The Bitcoin market has been one of the fastest growing markets from the pandemic to the present.
In this sense, more and more people decide to start investing in different virtual currencies by opening an account in an exchange or in a virtual wallet.
Before starting to invest, it is essential that we understand what type of strategy we will use, what type of return we are looking for and carefully analyze the different options that the virtual currency market offers us.
Define the investment strategy
The first step that we must carry out before starting to invest in the virtual currency market will be to define the investment strategy that we will use when analyzing the type of return and investment that we want.
We must define if we are looking for an investment with high returns and high levels of volatility or on the contrary if we want to make an investment with stable returns and low levels of volatility.
After having defined the risk level of the investment, we must define the type of investment that we want to make in relation to the time of return or profit.
We can understand that the investments could be carried out with a view to a return in the long term or on the contrary in the short term.
Analyze the asset type
After we define the type of return, investment risk and term, we must analyze the different types of assets that the market offers us.
The virtual currency market has various investment possibilities and different assets.
Depending on the type of investment that we have decided in the previous step, we can invest in a stable currency or in a value asset.
The well-known stable currencies such as Tether usually have low or zero levels of volatility when backed by a real asset such as the dollar or gold, among others.
If the investor wants to make a long-term investment with low levels of volatility, stablecoins will be the right choice.
If, on the other hand, the investor wishes to make an investment with a high return and a high level of risk, value coins will be the correct options.
Bitcoin is the main currency of value and best known in the virtual currency market, it will be an ideal investment option if the investor seeks profits with high levels of volatility in the short term.
Analyze the whitepaper and project behind
Serious virtual currencies usually have serious projects behind them, and serious projects usually have consolidated teams.
Before investing in a virtual currency, we must study who is behind the virtual currency project.
The Whitepaper can be of great help to understand the main characteristics of virtual currency and how it adds value to society.
What do the experts think?
Jeronimo Ferrer, Business Development Manager Paxful, says “Bitcoin is one of the main virtual currencies within the virtual currency market. Before starting to invest, it is very important that people understand what type of action they are carrying out, and be able to make the investment in a concise, safe and effective way”
Marcos Bravo Catalan, Founder Beps Global Consultores, says “We can find various possibilities when starting to invest. It is of vital importance that the investor understands the risks involved in making an investment before investing his money. Within the virtual currency markets, whitepapers are essential to make a good investment”
THE VALUE OF DIGITAL ASSETS CAN GO DOWN AS WELL AS UP AND THERE MAY BE A SUBSTANTIAL RISK THAT YOU COULD LOSE MONEY BUYING, SELLING, HOLDING OR INVESTING IN DIGITAL ASSETS. YOU SHOULD CAREFULLY CONSIDER WHETHER TRADING OR HOLDING DIGITAL ASSETS IS RIGHT FOR YOU IN LIGHT OF YOUR FINANCIAL CONDITION.