Few Tips To Manage Your Crypto Portfolio For The Long Term

Few Tips To Manage Your Crypto Portfolio For The Long Term

There are many things to consider when looking to invest in cryptocurrency. New investors have the hardest time deciding which coins to invest in, the best strategies to invest with, how to avoid getting scammed and a myriad other factors. In order to better prepare yourself for your next investment, it is imperative to understand the dynamics at play in the cryptocurrency market. By understanding what to invest in, how to identify a good coin, how to avoid a scam and how to manage your crypto portfolio for the long term you will be able to make better informed decisions and substantially increase your profit.

1) Always do your own research: 

Researching a coin before making an investment is one of the most important factors for a successful investment. Researching the team, the product, the use cases and the market cap are just a few of the things you should always do before investing in a coin. You should do research for each coin you have your eyes on and be able to explain why you think it could be a good investment. You should be able to explain what makes the coin unique and convince a potential investor why this particular coin is worth investing in. The crypto tax season is upon us and it is important to always understand how the tax laws in your country affect your crypto investments. 

2) Know your risk tolerance: 

Before you invest in a coin you should be able to quickly and confidently tell what your risk tolerance is. Risk is the inherent volatility or price fluctuation of a particular investment. It can be measured as the standard deviation of returns on an investment. The greater the risk on a particular investment the less you should invest in that investment. You should make yourself aware of how much you can invest, in order to make sure that you can stand the long term volatility of an investment. You should be able to explain how to take the risk off your investment over time, by buying more coins and diversifying into other coins and assets.

3) Understand how supply and demand works: 

Cryptocurrency markets are very volatile, this means if the price of a particular coin goes up it will most likely go up a great deal within a short period of time. This can create huge profits for those who understand how supply and demand works. If the price goes down, it will likely continue to drop at least in part, over time until it bottoms out. Think about what happens when you buy items in bulk versus buying them individually or all at once and you will be able to understand how this works. When the price of a particular coin is high it will be in demand by many investors, because they want to buy into the hype and make a profit. 

Binocs is a Crypto tax and portfolio management software which simplifies your crypto investments and helps you manage your portfolio. It is a great tool to help you find the best coins to invest in, how to diversify your portfolio, and it has a built-in tax tracker.