offering a big discount on participation with the guarantee of a working project delivered on the decided dates. This type of investment has the biggest risk of all, but the potential profits are considerable.
3. How can you find the best projects?
Joining trackers, reading news, and following upcoming ICOs is the work an investor should constantly put in. Doesn’t look like too much work, but it requires focused attention to analyzing each project to find the best fit for your investment strategy.
Provide in real time the latest noticeable changes in the crypto-space. The market is highly influenced by these events. Having a strong list of trustworthy sources is a must for secure investments.
Finding the best opportunities it’s not just a matter of luck when you’re using the right tools. ICO trackers are websites that are listing all the information required for a detailed research on the upcoming ICOs.
While the crypto-space is still represented by a minority, the community is always increasing. Making sure you’re well informed and you didn’t miss any important details, you should join active channels where you can share your findings with interested people.
4. How can you invest?
The preparation phase can’t guarantee you the profits you desire until you’re learning how to properly use the available tools for making the actual investment. They may vary, but their importance is almost equal. Knowing your options will open more opportunities for you.
Buying on a digital currency platform (Coinbase, Cex.io)
The easiest way to invest in some of the available cryptocurrencies is by using one of the platforms available in your country. After a short verification process, you can buy the most common cryptocurrencies directly with your fiat currency. These type of services impose the biggest fees on transactions.
Buying from an exchange (Bittrex, GDAX, Kraken, Bitshares)
Using an exchange is the most common way to acquire cryptocurrencies. You’re having multiple options, you can use as many as you want, and you’ll have access to a wide range of digital currencies depending on your choice. The validation process makes take longer than the platforms above, but once you’re having an active account you can trade as much as you want, paying smaller imposed fees.
Participating in the ICO
An ICO is an event fixed in time which needs a certain preparation from you in order to be sure you’re not missing the opportunity. Each project gets to decide which cryptocurrencies they’re accepting, what type of wallets are compatible with their process, and how many investors they’re receiving before they’re closing the participation window. You can read more about How to participate in an ICO here, but you should always read the instruction provided by each project carefully.
Start your own ICO
You can make your entry in the market even with your own cryptocurrency. Services like Bitshares offers anyone the opportunity to create they own tokens, list them on an exchange, and gather money from your own investors. These are easy to use platforms which don’t require blockchain technology knowledge. This type of investment is as easy to set up as the other services above.
5. When to invest?
Once you gathered all the information and you’re considering yourself “in”, you should consider making your move. When and what, aren’t simple questions and you can’t find an answer right away. To sure you’ll be there when your opportunity comes you need to:
1. Have a clear strategy in mind
Spend as much time as you need until you’re absolutely sure this is what you want to do.
2. Be confident enough in the project’s technology
Always make your own in-depth research on each project you’re considering investing into.
3. Have a backup in case your investment isn’t going well
Being an investor involves a lot of risks. You won’t be able to control them all and you’ll never have 100% guarantee you’ll be getting your money back. This is why you should have an emergency plan in case things go south.
Becoming a cryptocurrency investor can be a successful decision if you’re willing to follow these steps carefully, work your way in, and always know your options. Good luck in your new journey!