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4 Cryptocurrency Investment Strategies for Beginners

It seems every dinner party includes a conversation on cryptocurrency at least once before the dessert arrives.

You can typically split the diners into one of two categories: those who obsessively read every tiny bit of crypto news on social media (and are ready to offer you their unsolicited investment advice, and those whose knowledge on crypto is limited to having heard the term Bitcoin once (maybe)

If you are in that latter category, this guide will help. Follow these four Cryptocurrency investment strategies for beginners. 

1. Create a Balanced Portfolio

Financial investors working with the stock market typically create a balance of share investments across different businesses and sectors.

There is an obvious benefit to doing this. If one industry struggles, only part of your portfolio suffers a financial hit. You’ve cushioned the rest.

You can try out that same strategy with cryptocurrency. Crypto markets tend to be volatile, and by creating a portfolio of a range of cryptocurrencies, you can protect yourself from the worst of that volatility. 

2. Pick the Biggest Cryptocurrency

The steepest learning curve with cryptocurrency trading is the challenge of following different trading patterns of tens or hundreds of currencies.

There is a more straightforward option if you are a complete beginner. Instead of learning about multiple Cryptocurrencies, focus all your time and effort on learning about one. Use that as the starting point for your investments.

As of 2021, the largest cryptocurrencies are: 

  • Bitcoin
  • Ethereum
  • Tether

By focusing on one of these three, you can learn the basics of Cryptocurrency investment. Once you understand one, it will be easier for you to expand your assets. 

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3. Pick Your Exit Price

If you want to dabble in a bit of cryptocurrency trading using a small sum, a simple entry and exit strategy is one of the most beginner-friendly options. 

This strategy involves trading in the market volatility. You monitor the asset price, pick a moment to invest, and decide on an exit price, which is the price you’ll be happy selling.

This method helps you avoid hanging on to an asset for too long and attempting to predict future trends. You exit out once your investment has made the target profit. 

4. Dollar Cost Averaging

If you want to get more advanced with your trading strategy, the easiest formal method to try is the Dollar Cost Averaging approach. 

In a nutshell, the Dollar Cost Average strategy involves splitting your entire investment into smaller parts and investing each small amount at the same time of day, each day for weeks or months. 

This strategy protects your entire investment from exposure to volatility from the whole market. 

Cryptocurrency Investment Strategies That Anyone Can Try

You don’t have to be a full-time investor to try cryptocurrency. With these four simple cryptocurrency investment strategies for beginners, anyone can explore this exciting market, whatever their level of knowledge. 

For more financial tips, check out our business section for the latest advice and trends.