Posted 11 months ago | by Ben Armstrong
How to Take Your Crypto Game to the Next Level
Most new crypto investors approach trading with a pump and dump and fiat-based mentality that results in them loosing their money and hindering their options to making good decisions. These are some tips and strategies on how to avoid this.
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Do not Rush when Purchasing Crypto Because you Fear Missing Out
A lot of people jump into the wagon when they hear about the last new thing by buying a coin when it is at really high value with the expectations of seeing big returns, which most of the time is not a great idea.
Dollar-cost averaging (DCA) is an investment strategy where a person invests a set amount of money over periodic purchases of the desired asset regardless of the price it has at the moment.
The goal of such a strategy is to increase an investor's exposure to an investment asset slowly over time instead of all at once, allowing it to reduce the risk associated with purchasing an asset that is highly volatile on a day-to-day basis while gaining exposure to the long-term trends of the asset.
Bitcoin dollar-cost averaging consists of investing a fixed amount of USD into BTC at regular time intervals, such as $10 every week.
This strategy is mostly used by investors that are looking to purchase Bitcoin for the long-term since it protects them from potentially allocating all their capital at a price peak causing you to endure extreme losses.
While the technique may result in missing out on some true bottoms, it also avoids compulsive “fear of missing out” (FOMO) buying.
Detach Your Mindset from Playing the Fiat Game
Most people talk about cryptocurrencies in terms of the U.S. dollar value by using it as the point of reference to measure their gain and losses but the fact is that they should be measuring value using Bitcoin.
Using the DCA strategy is one of the first steps to detaching the mindset of playing the fiat game with crypto instead of the crypto accumulation game, which is the one crypto investors will benefit the most from.
The truth is that although Fiat currencies might seem to most people as safe and non-volatile options that seem to be a good indicator of performance are just the same as cryptocurrencies when it comes to changing in value and as so, they are a not better indicator than other crypto coins.
Bitcoin is the most popular cryptocurrency and with that comes a myriad of benefits when it comes to using it as an anchor point, with consistency and similarity in nature being the most important.
Use Cryptocurrencies to Buy and Sell Cryptocurrencies in Times of Need
The use of stablecoins when there is a feeling that the markets are about to tank by swapping all crypto holdings into a stablecoin allows the investor to buy back when the price is lower, increasing the holdings.
The massive drops experienced by crypto investors back in 2018 could have been avoided by using stablecoins in this way, enabling them to triple or quadruple their holdings as the price dropped as a result of the market crash.
By utilizing Decentralized Finance (DeFi) projects, staking coins, and using¬ crypto social media projects, a passive addition of cryptocurrencies can be generated to increase holdings or swap it for one that fits the user’s need.
How to Check a Coin’s Value Against BTC
As mentioned earlier, comparing a coin’s value against BTC is the best indicator of a coin’s performance as a cryptocurrency.
The reason for this is that although the USD value may be down for a coin, its pairing to ETH or BTC could be a decent amount of Satoshis, the smallest fraction of BTC.
To check this raw value, an investor needs to just open up Coinmarket Cap or CoinGecko to see each coin paired against the two top cryptocurrencies: BTC and Ether at this time.
Look for Gems that can Boost your Portfolio
A unique strategy for trading is finding coins with low satoshi value (low market cap) cryptocurrencies (gems), and then flip the gains split 40/40/20 into low caps and medium caps and save some ETH/BTC as the prices rise.
However, it is important to be careful about which projects you do this with. Divide your portfolio into categories: long term hold, medium hold, short term hold, and buy and sell.
The buy and sell category are the cryptos that you are strictly going to buy wait for a pump and then sell these are those you believe are just pump and dumps.
The overall end goal with the buy and sell and short term hold is to increase your BTC and ETH holdings when the ETH and BTC pairings increase on these coins.
It is also a good idea to set out goals that are reasonable such as owning 50K Cardano or 100 EOS, and then just going for it by cost averaging in from pocket or reach it through the strategy of trading low cap gems and buy and sell cryptos.
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