Cryptocurrency can be both a bliss and a disaster. Its signature Wild West volatility can shoot coin prices to the moon and also sink them down to the lowest bottom in a matter of a few days. But despite such aggressive fluctuations, the crypto industry has only boomed ever since its inception. Most of the early investors of crypto are at least millionaires now. In spite of the abrupt swings, crypto investment does hold the potential to take you to riches- provided you know how to invest for maximum profit. Read more about Multibank.io.
So, how to make crypto investments for maximum profit? Well, it’s no rocket-science- you just need to pay heed to a list of factors before you put your hard-earned money into the crypto boat.
Research is crucial
You can’t just shoot blind when you are planning to invest in a Wild West asset like crypto. Your crypto investment journey should begin with thorough research. You must develop a clear idea on the prospects of the coin in the near and long-term future.
There are two types of research and analysis that you must conduct for crypto investment when you are aiming for high profit- Technical Analysis and Fundamental Analysis.
Technical Analysis will provide a graphical representation of the performance of the coin you are planning for crypto investment.
This type of analysis is mostly suggested for day traders but you will need it for crypto investment as well. Technical analysis helps to understand the past performance of the coin- like how deep it crashed, how much it has been able to recover, how long did the coin take to recover from a crash, and such crucial details. The past performance of the coin can help to offer a basic idea about how the coin might fare in future. So, if you find that the coin has grown at an inspiring range since its inception and has shown fast and steady recovery, you might consider it for crypto investment.
Fundamental analysis will help to attain a sound understanding on the actual prospects of the crypto. If you want crypto investment with optimal profit, you have to find a coin that can promise a sustainable future. Check out the things below to carry fundamental analysis before crypto investment-
- Team behind the coin
- Website and whitepaper
Your chosen coin for crypto investment must be able to show or offer the following-
- Backed by an expert team hailing from tech, fintech, blockchain, or/and crypto background
- The website must clearly state the credentials and identity of the team members
- The coin is following the roadmap as outlined in the whitepaper
- The whitepaper does not talk about inflated goals that are too arduous to achieve
- Growing community, if not a big one
- Series of upgrades for future
Use case or application
If you are aiming for crypto investment for maximum profit, do not waste your money in coins that do not have a sound future. These are mostly the coins that do not carry any substantial use case or application in real life. Meme coins are one example here. Coins like these might show huge surge initially but are likely to vanish in oblivion once another meme coin takes over. People only pay attention to those assets in the long term that can provide them something of value. The same goes for the coins you are planning to choose for crypto investment.
A value or application-driven coin will always command high demand in the market. Rising demand would eventually soar up the coin prices, thereby making a coin a lucrative option for crypto investment.
The most win-win situation for highly profitable crypto investment is an application-driven crypto with limited supply- such as ETH or BTC.
If the coin carries a solid use case and comes with limited supply, it’s likely to drive high demand in the market. The demand for the coin will only increase over time with the total supply getting more limited.
If you are aspiring to make the most of your crypto investment, please do invest in a PoS coin.
The beauty of PoS coins is that they offer you the benefit of passive income through staking, i.e. another income stream for crypto investment. You don’t have to put the coins that you have planned for trade. But, you can certainly offer your idle crypto investment to enjoy staking rewards. Some of the leading crypto exchanges do not even charge staking fees.
According to experts, if you want to stake your idle crypto investment, go for crypto locked staking. The locked staking plan offers higher staking rewards than flexible staking plans. But, if you have plans to put the same holding for trade in case the market takes a dramatic swing upward, opt for flexible staking to save both sides.
One of the best parts about staking- apart from handy passive income with crypto investment- is that it allows you to choose from a wide range of staking periods.
Don’t just stick to one single coin or token if you are looking forward to earning high profit with crypto investment. Rather, try to diversify your crypto portfolio.
In that light, you can invest in bluechip coins for HODLing. If these are PoS coins, you can easily use them for staking as well. You can also make long-term crypto investment in highly promising altcoins. Then, you will need other coins for short-term investments or trading. As meme coins are rising, you can allot some money on meme tokens/coins as well for a brief time and then trade them off at high profit once they start surging up. Your cryptocurrency investment portfolio must have at least 3 types or cryptos.
So, you have quite a bunch of tips for crypto investment. Finally, you should understand that the storage of your crypto holdings is also important to ensure a stellar experience with the investment. Always try to store coins in cold offline wallets to protect your holdings from hackers.