Crypto Investment Strategies: Part One – Buy and Hold “Blue Chips”
“How do I make money investing in crypto?”
In this series I will share the three basic investment strategies investors can adopt when investing in crypto. I’ll also touch on how you can use SIMETRI’s free Digital Asset Reports and ratings, to help you make smart crypto investments using some of these strategies.
Before proceeding further, please keep in mind, ALL cryptocurrencies are extremely volatile and high-risk investments. Different strategies offer different levels of risk and reward on a relative basis (within the world of crypto investing). But generally speaking, cryptocurrencies are much more volatile than stocks. Never invest any capital you cannot afford to lose. Further, even the largest coins on the market today (including Bitcoin) are far from the traditional definition of the term “Blue chip.”
Strategy #1: Buy and hold “blue chips”
The first strategy is a long term buy-and-hold (and forget about it) investment strategy. It’s similar to how stock investors invest in blue chips, only that cryptocurrencies are relatively much more volatile. The main benefit of this strategy is that it allows you to gain exposure to the entire crypto market without needing to spend too much time trading or managing your portfolio.
With crypto, you can adopt this strategy with a few variations. You can simply go to CoinMarketCap.com and look at the top 10-15 coins (by market cap) and simply invest the same amount into each coin (minus any stable coins like Tether). You can also consider increasing your position size in Bitcoin (BTC) by 100% to 500% of your average position size to give you more exposure to Bitcoin specifically.
There are a few downsides to this strategy. Crypto is still a very new asset class and the industry changes very quickly. Looking back at the top 10 coins on Coinmarketcap in early 2018, only five are still in the top 10 today, and 2 of them are not even in the top 20 anymore.
Another drawback with this strategy is that some of the larger coins on the market have little to no real world use cases today and since crypto is still a relatively new asset class, being in the top 10-15 today by no means imply that the coin will survive over the long run and continue to be a top crypto.
A variation to this strategy is to first create a list based on the top 20 on Coinmarketcap and then from this list of 20 pick out the 10 with the highest investment ratings from our free Digital Asset Ratings page.
These reports are the result of hundreds of hours of research and discussions with a coin’s management team as well as other institutional investors in the space. We also comb through hundreds of on-chain and off-chain data metrics to understand the health of a particular coin.
To get a better understanding of our evaluation process we have put together two educational videos that walk through our 7-part evaluation process: Evaluation Framework Part I (18 minutes), Evaluation Framework Part II (20 minutes).
You can also use these two educational videos as a reference when you conduct your own due diligence on prospective crypto investments. Always Do Your Own Research (DYOR) before investing in a coin.
Our Digital Asset Reports provide a full fundamental analysis of each coin along with an investment rating. We periodically upgrade or downgrade investment ratings on coins based on recent developments.
Keep in mind there is a 2-week delay on all free reports and SIMETRI members get first access to newly published reports before they are shared openly on CryptoBriefing.com, CoinMarketCap.com, Coingecko.com, and dozens of other major sites that integrate our Digital Asset Reports and ratings.
You can learn more about other SIMETRI member benefits here.
This concludes the first crypto investing strategy. As you can see this strategy is much more passive and since you are investing in larger cryptos, the gains will be significantly lower compared to other investing strategies.
Next, I will share with you my personal favorite crypto investing strategy, “Strategy #2: Playing Venture Capitalist.”
This strategy really has the potential to change your life. It allows you to invest very small amounts of capital for massive payoffs.
I hope this information has helped. Good luck and invest safely.