A good investor always creates a portfolio instead of the age-old all-eggs-in-one-basket method. While making such a portfolio, it is essential to add cryptocurrencies along with traditional investments. Remember that crypto trading also comes with investment risks. Some cryptocurrencies have outperformed the stock markets, while others have declined. Thus, it would be best to create a portfolio that would nest your earnings, nullifying any sudden market changes and maximizing your wealth.
However, there is no one-portfolio-fit-all method. Each investor’s appetite is different. High-risk investments deliver high returns. However, such a philosophy will not stand with all. There are several factors to consider while creating a strategy; interestingly, age is also an imperative element.
The Age-Specific Crypto Investment Strategy
The best crypto investment strategy is to sell the coins when the price rises and buy when it is crashing down. However, it takes an expert to deal with these volatile instruments. Professional traders (older millennials and Generation X) are likelier to play this market for their gains. However, young traders who enter into the investment in a bull market or retail investors cannot handle the thrill of their investment increasing or decreasing 25% each day. If you are a weak hand or easy to give into market manipulation, investing in crypto mutual funds, or asset management firms holding a high amount of cryptocurrencies is best.
Older Generation Investors
Older generations prefer low and steady income from their investments. They do not desire to take up new genres of investments with high risks. Thus, most Gen X investors do not prefer crypto trading. However, when they do buy cryptocurrencies, they tend to spend considerably more than the Millennials and Generation Z.
Persons looking for steady income for cryptocurrency can try staking or lending. These are not zero-risk options, but the risk is pretty small. One can also enjoy a yield while holding the currency. Experts recommend keeping your investments for two to five years as you can gain some steady passive income.
Younger Generation Investors
Generation Z, who are in their early 20s, outnumber Generation X (those in their 40s and 50s) by 15.5 times in terms of digital assets. However, Millennial buyers and Generation Z have less money to spend on cryptocurrencies. People usually accuse credit card debt, auto debt, student loans, and others of this gap.
Miscellaneous Statistics Based On Generation
- Out of 64% of millennials who have made investments, 38% have cryptocurrency investments. 15% of them own NFT.
- Old and wealthier millennials are very interested in cryptocurrency.
- Generation Z and X are bullish. They both believe that cryptocurrency would give significant output in the next decade.
- 44% of millennials and 58% of baby boomers have confessed that cryptocurrency is confusing. Only 5% of baby boomers can explain what cryptocurrency is.
The Gender-Wise Crypto Investment Strategy
Crypto trading is far riskier than traditional instruments. Studies prove that men are more likely to invest in riskier investments than women. People also credit financial literacy as an essential element. Men are financially more literate than women and thus have more interest in crypto trading.
There are twice as many male crypto investors in the market as women. This gender gap is not just in crypto trading and can be seen in traditional investments like individual stocks, real estate, bonds, etc. Recent surveys however reveal there has been a 172% hike in women investors looking for good crypto investment strategies, whereas there is only an 80% increase in male investors.
How To Start Crypto Trading?
The first step is to learn the basis of cryptocurrencies and trading. There are several cryptocurrencies beyond Bitcoin. A good crypto investment strategy would be investing in buying assets directly through registered crypto exchanges or brokers’ platforms. You may opt to buy more than one type of digital asset, and in fact, it is wise to do so to avoid a total loss when the market fluctuates. The currency’s value goes up and down with the buyers’ demand; thus, creating a diverse portfolio of different currencies is a good investment strategy.
Type Of Crypto Investments
- You can directly buy and save cryptocurrencies. The most common currencies are Bitcoins, Ethereum, and others. No two digital assets will perform similarly. Thus, make an informed decision while choosing one.
- You can also invest in companies that deal with crypto trading, like mining hardware manufacturers, mining companies, and more. Some also prefer to buy stocks of companies that hold the most amounts of cryptocurrencies.
- Just like mutual funds, there are cryptocurrency-focused funds. You can choose to create a portfolio based on different choices like futures funds, index funds, and others.
- Some choose secure options like investing in a cryptocurrency Roth IRA.
- Are you more of an on-the-battlefront guy? You can become a miner or validator, gain cryptocurrency rewards, and hold them as your investments or trade them.
Choosing The Right Exchange
While buying cryptocurrencies from exchanges, you should choose a reliable and feature-filled exchange. Global crypto exchanges like PayBito offer:
- Multiple cryptos assets and trading modes.
- Integrated Fiat-Crypto and Crypto-Fiat Conversionin multiple currency denominations.
- Charts, tables, and other advanced options for analysis and research.
- High-security hot and cold wallets for safe-keeping investor assets.
- Low transaction processing fees.
- 2FA, DDoS Mitigation, Firebase, SegWit, BIP32, and ERC20 compatibility.
Possible Areas of Danger The Crypto Market
The previous year’s bull run made several people think of digital assets as a safe investment option with high returns. The phase has fizzled out this year with the stablecoin crash, the 3AC incident, and the subsequent crypto winter reducing the total crypto market capitalization in half. The volatility may result in investors winning big, but it can also drag them to the bottom of the pit.
There are several additional elements to consider. The second is the transaction fee. Beyond these, there are tax burdens of using cryptocurrencies and hackers trying multiple ways to hijack your account or wallet.
Which Generation Can Invest In Crypto Trading?
The price of digital assets is very volatile. Thus, older generations, who are conservative investors, prefer to stay away from such investments. If you have the cash availability and the ability to sit through market risks, you can gain huge returns. Beyond just buying currencies, investors also buy stocks of companies with exposure to crypto trading and also invest in Bitcoin-focused funds.
Since older millennials have more disposable incomes (wealthier individuals or ones with high-paying jobs) and more time to work, they are more likely to explore several facets of crypto investment and create a portfolio. According to statistics, millennials earning more than 75 thousand dollars a year are more likely to invest in digital assets than others. It does not take much to own a cryptocurrency. One can buy a unit of cryptocurrency for two units of local currency, but making a substantial return needs substantial investment and not just a handful of currencies.
How Do I Make Money With Crypto Trading?
It is similar to the traditional market, like how a company’s stock value increases when people prefer to buy more; the value of cryptocurrency rises when people prefer to buy more units. It is the common demand-supply concept. If people avoid buying a specific currency, the value decreases. Cryptocurrency is a high-risk investment similar to volatile assets like Penny stocks
No matter what crypto investment strategy you prefer or how much you plan to invest, it is crucial to learn in and out about each currency before investing. This market’s regulations and other features vary daily and between countries. Thus, always keep an eye open.