Cryptocurrency is a potent and powerful tool in the money making market. In spite of how long Bitcoin and other cryptocurrencies have been in the marke, to this day many people are quite skeptical about investing due to the large amount of risks involved. Investing in this field is surrounded by lots of panic – and excitement as well. It is not uncommon to see a token’s value rise or fall overnight, but the prediction of such behavior isn’t quantifiable. Thus, there are different investment styles employed by those in the market. Some favor a long-term investment, while others hop in the market just to day trade. To better understand the key players in the market, here are some investor profiles with distinct approaches to investing their money in the digital currency market.
Technical investors are those who make a proper analysis before investing in cryptocurrency. Before investing any capital, they analyze the token or company by taking into consideration of all the limitations and options available. They try to figure out the pros and cons, trends, key factors – everything that an investor should know and then proceed with making a purchase decision.
They analyze current trends as well as previous patterns in the cryptocurrency market to determine when to buy and sell. Technical analysis is rooted in Dows Theory, which studies the trend of money movement very closely. Such investors put a lot of stress on examination of common trends – a really challenging task. These investors also keep a close watch on candlesticks patterns, as they tend to say a lot about the market on their own. Their patterns are one of the most trusted sources when trying to predict market movements, with success rates ranging from 65-96%. The value of “sell walls” is also something that they take into consideration.
Long-term investors, those who wish to invest in cryptocurrencies for longer periods of time, always remember to keep an eye on market cap instead of maintaining focus on a coin’s price. The reason for this is that market cap is more informative on the lines of price and purchase decisions. Needless to say, such investors have a great deal of patience, and even when the value of a coin goes down, they never “panic sell”. They believe that in the crypto market, money often finds its way from the hands of from an impatient man into those of a man with patience.
Long-term investors always look for the fundamentals. They always look for the aim and purpose of a coin and its company. The nature and background of the people involved in the project is also a deciding factor. Only if a thoroughly vetted coin meets all of these criteria will they give it a shot. Apart from patience, long-term investors are always cautious regarding market diversifications, and tend to invest in real coins that have practical implementations and chances of mass adoption.
It is said that day traders are not loyal to anyone. These kinds of investors keep vigilant watch on prevailing market patterns, recent news, and speculations. They invest in a particular token for a day or so, and once they’ve achieve their desired profit they dump the token and move on. In a way, they are the complete opposite of long-term traders.
However, despite their perceived disloyalty they may return to a coin if it keeps offering short-term benefits. They usually buy at dips and sell off their assets when they reach 24 hour price highs. Even though this style of investing may seem like a quick money making technique, the risks involved are quite high. As it is said, “with great risk, comes great profits”.
High Gut Investors
These types of investors invest their money in the crypto market by simply trusting their gut feeling. They don’t stress about proper analysis or fundamentals – they trade based solely on how they feel about a coin. This feeling can be influenced by many factors, like how people are responding to coin’s name and how popular it is.
They put in unreasonably high selling bids for their tokens which sometimes happen to work out for them. In a way, they don’t invest – they gamble. For them, gaining profits is just equivalent to the wisdom they are in possession of. They don’t have any specific investment plan in terms of holding assets. It can be either for a long-term or for a short term. Perhaps these were the types of investors to enter the crypto market – who would have given a thought in late 2008 to invest $100 in Bitcoins? These purchases were made solely on gut feeling.
Cryptocurrencies have been a hot topic on the global platform lately, and there is no doubt that they are here to stay. Thus, many people are taking an interest in investing in blockchain technology and the crypto market as a whole, which is indeed a powerful tool that can be used to earn massive profits. Investment returns vary from person to person, and different people have different decision-making instincts and plans. They may have short-term, long-term, or any number of other kinds of investment plans mentioned in this article. Recognizing these investment profiles, finding out which best suits you, and knowing who else is in the market will only make you a better and more profitably investor, and in the blossoming world of crypto you need all the help you can get.
Join our community on Telegram
Learn How To Build Wealth With Crypto. Get Started Now.