You probably have heard by now. That the collapse of Silicon Valley Bank, with more than $200 billion in assets, earlier this month has roiled the banking system. This consequently caused chain reaction events, with Signature Bank, more than $100 billion in assets, unravelling and the investment bank giant Credit Suisse getting snatched up by another banking giant UBS.
Cryptо is the way out
These unnerving debacles have left investors worried about the stability of the banking system. However, there is one asset that stands to benefit from the undoing of banking entities – cryptocurrency.
Digital assets have rallied in the past few weeks, as these events embody a testament to the need for a decentralized banking system. The implosions at the banks, as a result, might have triggered another bull run for crypto. However, you still have to invest smartly to avoid any unnecessary risk, and thus, this article will discuss seven strategies than can help you become a more intelligent investor.
Do Your Research
Before investing in any cryptocurrency, do your research. You should understand the characteristics, features, and use cases behind the token, as well as the team behind each project. This will help you determine whether the cryptocurrency has the potential to grow in value over time, or is just another failed project among a long line of botched efforts.
Diversify Your Portfolio
One of the most critical aspects of investing in cryptocurrencies, or in general, is diversification. Allocating money to a single cryptocurrency exposes you to a significant amount of risk, as the price of this asset class is notoriously volatile. Diversifying your portfolio by investing in multiple tokens helps you spread the overall risk and reduce the chance of losing all your money in one single coin.
Set Realistic Targets
Investing in cryptocurrencies can be a highly emotional experience. During a bull market, prices rise rapidly, and it can be tempting to invest more money than you can afford to lose. But a token’s value can tumble just as quickly as it collapses. Therefore, you should set realistic targets and have clear investment strategies and stick to them, even if the price continues to rise.
Follow Market Trends
Following market trends can help you make informed investment decisions. By keeping an eye on the cryptocurrency market, you can identify patterns and trends that may indicate a bullish or bearish market. For example, Bitcoin’s prices have been on an upward trajectory for the past few weeks. You need to determine if the move is a sustainable trend, or if is it just a blip. With the current turmoil in the banking system, this might represent a tailwind for the crypto market, but you have to decide that for yourself.
Use Dollar-Cost Averaging
Dollar-cost averaging is a strategy that entails investing a fixed amount of money in a cryptocurrency at regular intervals, regardless of its price. The practice potentially ensures that you won’t buy cryptocurrencies at their peak prices, while at the same time letting you take advantage of price dips. That is, the merit of dollar-cost averaging is allowing investors to ride out all the waves in the volatile crypto market but still reap the long-term capital gain.
Use Stop-Loss Orders
Stop-loss orders are a common risk management practice that can help you to protect your investments during a bull market. A stop-loss order is an order placed with your exchange or broker to sell a cryptocurrency when it reaches a certain price. This creates a fail-safe to limit your losses in the event of a sudden price drop, which can increasingly become more probable as prices shoot up quickly.
Consider staking
Staking is a strategy that allows you to earn passive income from your cryptocurrency investments. Staking involves holding a certain amount of cryptocurrency in a wallet and using it to validate transactions on the network. In exchange for staking your crypto, you can earn transaction fees and block rewards. So, instead of relying solely on price appreciation to earn a profit, staking provides a more stable option for investors to general steady returns, especially when bull markets spark more crypto interest.
Conclusion
Investing in cryptocurrencies during a bull market can be highly profitable, but it can also be highly risky. By following these strategies, you can boost your chances of earning a profit from your cryptocurrency investments while managing your risk.
Where to build your crypto portfolio?
HiRiBi is a specialized platform that offers a unique opportunity to sell Bitcoin for PayPal dollars. Despite PayPal’s cautious approach toward cryptocurrencies, HiRiBi has succeeded in providing a reliable service. The platform prides itself on offering the best rates for selling Bitcoin on the market due to its unique algorithm that constantly monitors market trends to provide users with the best offers available at the moment. On average, HiRiBi users can sell their bitcoins 5-10% higher than the market average rate. The platform is fast and only requires two Bitcoin network confirmations before USD is sent to your PayPal wallet. HiRiBi is also completely anonymous, requiring only an email for registration.
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