12 Crypto Investment Strategies That You Should Know About

Sep 21, 2022

Whether you’ve just started your crypto investment journey or have been on it for quite some time now, it’s always good to familiarize yourself with the various investment strategies available for crypto investors to choose from.

In this article, we handpicked twelve of the most popular crypto investment strategies that you may consider to apply at any point of your crypto journey.

So, if you’re ready, let’s begin.

KEY TAKEAWAYS

  • Other than monetary gain, people invest in crypto because it is considered a reliable store of value and because of the many potentials of blockchain tech
  • Crypto investment strategies can be classified into two: short-term strategies and long term strategies
  • Long-term investment strategies offer more advantages than short-term strategies

WHY INVEST IN CRYPTO?

With many becoming instant millionaires from investing in bitcoin and other cryptocurrencies over the years, it is no surprise that more and more investors are turning to crypto as a viable investment option. That said, monetary gain is not the only reason why many consider investing in crypto. Other reasons for investing in crypto include:

A PROMISING TECHNOLOGY

Blockchain, the technology underlying bitcoin and other cryptocurrencies, has the potential to disrupt a number of industries such as shipping, supply chains, and banking. This potential, alone, makes for an attractive investment - especially to those who believe in the future of digital assets.

A RELIABLE STORE OF VALUE

Many people invest in cryptocurrencies because they serve as a reliable and secure store of value. Unlike fiat currency, most cryptocurrencies have a limited supply. This means that it would be difficult to devalue cryptocurrencies through inflation. You can also send them to anyone, anywhere in the world without having to ask permission from a third party.

Bitcoin, for example, has a limited supply of 21 million and has attracted many investors due to its deflationary and censorship-resistant properties.

LOW BARRIER TO ENTRY

Crypto is relatively easy to access. You only need a laptop (or a mobile phone) and an internet connection to start investing in crypto.

CRYPTO INVESTMENT STRATEGIES & CHOOSING THE BEST ONE FOR YOU

Given that there are many crypto investment strategies available for you to choose from, the process of identifying which one suits you can be daunting. However, this process can be simplified by asking one question: are you a short-term investor or long-term investor?

If you’re a short-term investor, then crypto trading probably suits you.

What is crypto trading? Simply put, crypto trading is the act of buying and selling crypto for short-term profit. The most common method or types of trading are:

  1. Day Trading - also known as intraday trading, involves entering and exiting a market position within the same day. The goal? To generate profits from market movements - which crypto traders consider viable given the volatility of the crypto market.
  2. Scalping - the idea behind scalping is to make small but frequent profits, and then combine them later on with the hope of making a substantial profit by the end of trading day.
  3. Arbitrage Trading - is a trading method in which a trader purchases cryptocurrency in one market and sells it in another. The goal is to make a profit based on the difference between the buy and sell prices.
  4. High-Frequency Trading - also known as HFT is a strategy that involves the creation of algorithms and trading bots that aid in the speedy entry and exit of a crypto asset.
  5. Crypto Futures Trading - this method involves entering into a contract agreement between two parties to buy and sell a particular amount of an underlying cryptocurrency like BTC at a predetermined future price on a predetermined date and time.
  6. Contract for Difference Trading - also known as CFD trading, is a method that allows investors to trade and invest in a crypto asset through an agreement with a broker, instead of opening a position directly on a certain market.

On the other hand, if you’re a long-term investor, you may consider the following strategies:

  1. HODL - which is an intentional misspelling of the word HOLD, simply involves buying crypto and then keeping them for a long period of time. HODLers are, generally, not concerned or affected by short-term price movements and market conditions. They are more focused on the long-term value appreciation of their crypto assets.
  2. Dollar Cost Averaging - also known as DCA, is a strategy that involves allocating a particular amount of capital to an investment in a consistent and periodic manner (e.g. consistently invest US$100 in crypto every month).
  3. Lending - lending occurs when a crypto asset is given by a lender to a borrower with the expectation that it will be returned at a specified time and with interest. For more information on lending, you may click here.
  4. Borrowing - is a strategy preferred by crypto investors who do not wish to sell their crypto assets but want to receive funds to support their lifestyle or generate cash flow by using them as collateral. For more information on borrowing, you may click here.
  5. Staking - is the act of committing your cryptocurrencies to support a blockchain network by contributing to its security and efficiency. For more information on staking, you may click here.
  6. Liquidity Mining - is a blockchain-based investment mechanism that allows crypto investors to participate as Liquidity Miners and generate passive income or cash flow as they receive Liquidity Mining rewards and fees. For more information on liquidity mining, you may click here.
Cake DeFi – the best place to start your crypto investment journey

FINAL THOUGHTS

Regardless of which crypto investment you choose to apply, a good rule of thumb is to always do your research and to understand the potential risks involved before investing in cryptocurrency.

Also, it is always beneficial to focus on long-term results and avoid having a short-term mindset. As iconic investor Warren Buffet once said, “Do not take yearly results too seriously. Instead, focus on four or five-year averages.”

Short-term results are rarely a good measure of an investment’s success. On the other hand, long-term results are a good source of insights and data for making comparisons and necessary adjustments to your overall strategy.

If you agree and would like to start investing in crypto for the long-term, you may click here to register a Cake DeFi account and kickstart your crypto journey.

* certain jurisdictions may be ineligible for bonuses


You will get US$30 worth of DFI when you register successfully and make a deposit of US$50 or more, and allocate the amount for at least 28 days into either our Lending, Staking Freezer or Liquidity Mining Freezer service.

You may start using our latest service, EARN, to further strengthen and diversify your crypto portfolio.

So, what are you waiting for? Sign-up now and start generating returns for the long term.

Cake DeFi

Control your financial destiny. Cake DeFi is the most transparent, safe and easy way to invest in DeFi and Web3.

Great! You've successfully subscribed.
Great! Next, complete checkout for full access.
Welcome back! You've successfully signed in.
Success! Your account is fully activated, you now have access to all content.