An Investor’s Guide to Developing a Cryptocurrency Strategy

Investors, buckle your seatbelts. Investing in stocks and startups may no longer be the most successful investment strategy. With the cryptocurrency market already at a staggering $3 trillion, you need a cryptocurrency trading strategy.

However, cryptocurrency is nothing like Forex trading or stocks. These digital currencies require you to rethink everything you know about investing. It’s like a hybrid of day trading and stock dividends mixed into one.

We don’t want you to lose it all because you don’t know what you’re doing. That’s why we’re here to give you a crash course.

Keep reading as we discuss what you need for your cryptocurrency buying strategy.

Before Building Your Cryptocurrency Trading Strategy, What Makes Cryptocurrency Unique?

As we said, cryptocurrency is unlike anything the human race has seen before. It’s a decentralized, digital currency that makes use of blockchain technology. It’s thanks to this technology that cryptocurrency is anonymous and free from the control of governments and financial institutions.

These benefits come with caveats, though. Cryptocurrency has its own drawbacks. Let’s discuss some of them here.


Cryptocurrency is volatile. Not in the sense that it is explosive or dangerous. Rather, it fluctuates wildly.

The price of any given coin changes far faster than any fiat currency. In a single day, it can gain and lose thousands of dollars worth. In just a few weeks or months, it can quadruple its value–or lose just as much.

If you are coming from fiat currency, you need to change your assumptions. Fiat currency can remain stable for years. The dollar may only decrease in value by a few percentage points in a given year, but not cryptocurrency.

New Coins 

Also unlike fiat currency, anyone can create a cryptocurrency. A perfect example of this is DogeCoin.

Dogecoin began as a joke. It was a cryptocurrency based on a popular meme. But in a very short time, it grew to be one of the most valuable cryptocurrencies in the world.

There are thousands and thousands of cryptocurrencies, far more than there are fiat currencies. Anyone can make a new cryptocurrency at any time. Not all of them are successful, but the ones that are break all records.

The best cryptocurrency investment strategy takes into account any new coins that may arise. Having a Bitcoin strategy alone is not enough.

Gas Fees

Blockchain technology is, by design, decentralized and anonymous. No government or financial institution can sway its function. But in order to remain this way, it needs people to maintain it.

Cryptocurrency makes use of crypto miners. These are individuals or collectives that volunteer their computer hardware. Their computer hardware maintains the blockchains ledger, which in layman’s terms means they process transactions.

Of course, this is not free. The miners do this work with the hope of obtaining Bitcoin for their efforts. The only way for them to receive Bitcoin is for its users to pay a transaction fee.

Any time you use cryptocurrency, you must pay for “gas.” These are any associated fees with purchasing, transferring, or selling cryptocurrency. There is no way to get around these fees.

Your cryptocurrency strategy needs to take into account the cost of trading.

How to Build Your Cryptocurrency Trading Strategy

Now that we have established brass tacks, let’s discuss how to build the best cryptocurrency investment strategy. Follow along as we give you valuable tips when creating the strategy.

Protect Your Wallet with Your Life

A cryptocurrency wallet is like a bank account. But unlike a bank account, you do not store it on some bank’s secure server. Instead, its security is entirely up to you.

Make sure to store your wallet in an encrypted format. Secure your password and do not share it with anyone. Keep a physical copy of not only your password, but your seed phrase as well.

Store all of this in a secure physical location, such as a safe. Once someone gains access to your wallet, there is no way to get it back.

Avoid Scammers

Crypto scammers are rampant in the crypto sphere. They are quite sneaky. To date, crypto scammers have swindled thousands of people.

Use common sense and avoid any deal that seems too good to be true. Most crypto scammers will try to gain your confidence before pulling a fast one on you.

A common crypto scam is a pump-and-dump. Scammers will convince you to invest in a novel cryptocurrency. They’ll get you to believe that this is going to be the next Dogecoin, and you’d be a fool not to invest.

Once you and others buy into this coin, the original investors sell all their coin at its peak. Since they pre-mined the majority of the coin, they make the most money. Then they leave you with nothing.

Get Insurance

You should absolutely work with only the best cryptocurrency exchanges. Many of them use high-security features, such as cold storage. However, you shouldn’t place all of your trust in them.

Get insurance before you trade. It’s costly, and will eat into your investment budget. But it will be well worth it in case your exchange goes belly up.

Stay Involved in the Crypto Sphere

Cryptocurrency is a rapidly evolving technology. Things are changing sometimes on a daily basis. If you don’t keep up with the latest news, you risk being left behind.

Stay on top of all the most important cryptocurrency news. You’ll be happy you did later.

Make Your Cryptocurrency Investment Strategy Today

Before you invest in the blockchain, you need a solid cryptocurrency trading strategy. Cryptocurrency is something of a Wild West right now. Keep the above tips in mind so you can keep your wallet secure and avoid scammers.

Follow our blog for more cryptocurrency discussions.

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