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10 Smart Strategies for Crypto Investment

By Amelia Wong Published May 24, 2024
10 Smart Strategies for Crypto Investment

The world of cryptocurrency holds the promise of innovation and potentially life-changing profits. However, unlike traditional investments, managing a crypto investment can be a rollercoaster ride, especially when you are aiming for long-term crypto investment.

With its unpredictable price fluctuations, complex technology, and ever-changing rules, even experienced investors can feel lost. But do not worry!

This guide helps you to understand the 10 smart strategies in crypto investment. By following these principles, you will be investing in cryptocurrency with confidence, spot promising projects, protect your digital assets, and build a diverse portfolio that takes full advantage of cryptocurrency’s exciting potential.

10 Golden Rules of Crypto Investment

1. Do Your Research (DYOR)

The world of cryptocurrency is like the Wild West, full of exciting chances and possible problems. But you can’t just guess and hope to succeed like old-time prospectors. That’s where the golden rule of DYOR (Do Your Own Research) comes into investing in cryptocurrency.

Think of yourself as a detective, carefully checking clues before investing in cryptocurrency. Look closely at the project:

  • What does it do? Is it a new way to pay like Ethereum, a way to store stuff online like Filecoin, or something else?
  • How does it work? Understanding blockchain, the tech behind most cryptocurrencies, is important. You can find lots of info online or on sites like Coursera or Khan Academy.
  • Who is in charge? Are they experienced? Look for people with good reputations and a real passion for the project.
  • Check the project’s future plan. Read its whitepaper, which explains what it does and how it works. It’s like a guide for their cryptocurrency.

By acting like a detective and digging into a project’s details, you’ll be ready to make smart investment choices in the world of digital money.

Fun fact: Did you know we still don’t know who made Bitcoin? Their real identity is a mystery!

2. Invest What You Can Afford to Lose

Cryptocurrencies are still pretty new and can change in value a lot in just one day. Even though they have mostly gone up in value over time, some people still have doubts about them.

So, the first rule is to only invest money that you’re okay with losing if the crypto market goes down. You should have some extra money saved up before you put any money into crypto.

And when you do invest, do not put more than 5% of all your money into it. That way, you can still make money if the crypto does well, but if it goes down, it won’t hurt your overall savings too much.

3. Diversify Your Portfolio

Spreading your investments across different cryptocurrencies with different purposes helps lower the risk.

Crypto investment is like having a mix of stocks and bonds in a traditional investment portfolio. Think of it as building a strong and colorful investment basket – it can handle market changes, even if a few cryptos don’t do so well.

Here are some examples of different types of cryptocurrencies to consider for diversification:

  • Established giants: Bitcoin and Ethereum are the big names, like the reliable apples you know and love.
  • Rising stars: Newer projects with innovative ideas might offer higher growth potential, like that exotic dragonfruit.
  • Utility tokens: These tokens offer specific functionalities within a network, like a virtual “club card” with unique benefits.
Fun fact: Remember how Beanie Babies were big in the 1990s? Some became really valuable collectibles, while others ended up forgotten. Similarly, some cryptocurrencies might become super successful, while others might not. By spreading out your investments, you’re not relying on just one crypto to do well.

4. Set Clear Goals

Before you start investing in cryptocurrency, it’s crucial to know where you’re headed! Are you sprinting for short-term gains like a cheetah chasing its prey (think day trading)? Or are you in it for the long haul, like a marathon runner with a steady pace (holding onto your investments for the long term)?

Your goals will shape your investment strategy. Let’s break down these two approaches:

  • Short-Term Trading (Day Trading):

    Picture yourself as a day trader, seizing opportunities from small price movements during the day. This strategy demands thorough research, attention, and quick reactions. It’s like snagging quick deals in the stock market, but with higher potential rewards (and risks!) due to crypto’s volatile nature.

  • Long-Term Holding (HODLing):

    This method suits patient investors who believe in crypto’s future. You buy and hold your assets for a while, enduring market ups and downs with a big-picture perspective.

    It is akin to planting a seed – it takes time to grow, but patience can yield valuable results.

    Remember when people bought Bitcoin for pennies? Those who held onto their coins are now reaping the benefits of its soaring price.

Choosing Your Path:

There is no one-size-fits-all approach – it depends on your risk tolerance and financial goals.

Do you crave the adrenaline rush of short-term trading, or do you prefer a slower, steady journey towards long-term growth?

By setting clear goals from the start, you’ll be ready to navigate the thrilling yet unpredictable world of crypto investing!

5. Stay Informed

In the world of cryptocurrency, things move faster than a hamster on a wheel! Keeping up with news, trends, and market feelings is essential for anyone interested in crypto. The more you know about crypto, the better you’ll be at making smart choices.

Here’s how you can become a crypto news expert:

Follow trusted crypto news sources: Many websites and publications focus on crypto news. Stick with well-known platforms known for accurate and fair reporting.

  • Join online communities: Forums, social media groups, and chat platforms about crypto can give you valuable info and insights. Just be careful of random advice and always do your own research before investing.
  • Attend industry events: Conferences, meetups, and webinars let you hear from experts, connect with other investors, and stay on top of the latest trends.
  • Listen to crypto podcasts: Podcasts are a great way to learn about crypto while you’re on the move. Many reliable podcasts feature interviews with industry leaders and talk about current events.

Here are some examples of well-regarded crypto podcasts, categorized based on experience level:

Experience Level Podcast Description
For Beginners Coinbase Podcast Provides clear explanations of crypto basics and interviews with industry leaders.
  The Crypto for Beginners Podcast with Crypto Casey Offers a straightforward approach to understanding cryptocurrency concepts.
  Cryptocurrency for Lawyers Geared towards newcomers to crypto who want to understand the legal and regulatory landscape.
For Intermediate Investors The Pomp Podcast Features interviews with prominent figures in crypto, finance, and technology, hosted by Anthony Pompliano.
  Unchained Hosted by Laura Shin, this podcast provides in-depth analysis of current crypto events and trends.
  Bankless Focuses on the DeFi (Decentralized Finance) space and explores the future of crypto finance.
For Advanced Investors What Bitcoin Did Hosted by Peter McCormack, this podcast delves deep into the technical aspects of Bitcoin and its potential impact on society.
  a16z Podcast Explores the intersection of crypto and venture capital, featuring interviews with leading investors in the space.
  The Breakdown Hosted by Nathaniel Whittemore, this podcast offers a macroeconomics perspective on crypto and its role in the global financial system.


6. Choose Reliable Crypto Exchanges

Think of your crypto as a treasure chest brimming with digital gold. Just like you wouldn’t leave gold bars lying around, a crypto exchange acts as your digital fortress, where you buy, sell, and store your cryptocurrency securely. Picking the right exchange is crucial for safeguarding your wealth.

Here’s what to look for your crypto investment:

  • Reputation and Track Record: Opt for established platforms with a strong history of security and customer satisfaction.
  • Security Features: Prioritize exchanges with robust encryption, multi-factor authentication, and stringent security measures.
  • Regulation and Compliance: Choose exchanges operating in regulated environments, complying with AML and KYC regulations.
  • User Interface and Fees: Select a platform with a user-friendly interface and reasonable fees tailored to your needs.

7. Prioritize Security

Imagine fortifying your long-term crypto investment with top-notch security measures. Here’s how:

  • Strong Passwords: Use complex combinations of letters, numbers, and symbols to protect your accounts.
  • Two-Factor Authentication (2FA): Add an extra layer of security with a verification code sent to your phone.
  • Secure Wallets: Use software wallets from your exchange for daily transactions and hardware wallets for long-term storage.

8. Don’t FOMO or FUD

The crypto world can be an emotional rollercoaster. Avoid impulsive decisions driven by FOMO or panic-selling due to FUD.

  • Do Your Research (DYOR): Thoroughly research potential investments before making decisions.
  • Develop a Strategy: Create an investment plan aligned with your goals and risk tolerance.
  • Stick to Your Plan: Stay disciplined, even during market volatility.

9. Practice Risk Management

Crypto can be thrilling, but manage risks to protect your crypto investments:

  • Set Stop-Loss Orders: Automatically sell your crypto if prices drop below a certain point.
  • Understand Your Risk Tolerance: Assess how much volatility you’re comfortable with.
  • Diversify Your Portfolio: Spread investments across different cryptocurrencies to minimize risk.

10. Embrace a Long-Term Perspective

While short-term volatility is common, focus on projects with strong fundamentals for long-term growth. Imagine planting a crypto seed that may take time but could yield significant returns with patience.



In the realm of cryptocurrency investment, adhering to these 10 golden rules for crypto investment is essential for success. By following these guidelines, you’ll be prepared to capitalize on opportunities while mitigating risks effectively.

Long-term crypto investment is particularly crucial for sustained growth and stability. Remember, prudent decision-making and a well-thought-out investment strategy are paramount. Don’t hesitate to seek advice from a qualified financial advisor who can offer personalized guidance tailored to your specific financial objectives and risk tolerance.

With the right knowledge and approach, you can embark on your crypto investment journey confidently, knowing you’re equipped to make informed decisions and seize opportunities as they arise.


Frequently Asked Questions (FAQs)

I’m new to crypto. Where do I even begin?

When diving into cryptocurrency, your first step is selecting a broker or crypto exchange. An exchange serves as a digital platform for trading cryptocurrencies. Brokers utilize interfaces that connect with these exchanges. Opting for an exchange enables you to trade directly without involving a third party.

What are some red flags to watch out for in crypto projects?

Look out for any unrealistic promises and hype. In some cases, projects may resort to hype and exaggerated claims to lure in investors. Stay alert for these warning signs: Guaranteed or unrealistic returns: Pledges of assured profits or exceptionally high returns often indicate a scam or an unsustainable project.

How much money should I invest in crypto?

Experts suggest investing no more than 1% to 5% of your net worth to investments. When determining the portion of your portfolio to allocate to crypto, it’s vital to restrict your overall exposure. Remember never to invest more than you can comfortably afford to lose.

What is DeFi (decentralized finance) and should I invest in it?

Decentralized finance (DeFi) is an emerging financial technology that challenges the current centralized banking system. Some benefit investing in DeFi include high potential returns: DeFi, a fast-growing industry ripe for innovation, offers opportunities for significant investment gains.

Should I invest in Bitcoin or other cryptocurrencies?

Whether you’re purchasing ETFs or actual digital coins, investing in Bitcoin boils down to a personal choice. If you opt to invest, it’s wise to already possess a diversified portfolio containing assets such as index funds. Generally, it’s advisable not to allocate funds to speculative assets that you cannot afford to lose.

How can I stay informed about the crypto market?

Here are the top 12 crypto news sources:

  1. CoinDesk: Among the largest and most renowned crypto media platforms globally.
  2. UToday: A reputable source for crypto news.
  3. Decrypt: Established in 2018, it’s highly regarded for its trustworthy cryptocurrency coverage.
  4. Bankless: Offering valuable insights into the world of crypto.
  5. BeInCrypto: A reliable platform for crypto-related news.
  6. The Block: Known for its comprehensive coverage of the crypto industry.
  7. Bitcoin Magazine: A trusted source for Bitcoin and cryptocurrency news.
  8. Blockworks: Providing insightful analysis and news about cryptocurrencies.

When is the right time to buy or sell cryptocurrency?

Based on historical data, the best day of the week to buy cryptocurrency seems to be Tuesday, followed closely by Thursday and Saturday.there may be reduced prices and increased volatility, potentially opening up more opportunities for traders.


Disclaimer: The information presented in this article is intended to be solely educational and should not be interpreted as financial advice. Cryptocurrency is a highly volatile and speculative investment, with the potential for significant losses. The market itself is young and remains largely unregulated, increasing the risk of scams and fraud. Before making any investment decisions, consult with a qualified financial advisor who can assess your individual risk tolerance and financial goals to determine if cryptocurrency is a suitable investment for you.

Amelia Wong

Amelia, a UK-educated corporate finance analyst with over three years in SEO and finance blogging, excels in creating insightful financial...

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