How To Build A Crypto Portfolio Without Breaking The Bank
Cryptocurrencies have been on a downtrend for the better part of 2022. Bitcoin, the number one cryptocurrency, is down by over 70% from its November 2021 highs and sliding lower. While this may sound scary, history shows these are opportunities to invest in crypto. After all, the best time to buy any asset is when prices are most depressed.
Besides, cryptocurrency trading and investing has more benefits than trading in other assets. Among the benefits of cryptocurrency is high volatility, given the right skills and tools which can be acquired using PrimeXBT as the platform, which makes it possible to make high returns quickly. For instance, anyone with a short position on Bitcoin or any other cryptocurrency over the past few months has made good money.
That said, despite the benefit of volatility, the massive drawdowns that come with crypto can be stressful for those who go all-in on crypto. The trick lies in building a crypto portfolio in such a way that no matter how low the market goes, it doesn’t affect you much. This goes beyond the cliché of only investing what you can afford to lose. So, how do you go about it?
Below are a few tricks you can use to build a crypto portfolio without breaking the bank or feeling the pain whenever the market doesn’t go your way.
Understand Market Cycles
From 2009 to date, cryptocurrencies appear to have formed a 4-year cycle interlinked with the Bitcoin halving. Immediately after the halving, the market rallies and peaks a year later. A correction then follows, followed by consolidation until the next halving. If you can master this cycle, it is possible to buy cryptocurrencies at depressed prices – and not necessarily invest a lot – and pivot to stable coins until the next halving. Following this cycle can easily build a significant crypto portfolio over time.
Target Low-Cost High Potential Altcoins
Once you understand the market cycles described above, the next step is to find out how to maximize gains with minimal investment. There are lots of ways that you can do it. One of the best ones is to go for low-cost but high-potential altcoins. For context, anyone who invested in Shiba Inu when it launched in 2020 made millions off investments of under $100.
For this strategy to work, you need to dedicate your time to research. Make sure that you follow various crypto media, including social media, to be in touch with the latest on token launches.
If you do this and invest time in it, you can easily strike the jackpot without investing a lot of money.
Make Use Of Crypto Trading Tools
One of the best ways to invest in crypto without breaking the bank is to borrow investment capital from exchanges. This helps you augment the amount you can make off your capital at any given time. To make the most of this, make sure to invest through an exchange that not only allows you to borrow investment capital but also has strong risk management tools. By doing this, you can make money off a small investment capital, while also cutting on the risks of a margin call.
Dollar-Cost-Average Into Crypto
In highly volatile markets like crypto, what hurts the most is when you invest a sizeable amount of money at once, then the market dumps. To deal with this problem, opt for dollar-cost-averaging. This entails buying cryptos using a minimal amount of capital but over a significant period. The best way to do it is to buy whenever the market dips. By taking this approach, you can build a significant portfolio, and never feeling the pain, regardless of how volatile the market gets from time to time.
Cryptocurrencies are profitable but also highly volatile investments. To minimize the emotions, they elicit in their price movements, find a strategy that allows you to make the most of the market without investing too much is best. They include understanding market cycles, investing in high potential altcoins, dollar-cost-averaging, and investing using the right exchange.