Now is a great time to invest in and hold onto cryptocurrency. The key is to select quality digital assets with real-world use cases, as these have a higher chance of long-term success. When in doubt, HODL (or “hold on” as some people say). With the current market volatility and 25% daily fluctuations, it may be best to retain your coins.
This is especially true if you have only invested a small amount and can withstand short-term changes, as you believe that one or more of the cryptos are here to stay and will become an integral part of the financial system. Part of learning when to sell or HODL is understanding that having all your Bitcoins isn't always the best idea. Volatility makes it likely that you will experience extreme highs and lows. Holding some or selling some allows you to hedge your bets against both.
Whether you decide to sell your cryptocurrency or view a dip as an opportunity to buy more, you need to act with a level head. Making emotional decisions, especially when trading, rarely ends well. So, before you jump into the market in a panic, take a moment to reflect on why you're trading cryptocurrency in the first place. Cryptocurrency markets are notoriously volatile, and the price you pay today for an item may not be worth your purchase tomorrow.
In addition, many companies that are experimenting with crypto payments only accept Bitcoin, which experts say is one of the worst cryptos you can choose to pay for something. You can set up a daily or monthly program if that works for you and, through major crypto brokers, you can easily implement this recurring investment approach for whatever currency they offer. Whenever you invest in a cryptocurrency, make sure that you have thoroughly researched it and believe that it is a solid long-term investment. Despite the fact that most buyers view cryptos as an investment, many don't use the best investment strategy.
If you have made a decent profit, i.e., tripled or quadrupled your initial investment based on the latest prices given the recent volatility, many personal finance experts say it may be a good time to sell an amount equal to the original investment up to 50% of your shares. For example, unbanked people can transfer money to other people, even internationally, using their crypto wallets or make crypto purchases with participating merchants through applications such as BitPay, all without resorting to traditional financial institutions. A smart rule of thumb is to have no more than 5% to 10% of your investment portfolio in the crypto market. Cryptocurrencies are on the rise, and a study by The Ascent reveals that more than 50 million Americans are likely to buy crypto next year.
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