Tips to Invest in Cryptocurrency if you have a Low-risk Appetite

Investing in an asset as volatile as cryptocurrency can be very risky. However, is it possible to navigate investing in cryptocurrency with low-risk exposure?

Here are a couple of tips that could help you navigate the cryptocurrency investment landscape.

Start with little

As much as you want to rush in and 2x your money it’s better to start with an amount that correlates with your risk tolerance level. With $0.56 (200 naira) you can buy bitcoin or any other cryptocurrency listed on Quidax. So there goes your concern about having to buy a whole Bitcoin.

You could consider buying a small amount when the prices are low, you can use CoinMarketCap to see the historical price of any cryptocurrency. On a monthly basis, you can continue buying small amounts. The idea behind this is that if the price increases you can sell. As opposed to buying when the prices have hit a high and hoping it goes higher.

Set Limits

When the price surges, you want to make money from the difference by selling. It is best to set an amount which when it reaches you can sell. Let’s say you bought ether when 1 ETH was 50,000 naira you could decide that once it hits 50,500 naira you want to sell.

Once it reaches your sell price, that’s the time you should sell. Here’s the tricky part hoping that the price would go higher. Don’t you hate stories of people that lost out in 2017 because they sold too soon? If this happens, remember that the pain of losing money is often worse than the joy of gaining money.

Alternatively, to avoid losing out you could sell in bits. When it reaches, 53,500 you could sell 50% of your holdings if it reaches 53,800, sell 25%, then if the bull run maintains you could hold offload the remaining 25% at once or break it further. You need to decide what works for you.

One might ask what if I hold just $14 (5,000 naira) in cryptocurrency, the gain doesn’t seem significant? Consider that you are doing this for the long haul and it’s in line with your risk appetite. So your formula could be Buy low, Sell high, Repeat.

Diversify

As you increase your holdings of one cryptocurrency, you might want to gradually increase your holding from one cryptocurrency to a couple. Holding several cryptocurrencies helps mitigate against prices drop on one and prices gains on another.

When deciding other cryptocurrencies to buy finding answers to questions like; what problem does the cryptocurrency aim to solve, who is the team behind it, how has it performed over time, what caused previous price surges/drop?

Asking these questions will help you make the right choice on which cryptocurrency you want to add to your portfolio or even the first cryptocurrency one you want to buy.

Schedule reminders/notifications

A couple of the tips above sound like a lot of work, especially if you have a demanding job. Your phone’s calendar notification can do you a lot of good here. You can set notifications to do your research when you have free time. When you are commuting to or from work or during lunch might work for you.

You can also use apps like blockfolio that allows track cryptocurrency prices and set price alerts for when the cryptocurrencies you hold or are interested in, hit your buy/sell limit price.

Select the right cryptocurrency exchange

Selecting the right cryptocurrency exchange can go along way in helping you invest safely and securely. You need a platform like Quidax that is easy to use and allows you to deposit and withdraw instantly at all times. Mostly because prices changes happen fast and you need a platform that will not slow you down. It also helps if the exchange has 24 hours of support.

Here’s how to get started buying and selling cryptocurrency

A couple of the tips above sound like a lot of work, especially if you have a demanding job. Your phone’s calendar notification can do you a lot of good here. You can set notifications to do your research when you have free time. When you are commuting to or from work or during lunch might work for you.

This content is for educational purposes only. It should not be considered as financial advice. You should consult your financial advisor before deciding to store, buy or sell digital currencies.

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