Safe Investing in Cryptocurrencies
The cryptocurrency market often sees sharp fluctuations in quotations. For example, on November 16, bitcoin price collapsed by more than 10%. A sharp decline in the value of the first cryptocurrency was observed on September 7. Then the asset fell by more than 20% within a day. Experts explained how to secure their investments in cryptocurrency and make investments more effective.
Proper risk assessment
The cryptocurrency market is characterized by increased risk, and the probability of losing your funds is high, says the financial analyst of the cryptocurrency exchange. According to him, experienced investors and large funds take this fact into account, so they allocate no more than 10% of their portfolio to work with digital assets.
“This is a very reasonable approach. 10% is quite enough to feel the profit that cryptocurrencies can bring. On the other hand, another cryptozyme will not hit the portfolio much if digital assets in it are only 10%,” the analyst noted.
Preservation of funds
If we talk about investing from the point of view of primarily preserving funds, it is necessary to closely monitor the cryptocurrency market and buy more conservative assets, said the director of development of the cryptocurrency exchange. In her opinion, with this approach, the share of digital assets in the portfolio can reach about 30%.
Despite the fact that assets of the decentralized finance sector (DeFi) are among the most profitable, it is better to refuse from buying such tokens to reduce risks, the expert warns.
DeFi projects are indeed the most profitable on the market today, but the higher the yield, the higher the risks.
Effective algorithm for beginners
For a person who is not a professional trader or investor densely immersed in the subject of cryptocurrencies, it is dangerous to invest more than 5% of capital in digital assets, the CEO of Cryptorg is sure. According to him, the probability of entering the market at the maximum values is especially high for a newcomer, as well as to be involved in various fraudulent schemes.
The most effective and proven scheme – allocation of non-critical amounts for investment, which should be invested in equal portions every month in bitcoin, Ethereum, Binance Coin or top stocks, the specialist explained. He noted that such tactics can bring good returns in the long run and allow one not to spend much time on investments.