A new year has just begun and like every year, you may have been thinking about setting goals for yourself. These goals are commonly known as New Year Resolutions. For instance, you may commit to losing excessive weight or start living a more active and healthy lifestyle.
But have you ever thought of setting financial goals for the coming year? If not, 2022 may be the time to think about it. By simply making the right investments, you can really strengthen your financial health.
Crypto investments were among the most popular and best performing asset classes in 2021. In the light of the recent financial conditions, a crypto investment may thus be one of the best options to consider investing into in 2022. And if you don’t have any idea about Bitcoin or a crypto investment yet, we have got you covered.
In the following, we have curated and listed the top 10 crypto investment tips to reach your financial goals for the year 2022 faster than you might think
Crypto Investment Tips
Before going any further, make sure to develop a savings habit. That’s crucial, because to make any kind of investment, you need some available capital. For this purpose, you should try to curtail your expenses and stop the unbridled draining of your money. Hence, you should think about creating a budget.
As a result, you can save a handsome amount of money every month and increase your net worth gradually. To achieve this goal, always try to keep the following aspects in mind.
Gradually increase your net worth by:
· Keeping track of your spending.
· Determining fixed monthly expenses and deduct them from net income.
· Saving at least 10% to 15% of pre-tax income.
Once you have a decent amount of savings to invest, it’s time to go ahead and think about a crypto investment. To assist you with this, here are the most effective cryptocurrency tips to follow.
1. Build a Strategy
Just like any other investment portfolio, investing in crypto requires building a strategy. Make a list of investment options that are reliable and trusted. This will help you avoid some common mistakes. Besides, you will also need to set a limit for the investment. As a result, you can lower the risk of any adverse scenarios.
Especially newbies should go for a strong cryptocurrency like Bitcoin or Ethereum. Both currencies have consistent demand and excellent track records. In addition, you can do your own homework by looking into the lists of other popular currencies like DeFiChain – an emerging altcoin built around the notion of decentralized finance.
2. Diversify Crypto Portfolios
Investing in a single crypto asset isn’t a prudent idea. One of the rookie mistakes you could make would be to put all your money in just one or two cryptocurrencies. As it is suggested in the case of shares and stocks, make sure to invest in different types of cryptocurrencies and never put all your eggs in one basket. It lowers the risk of increased exposure to volatility.
So, don’t forget to do your research before investing your money in a particular cryptocurrency. By investing your funds in different coins, it is possible to gain maximum benefits with less investment in hand. Thus, always consider a good mix of investing into established projects as well as new projects with a fabulous team and technology like DeFiChain.
3. Be Patient
Since the prices of cryptocurrencies experience frequent fluctuations, novice investors start to make decisions in haste. As a result, they start selling their cryptos at a much lower price. That’s why, patience is the key to reaping the benefits of crypto investment.
It’s also a fact that cryptocurrencies aren’t going anywhere. Crypto is the currency of the future, and they are here to stay. If you are looking for the best rewards, don’t hesitate to make long-term crypto investments.
4. Set Incremental Buy and Sell Orders
This is something known as laddering the buys and sells. According to this strategy, you should avoid buying or selling everything in a single transaction. The most appropriate way is to set incremental buy and sell orders. This strategy allows you to buy a crypto asset when it is available at a lower price and sell it when it has gained sufficient value.
5. Always Value Coins in BTC
No doubt, Bitcoin is considered the primary player of the crypto world. Most of the newcomers value their alternative coins in terms of Dollars. This isn’t a great way of comparing crypto assets to each other. Doing so won’t be helpful when it comes to understanding and reacting to the trends that others are analyzing. Hence, make sure to value your altcoins in BTC.
6. Keep an Eye on the Market Cycles
Cryptocurrency relies on patterns and usually goes in cycles. Hence, crypto investors must take the market cycles into account. In an ideal situation, you should sell the cryptocurrency when the market is bullish. On the contrary, it would be a wise decision to slowly accumulate a position when it’s bearish.
7. Learn Technical Analysis
For crypto investment, the term ‘Technical Analysis’ involves an analysis of the volume data and price of a digital currency. This helps to predict the most relevant trends in the future. Although crypto assets are volatile, certain indicators can help you learn the pattern.
8. Don’t Over Trade
Holding crypto coins has proven to be the superior strategy for most investors, especially when it comes to growing one's net worth. Let’s suppose you have diversified your crypto portfolio and hold 5 crypto coins. Then it’s always best to just hold them, and probably only use trading platforms for rebalancing purposes in case you want to change your portfolio in the future. Platforms like Cake DeFi are here to help you with the first steps of your crypto investments. For a limited time only, you can get free $30 for signing up and depositing at least $50 into your account.
9. Pay Attention to the Order Book
An order book is available in almost every crypto exchange. It can help you understand which crypto assets are selling at a cheaper price or vice versa. If you come across a huge number of orders at a particular price, you can use it as a base price to sell your crypto assets. This rule also applies when you are in the mood to buy the cryptos. This only applies to centralized exchanges, on decentralized exchanges like DeFiChain’s DEX you do not have an order book and thus have to make sure that the Liquidity Pools are big enough to limit slippage.
10. Manage Risk
There are self proclaimed crypto experts a dime a dozen that might not have your best interests at heart. So don’t get stung making the same mistakes as others. Always set limits on how much you invest in a particular digital currency and don’t be tempted to trade with more money than you can afford to lose –– this especially holds true when you try to chase a trade.
The crypto space is constantly growing and adapting to new trends, providing myriad opportunities to maximize your crypto investment. The strategies we have outlined above are just a handful of ways to successfully stretch your funds and give you the biggest potential for a high return on your investment. On the other hand, it’s also important to remember the golden rule of investing: Always invest and trade amounts you can afford to lose.
If you want to get a real advantage, just hold your coins and still make returns on top of them – even more so than you could with trading! Sign up for Cake DeFi now to invest in crypto and claim your $30 signup bonus!