On balance, the cryptocurrency market has empirically proven itself to be a profitable investment space, with important similarities and differences to other investment avenues. This much is clearly evident looking at Bitcoin or Ether price charts over the past few years. As such, the strategies employed to balance risk and reward when investing in tokens have some significant points of overlap with those used in traditional finance.
Crypto Investment Strategies
Given the tendency of most cryptocurrencies to undergo significant price cycles over the course of days, most strategies must take the possibility of significant price cycles into account, along with the various reasons that a person might have in investing in a given token.
Buy and Hold
Buying and holding a token is possibly the simplest investment strategy to deploy while simultaneously requiring the largest amount of research, patience and risk tolerance. As the name implies, this strategy involves buying a token early on in its life and cashing out for profits somewhere down the line once the token has matured. Success depends on the investor being in early and right about the utility of a token, but the potential profits are high.
You should set a sell point for investments to counteract hubris and behavioral greed. Buying and holding crypto works in a manner similar to the traditional stock market. Staking and other DeFi yield generation protocols offer a way to generate yields…
