The world of cryptocurrencies is one of the most thrilling spaces in terms of investing and trading. However, it can be challenging to pick favorites from the countless options, so in this article, we’ll outline a few top steps that should make it easier to choose which cryptocurrencies to invest in.
Before jumping into this incredible world, we highly encourage everyone to learn about cryptocurrencies. Needless to say, you don’t need to become an expert in the field to start investing, but knowing the basics can come in handy when dealing with your investments further down your journey. To get started, explore Rain’s blog, where we share all the insights and fundamentals you should know in a simple and easy-to-digest way.
If you’re already aware of the basics, or would like to jump straight to investing, here are the key points you should be aware of when picking your next cryptocurrency investment.
Aim to establish a target that is Specific, Measurable, Achievable, Rational, and Time-bound (SMART). Specific could mean how much you’d like to gain, and Measurable can indicate how to secure those profits. Achievable and Rational mean is your goal something that can be reached with the available resources, and Time-bound refers to when you need to complete your task.
Some of us are risk-tolerant, others are more risk-averse, but there are fitting cryptocurrencies for both types. To efficiently determine your own risk appetite, ask yourself the question: “What percentage of my total investment do I want to gain in a day?” If the answer is more than 20%, you’re likely a risk-tolerant investor. If it’s less than 10%, you’re probably more risk-averse.
Once you’ve set a goal and got an idea about your risk preferences, try to look at past 180 days of price development of cryptocurrencies. Start from high market cap cryptos like Bitcoin (BTC) and move towards lower cap ones through Ethereum (ETH), XRP, and so on. Once you noted the change in their valuation, compare the percentage points to your goal, and see which ones are the closest. Also, consider your risk appetite in the process.
Now that you’ve located the cryptocurrencies that performed the closest to your goal, it’s time to learn about them. You could skip this step, however, seeing whether you believe in the project’s vision and longevity is usually an advised step. Some of the easiest ways to do so is visiting our blog, or the token’s official website, where everything investors should know is showcased. As an example, ethereum.org is Ethereum’s official page.
There you have it, the top steps to take before choosing which cryptocurrency to invest in. With this systematic approach, you could maximize the efficiency of your selection process, and potentially increase your chances of picking the crypto tokens that fit your needs the most. Remember, there could be more assets that fit your criteria, in which case you could split your total available funds between them to diversify your portfolio. In any case, take action today, and visit Rain to trade crypto the simplest way possible.
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