10 Tips & Tricks to Maximize Returns on Your Crypto Investments
Do you intend to invest in cryptocurrency simply because a friend or neighbor does so? Or are you rushing to invest in cryptocurrency because you read about crypto hype and its massive returns in the news? STOP! first start by reading about the top 10 tips and tricks to maximize returns on your crypto investments.
Investing in cryptocurrencies or any other financial market is not a joke. As a beginner or even a seasoned player, you will need to consider a variety of factors and keep various crypto investment tips and tricks in mind in order to maximize your returns and minimize the risk.
For example, you must research the crypto market, understand various types of cryptocurrencies such as Altcoins, Stablecoins, and Metaverse coins, choose the right crypto coins to invest in 2022, choose the right crypto exchange, and much more. This blog delves into 10 expert tips for maximizing your cryptocurrency returns.
Let’s get started!
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10 Expert Tips To Maximize Crypto Returns
1. Research! Research! & More Research!
The first thing you should do before investing in cryptocurrencies is to research the crypto space. As we all know, cryptocurrency is a pretty new and complex idea that most of us are unfamiliar with or have only a hazy understanding of how it works. Moreover, there are lots of different kinds of currencies, including Metaverse coins, Alt Coins, Stable Coins, and many others.
In addition, each crypto coin has some backing from fiat currencies or technologies. For example, USDC is a stable coin that is pegged to the US dollar. On the other hand, Metaverse tokens are the currency used by people in the Metaverse. Moreover, you can analyze the cryptocurrency trends over the last 1-2 years to better understand its behavior during key events.
All of this knowledge will help you get more familiar with the crypto space and maximize your returns on crypto investments.
2. Start With Small Capital
Another important thing to remember while investing in cryptocurrencies is to always begin with small capital. It is strongly advised that you do not put all of your money in at the start. For example, if you intend to invest 10,000 AED in a month, divide the amount into five equal packets of 2000 AED each. Then invest the first packet and track the movement of that crypto.
If the price of that cryptocurrency falls even further, invest the second packet– 2000 AED. Continue until you reach the fifth packet. However, this does not imply that you should only invest in one crypto coin. You can also invest in other cryptocurrencies if you believe they are promising. But the bottom line is always to start small and progressively expand your investment over time as you gain experience.
3. Invest In Right Crypto Coins/Digital Assets Only
The next thing to remember while investing in crypto coins is to choose the right coins. You should know that there are over 8,000 cryptocurrencies in existence at the time of writing this post (January 2022)!
As one might guess, it is nearly impossible to become acquainted with each of these crypto coins and to track them separately. For this reason, the best you can do is gather information about the best cryptocurrencies to invest in or the best crypto coins with high returns. For this, You can turn to several websites or crypto exchanges, such as Fasset.
Moreover, it is always preferable to invest in crypto coins with substantial market volume or low volatility, such as Bitcoin (BTC), Matic (XRP), Cardano (ADA), and others. Also, as a beginner, we recommend that you invest in stablecoins rather than any random cryptocurrencies.
Learn about Crypto Margin Trading here
4. Partial Profit Bookings At Targets
Partial profit booking is a well-known method of profit booking among seasoned investors. It is one of the investment strategies of profit booking that intends to protect investments and ensure that profits are not lost due to a sudden price reversal in the crypto coin/s.
For example, if you purchased 100 units of a particular crypto coin at 50 AED, you will sell 50 units when the price reaches 54 AED, 20 units when the price reaches 56 AED, and the remaining 30 units when the price hits 60 AED.
This approach offers several advantages, including the following: partial profit booking protects the trading capital to a large extent, lowers risk, and allows you to re-invest the money you made by selling the first slot of crypto coins, i.e., at 54 AED. So, if you want to maximize your crypto returns, follow a partial profit strategy.
5. Keep Calm During High Volatility
Remember that when you invest in cryptocurrency, you will frequently witness high volatility. Cryptocurrencies are a very volatile market for various reasons, including the fact that they are still in their infancy, fluctuating or upcoming crypto regulations, crypto investor and user sentiment, and much more.
As a beginner, it is natural to get tense and impatient during a tumultuous market and to sell out all of your holdings. However, this rash and rushed approach will only result in a loss of your money.
Instead, it is advised that you remain cool and refrain from engaging in any trading activities during this period or when you expect erratic market movements.
In fact, at this time, you might rather invest your efforts in investigating the causes of the market’s decline or to get an idea about several key market movers that have contributed to market volatility. This will not only familiarize you with the crypto industry but will also prepare you to deal with similar scenarios in the future.
6. Set Aside ‘Emergency’ Capital
The 6th piece of advice for maximizing the return on crypto investment is to keep some capital in reserve at all times. By emergency funds, we mean a quantity of money set aside to invest at a time when prices are low. Never invest your entire capital at once.
For example, as we all know, the cryptocurrency market is quite volatile for various reasons, as explained in one of our earlier blogs. So it’s likely that prices will fall for various reasons, such as unfavorable government policies or so.
During such a decline, if you have a reserve fund to invest in, you can use that fund at that time to buy cryptocurrencies at very low rates. This will also help you in hedging or reducing risk.
7. Never Time The Market
Time the market is a trading method in which investors buy or sell crypto assets by forecasting future market price swings by performing technical analysis. In other words, it is common practice to enter the market at the most advantageous times while avoiding the most disastrous times.
This strategy attempts to buy crypto coins at cheap prices, sell them at a higher price, and make a profit– a pretty basic concept that every trader has in mind. However, the difficulty with market timing is that no investor can get it right all of the time.
Even if a few of your calculations, technical analysis, or predictions go wrong, you will have to incur a significant loss, and your entire portfolio will suffer as a result. For this reason, as a beginner, you must avoid market timing. Rather, trade based on crypto coin’s fundamentals and performance.
8. Set Stop Loss Levels
Cryptocurrency values can fluctuate by 20-30% in an hour or you can witness massive market movements due to the it’s highly volatile nature. As a result, it is critical to limit the risk. One such approach for limiting the investor’s loss is using a stop-loss order. In layman’s words, a stop-loss order is an order placed with a cryptocurrency exchange to purchase or sell a specific cryptocurrency once it hits a certain price.
Let’s look at an example to see how this works. Suppose you buy a Bitcoin for $35,000. Right after buying the BTC, you enter a stop-loss order for $34,800. If the price falls below $34,800, your Bitcoin will then be sold at the prevailing market price. Stop-loss orders are entirely free to use. In other words, stop-loss orders are a form of free insurance policy that protects your cryptocurrency investment.
9. Build Balanced Portfolio
Another thing to keep in mind while investing in cryptocurrency is to have a well-balanced portfolio. Rather than putting all of your money in a single type of cryptocurrency, we recommend that you research and choose multiple types of crypto coins such as Altcoins, Stable Coins, Metaverse Coins, and many more. Diversification ultimately lowers the risk factor.
For example, suppose you buy just Metaverse crypto coins, but due to some negative news, the prices of Metaverse coins tumble on the face. Naturally, you will suffer significant losses in such an undesirable scenario. To avoid this, diversify your investments at all times.
Also, as previously stated, rather than investing in any random cryptocurrency, choose those with better market performance, decent market cap, and minimal volatility.
10. Always Choose The Best Crypto Exchange
The 10th and final investment advice for maximizing returns on cryptocurrency investments is to pick the best crypto exchange. When selecting a crypto exchange, there are various factors that you should consider, such as,
Number of cryptocurrencies available for trade
Platform stability and security
Payment options & methods
Crypto transaction fee
2-factor authentication
Fees and charges
User interface and User experience, and
Customer support
Always select the platform that provides the best combination of all of these qualities. Thankfully, the Fasset crypto exchange is one of the top cryptocurrency trading exchanges that you can trust blindly. It provides impenetrable security, a rich portfolio of crypto coins, no transaction fees, a user-friendly, intuitive interface, and several other benefits.
This brings us to the end of this article. To maximize the returns on your cryptocurrency investments, make sure you follow all of these tips and techniques. Also, begin your crypto trading journey with a small investment, educate yourself on necessary market terms and trends, diversify your portfolio, and focus on partial profit booking on targets.
Read our previous blogs to learn more about cryptocurrencies, virtual worlds, NFTs, digital assets, blockchain technology, and other topics. To begin your cryptocurrency investment journey, simply register with Fasset, select a payment method, and begin trading.