- In 11 years, the value of one Bitcoin
went from 8 cents to $67,000.
If you know someone who bought a few Bitcoins
early in that journey and then sat on them for a few years,
they're probably pretty happy now,
more than a few got rich.
Others regretted selling way too early.
In reality, nobody could have foreseen
that type of appreciation.
A few bold speculators got really lucky.
Buying and keeping cryptos for a long period of time,
something we know now is hodling,
the word holding with a typo,
has resulted in some remarkable gains.
Equally though, outside of a few high performing crypto,
many hodlers are seeing no return
or even losing in their strategy.
Hodling is a popular investment strategy
for passive investors.
Hodlers are hoping that Bitcoin, Ethereum,
and others are going to appreciate to even greater heights
in the months and years ahead.
They have to be ready to ride the highs and the lows.
Given that volatility is an existing characteristic
of the crypto marketplace,
a hodler could see their investment drop by 25% or more
over the course of a day or two.
Equally on a good week, they could even see that level
of increase or even more.
Passive hodling is not the only investment strategy
for cryptocurrencies for those that have the time
and want to take some risks.
A more managed form of hodling is called position trading.
Like hodling, the investor chooses a crypto
that they anticipate will appreciate over time.
A future price is chosen at which each time,
when reached, will trigger a sale.
For example, through analysis, the investor may determine
that the crypto will at least double in price.
When that price is reached, a sale occurs.
Position trading uses a safeguard called stop loss order.
Instead of appreciating, if a crypto begins to fall,
once it hits a predetermined value,
it is placed for sale at the market price.
It's a mechanism to reduce the risk of position trading.
Overall, this strategy is longer term
and less risky than others.
The opposite to position trading,
in which trades are short term and higher risk,
is an approach called swing trading.
In this strategy, the investor makes several trades
in a variety of cryptos in short time periods.
These periods are often a little longer than day trades,
usually days to weeks.
Using a technique called leverage trading,
for example, spending $500 dollars
to buy $5,000 worth of crypto by borrowing
can reap quick swing trading profits.
It's highly risky since drops can occur high penalties
and it requires constant attention
and analysis of the market.
Another recently introduced investment opportunity
for cryptocurrency is an exchange-traded fund or ETF.
An ETF tracks the price of an asset or index,
a group of investments, and is traded on exchanges,
just like stocks.
An example of a crypto ETF is the ProShares Bitcoin ETF
with the ticker BITO.
And it is traded on the NYSE Arca
electronic securities exchange in the United States.
BITO tracks the value of Bitcoin
and investors can buy into them
without needing to own crypto
or having a crypto exchange account.
A crypto ETF is convenient and simple to invest in
but does require payments of management fees.
They also don't have any of the benefits
of owning the crypto directly,
such as anonymity, currency use, and for buying
and selling other cryptos.
A crypto ETF is convenient and simple to invest in
but does require payment of management fees.
They also don't have any of the benefits
of owning the crypto directly,
such as anonymity, currency use, and for buying
and selling other cryptos.
Other crypto ETFs are currently limited
as the U.S. Securities and Exchange Commission, the SCC,
blocks proposals in the absence
of sufficient investor protections and regulations.
This is highly likely to change in the future.
Crypto investors and other participants
can now take advantage of a crypto type called a stablecoin.
Unlike other cryptos that are not pegged
to any underlying asset and are highly volatile,
stablecoins have a reserve,
such as a fiat currency or gold available
that is equal to their value.
This makes their value predictable and removes fluctuations
while letting owners enjoy the crypto benefits,
such as peer-to-peer payments.
From investors, they can use stablecoins
to quickly trade in and out of other cryptos
without incurring the costs and overhead
of cashing out to fiat currencies.
Finally, crypto investors, now a growing number of tools
to help them with their decisions.
Similar to regular investor products
that provide details of companies, historical data,
and other trend information and insights,
market watching solutions such as CoinMarketCap,
Messari, and LunarCrush
provide an abundance of crypto intelligence.
Additional tools for trading, charting,
portfolio management, and rebalancing,
and notifications on upcoming opportunities
are all just a web search away.
Many offer free services with the option of premium add-ons.
If crypto investing is for you,
explore and navigate in an informed way.
The risks are high but so are the potential benefits.