Without a set of personal crypto investing strategies, you’re only gambling with your money.
Having a strategy will not only give you direction and clarity in your crypto investments but will also help you maximise profits and minimize losses.
In this post, I will be sharing with you my personal most effective crypto investing strategies.
Hopefully, you can borrow inspiration and ideas from what works for me and develop your own winning strategy.
My personal crypto investing strategies:
I have at least one strategy for every aspect of my cryptocurrency investments. From buying through when I decide to exit the market entirely.
These personal crypto investing strategies are constantly evolving to adapt to the changing condition of the market. Currently, I have my:
- Buy strategy
- HODL strategy
- Take profit strategy
- Trading strategy
- Diversification strategy
- Portfolio management strategy
- Exit strategy
Let’s discuss these strategies below, how they work for me, and how you can adapt them for your own purposes if you like.
1. My buy strategy
My decision to buy any cryptocurrency is usually based on either pure speculation or fundamentals using separate capital for each.
For example, I have a “risky dollar fund” for my degen trading and investing operations which I can afford to lose.
I will usually use this fund to buy into the SAFEMOONS, SHIB, PMON, SAFEMARS, kinda “shitcoins” for possible quick gains.
Any realised profit from these purely speculative investments (gambles) will then be diverted to my main investment fund to build up my portfolio.
My main crypto investment funds go into projects with solid fundamentals and a sustainable business model.
It usually takes time and a good amount of research and analysis for me to decide on a coin to buy with this money.
And I would be comfortable holding on to these coins for as long as possible. Or until there’s a major shift in the fundamentals of the project or my investment goals.
Click here to learn how to perform a cryptocurrency fundamental analysis all by yourself.
Another buying strategy I use is my personalised version of DCA (dollar-cost-average).
Normal DCA strategy requires buying your favourite coin periodically with a fixed or variable dollar amount.
For example, $10 every week regardless of the current price of the coin.
However, for me, I prefer to save up my fiat budget and use it to buy occasionally at every dip or market correction.
2. My HODL strategy
You would make more money from buying and holding cryptocurrencies with solid fundamentals and a sustainable business model than in any other way.
However, I don’t like IDLE money.
I like to put every cryptocurrency I HODL (hold) to work while I wait for the price to go up.
Some of the ways I put them to work are via staking, farming, liquidity mining, lending, etc.
Click here to learn about the top 5 things you can do with your cryptocurrency
Thus, I am effectively growing the amount of the coin in my portfolio in these ways, while hoping for the price to go up with time.
No coin or token you own should be sitting idle in your wallet. They should be put to work to help you grow your wealth faster.
3. My take profit strategy
The only profit you make is the one you take.
At some point, you need to cash out your profits to pay for real-life bills.
For the coins I buy based on speculation, I take out my original capital and about 25% of the profit after a 2x.
That way, I have recovered my investment and booked some profit in case the project turns out to be a scam, dies from a hack or exploit.
Subsequently, I would sell 25% of whatever is left at 3x, 4x, 5x and 5x or in a similar fashion.
And depending on how scary the project feels to me, I could also sell everything after I get a 2x on my investment and walk away.
The gains from these coins are usually not sustainable. Thus you will want to take your money off the table as quickly as possible so as not to lose it.
However, for the coins I HODL for the long term, I spend the returns they generate from staking, lending, or farming whenever I need money and leave the original capital to keep working for me.
But if the profits I generate on my crypto assets is not enough to cover the bills I need to pay right now, then I will opt to borrow against them on crypto lending platforms such as Celsius, Nexo, Compound Finance, or Venus.
In either case, selling my original stack of coins is not an option except it’s an absolute necessity.
Click here to learn how to spend your crypto without selling it
4. My trading strategy
Cryptocurrency trading is the fastest way to make a lot of money or go totally broke in a very short time.
And just in case you don’t know, more than 90% of all crypto traders lose money and fail at the end of the day.
Except you’re a professional and experienced trader with a track record of success avoid trading (especially day trading).
However, if you use my crypto trading strategy, you’re guaranteed to just not lose money but make a profit every single time.
This trading strategy is extremely simple and straightforward —buy low, sell high.
Buy your favourite cryptocurrency based on solid fundamentals, set your (profit) sell target(s) and wait until the price gets there before selling.
Yeah, I know that sounds easier said than done.
But in this post, and in my “degen trading strategy” I laid out step-by-step how I execute this strategy in real life.
Click here to learn how to find your own winning crypto trading strategy
5. My diversification strategy
The purpose of diversification is to spread risk and avoid losing all your money should anything go wrong with your investment.
Aside from keeping my coins in different wallets and exchanges (storage diversification), I make sure to invest in different promising sectors and subsectors of the crypto economy.
It’s also a good idea to invest in different projects within the same sector or niche as part of your diversification strategy.
That way, if any particular project or sector is performing poorly, you can rely on the other to keep you afloat.
Click here to learn how to effectively diversify your cryptocurrency portfolio
6. My portfolio management strategy
One thing that’s most constant with my cryptocurrency portfolio is change.
I am constantly balancing and rebalancing my cryptocurrency portfolio to correct old mistakes or take advantage of new opportunities.
The aim is to evolve with the market and align my portfolio accordingly so as not to be left behind.
After all, not all of the current over 10,000 different cryptocurrencies in the market will survive next 2 to 10 years.
And I don’t want to catch myself holding onto the wrong one(s) into their grave.
When I notice that a particular project I’m invested in has lost direction or the solution it offers will become irrelevant anytime soon, I divest and put my money into the one with a superior product and sustainable business model.
Over time I aim to consolidate my position in different solid cryptocurrencies on the major chains and in different sectors of the crypto economy.
7. My exit strategy
More than 90% of my entire investment portfolio is in cryptocurrency. So except the industry goes into extinction, I am not exiting crypto.
Therefore, my exit strategy for crypto generally is no exit.
However, I do have an exit strategy plan for every coin or token that I buy.
For most long term investments, the strategy is to HODL forever and spend only the returns they generate.
And the ones I have no interest in holding forever, I will exit whenever I get a 5x to 10x on my investment. Then divert the money into the ones I plan to hold forever.
Conclusion
Without a strategy, an investment could quickly turn into a gamble, especially in the highly volatile cryptocurrency market.
A solid crypto investing strategy will give you direction and keep you focused at all times.
In this post, I discussed with you my personal crypto investing strategies and how I execute them in real life to stay on top of my game.
Each aspect of your crypto investing should have a strategy that you follow.
From buying to trading, managing and diversifying our portfolio, nothing should be left to chance.
That way, even if you make losses along the way, you will know where the problem or mistake comes from and work to correct it accordingly.
But without a plan and strategy, you’ll be walking in the dark with your money in your hand. Soon enough, you’ll lose it without know why or how.
What is your crypto investing strategies? Share with us in the comments section below.