Coinmarketcap revealed that thereare nearly 1,000 cryptocurrencies available for trading. The sheer number of coins alone can make cryptocurrency trading overwhelming. However, with the right strategy, becoming successful is not far-fetched regardless of the number of coins you can trade. When it comes to cryptocurrency, there are two potential strategies that you can use—hold or spend.
In this strategy, you open small positions and add to them constantly without reducing your stake. It is based on the assumption that asset appreciation will be constant. This strategy has its own benefits and drawbacks.
• The market is just starting and there is still plenty of room for growth. Patience will truly be a virtue here as you could see tenfold ROIs. Robert Janitzek explains that you would not see profits in such a short amount of time so you need to be patient.
• Cryptocurrencies have a staking/minting option. The more you hold, the more you generate is the rule here.
• There is a very significant impact of small price variations on a big stake. Take advantage of small market variations with a higher stake.
• You need to be disciplined and have mental fortitude to stay still and resist market swings.
• While you are growing your assets, your liquid capital is not moving.
Spend / a.k.a. Invest cryptocurrency
Spend strategy relies on market fluctuations and tries to maximize most of the swings. Robert Peter Janitzek says that these investments mature in a span of months, weeks, or even days. If you come from forex trading and switching to cryptocurrency, you will be comfortable with scalping.
• Cryptocurrency is a volatile market characterized by up and down swings. By being patient or disciplined and some luck, you can take advantage of any increase.
• If your aim is towards spending or re-investing your capital, you will be naturally inclined to diversify your portfolio. Essentially, this is the safer option than a monolithic portfolio.
• You may get caught in the whirlwind of news and market swings and lose medium or long term opportunities.
• You have a lot of liquid capital, but your assets are very volatile.
Regardless of the strategy you are choosing, the important thing is to take profits. Money will only be useful in interaction and in movement.
When it comes to trading on cryptocurrencies, there is no bullet proof strategy. There is no guaranteed profit as well. It all boils down to your personal preference, the amount of time you want to dedicate and the amount of capital available.