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How to Invest in Cryptos – Cryptocurrency Investment strategies

In this article we will discuss: How many cryptocurrencies are there? Why are cryptocurrencies so popular? How to buy Cryptocurrencies? Different cryptocurrency investment strategies and in the end there is a most important tip for you if you are planning to invest your money in the crypto market.

Cryptocurrency investment is a new investment class with very low historical data and analysis. Nowadays every person related to the internet is familiar with it but there are very few who know how to invest in cryptocurrencies. In this article we will discuss: How many cryptocurrencies are there? Why are cryptocurrencies so popular? How to buy Cryptocurrencies? Different cryptocurrency investment strategies and in the end there is a most important tip for you if you are planning to invest your money in the crypto market.

How many cryptocurrencies are there?

According to CoinMarketCap, there are more than 10,000 cryptocurrencies that trade publicly. In an estimate, the total worth of cryptocurrencies is more than $1.7 trillion. Cryptocurrencies are rising continuously and making their worth stronger. In the chart, there are 10 top cryptocurrencies with their net worth.

CryptocurrencyMarket Cap (USD)
Bitcoin (BTC).757,713,813,651
Ethereum (ETH).303,157,151,986
Tether (USDT).61,518,228,414
Binance Coin (BNB).57,841,976,714
Cardano (ADA).50,664,897,256
Ripple (XRP).41,020,960,986
Dogecoin.42,465,081,989
Polkadot (DOT1).25,268,777,757
USD coin (USDC).23,715,243,945
Uniswap (UNI).12,606,541,662

Why are cryptocurrencies so popular?

There are multiple reasons behind the popularity of cryptocurrencies. Some of these are

  • Cryptocurrencies are known as the currency of the future and it is assumed that in the future paper currencies will be totally replaced with cryptocurrencies. This perception caught the attention of traders and made it more popular.
  • Cryptocurrencies are not trackable and nobody knows how many crypto coins a person has. These security measures are also a reason for its popularity.

  • Cryptocurrency is based on blockchain and it is not hackable. Till now no hacker has cracked this system. And it is more secure than traditional trading ways.

How to buy Cryptocurrencies?

Like real money forex exchanges, there are a lot of crypto exchanges from where you can buy cryptocurrencies. Some of these currencies like bitcoin can be directly bought against USD (Like online shopping with credit or debit cards) and other cryptocurrencies can be bought or converted with bitcoin.

 To buy a cryptocurrency you need a wallet in which your cryptocurrency will be saved. Generally, your selected crypto exchange provides you a wallet after registration and you can save or transfer cryptocurrency into this wallet. There are the following trusted crypto exchanges you can choose any of them and buy your cryptocurrency.

Crypto ExchangeWorking Cryptocurrencies
Coinbase (visit)Work with more than 30 cryptocurrencies.
eToro (visit)Trade with more than 15 cryptocurrencies.
Robinhood (visit)Trade with seven cryptocurrencies including BTC, ETH, and Bitcoin Cash.
webull (visit)Work with only four cryptocurrencies  BTC, ETH, Bitcoin Cash, and Litecoin.
Binance (visit)Work with more than 500 cryptocurrencies.

Cryptocurrency Investment Strategies

Cryptocurrencies are highly profitable but if you start investing without a plan or strategy you will definitely lose all of your hard-earned money. Therefore, always read and implement the best strategy to minimize risk factors. Below are the top 3 best strategies to start investing in cryptos. For these strategies, you must know how to read charts, especially candlestick charts.

1- Dollar Cost Average (DCA)

DCA is a well-known and most popular working strategy that works very well on long-term trading. The main concept of DCA is divide and conquer rule. This means instead of investing all of your money into a single currency divide it into small units and invests into multiple currencies. Choose a specific time and at that time buy only your selected coins repeatedly. 

For example, Mr. Johns has $1,000 to invest. He decided to invest by using the DCA strategy. Therefore he divided $1,000 into 10 small units and chose a specific time. Assume he is a salary-based person and decides to buy for the 5th date of every month. So for the next 10 months, Mr. Johns has bought multiple currencies. This strategy will reduce Mr. John’s risk factor and market volatility. 

The other reason DCA is more reliable is that almost all crypto trading bots such as Profit Trailer are working on this strategy and generating profit. By learning this strategy you will definitely set your trading bot and make your trading automatically.

2- Death Cross

In the Death cross strategy, two moving averages are used to check market trends. For this strategy, you need to place a short-term and a long-term moving average on the chart and read them carefully. If the short-term moving average exceeds the long-term moving average or short-term moving average crosses long-term moving average from bottom to top this means that there is a buyer’s trend. You need to buy it to gain profit. 

If short-term moving average cross long-term moving average from top to bottom. This means buyers are selling their assets and you also need to sell and exit from this trade. Below is an example with 50 MA and 200 MA.

moving_average

3- RSI Strategy

For this strategy, you must have the more technical knowledge to implement this strategy but it is more effective than others. In the Relative Strength Index strategy, you need to check the trend of the chart by analyzing the gains and losses over 14 days. RSI line moves between 0 to 100 and indicates when an oversold or overbought condition occurs.  Whenever the indicator line breaks 70 it means that there is an overbought condition and you should sell your assets if you have. On the other side when the line is below 30 it is an oversold condition and you can buy assets. 

RSI strategies sometimes give false results So you must be careful and also check other signals to implement this strategy.

RSI

Tip of The Article

One thing you must have in your knowledge is that there are no algorithms or cryptocurrency investment strategies that will give you 100% accurate results. Only you can overcome your risk factor by implementing these cryptocurrency investment strategies. 

From the above strategies, you can make your own strategy by combining all of them. For example, if you have $1,000 first of all you need to divide it into small units. After that select 10 different cryptocurrencies to start investing. Then check the trend of each cryptocurrency by using the Moving Average Strategy and also cross-check it with the RSI strategy. When there is a solid confirmation by Moving Average and RSI strategy you should go with it and buy your selected currency. 

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