There are certain investment methods that can help you become yield profits, says Posty who shares his viewpoints on the subject.
Cryptocurrencies have undoubtedly been among the best performing asset classes in 2021 as global investors barged into the crypto market trying to capitalize on the digital investments’ growth that has shown tremendous future potential. However, cryptocurrencies are inherently risk assets that are prone to be volatile, and investors need to consider this if they want to be profitable investors in these emerging asset classes. “Investing in cryptocurrencies is not at all different from investing in traditional assets like stocks and bonds. The fundamental investment strategies are the same, but you need to keep in mind some important points while managing your crypto investments,” says Posty XBT, who is an expert trader, investor and content creator who spread his knowledge about the space through his Twitter@postyxbt.
One of the foremost things one should keep in mind is choosing the right mix of storage, as this is the right method to keep your cryptocurrency safe. Digital assets are either held in hot or cold storage. Hot storage comprises of online digital wallet, and cold is an offline wallet, which is generally stored on a hard drive. According to Posty XBT it is preferable to store the majority of your cryptocurrency in a cold wallet to prevent hacking, and at the same time some can be kept in a hot wallet online for easy movements of positions. The best strategy according to this crypto expert is to hold 80% of long-term funds inside a cold wallet. The hot wallet comes in handy for short-term movements.
Investors should also focus on the liquidity factor, as it stands as an important metric when deciding on how to invest in the crypto market. In this fast moving market, investors need to move in and out of positions as fast as they can. No one wants to get hold of an asset which cannot be sold when the need arises, so it’s extremely significant to choose those which bear high liquidity. While measuring liquidity, one can look at the recent trading volume of a crypto asset as its trading volume indicates how much cryptocurrency has been bought and sold, indicating the overall interest in the asset. This is an essential factor while selecting a crypto asset which works well during your trading journey.