There are several crypto investing strategies that could be broken down into passive holding, active trading, and portfolio investing.
The easiest and the most common way to invest in crypto is to simply buy and hold (or ‘hodl’ in crypto parlance). In that case, the source of returns is the long-term price appreciation of a cryptocurrency (or the whole crypto market) as more investors enter the market and adoption grows.
The alternative way to invest in crypto is to actively trade crypto, taking advantage of short-term and medium-term volatility. It’s not uncommon for the Bitcoin price to surge or fall by 10% in a day. Smaller cryptocurrencies are even more volatile. Traders watch volatility, price momentum and reversals to maximize the chances of buying low and selling high. This could be done manually but the sheer size of the crypto market and its 24/7 nature give crypto trading bots a great advantage.
Another crypto investing strategy is based on building a portfolio of smaller crypto assets (the so-called altcoins) that have the potential for higher returns than Bitcoin and ETH. Of course, these assets are even riskier and might go to zero. That’s why investors built a diversified portfolio: while some assets may become worthless, a handful of stars can outperform, beating Bitcoin on average.
Stoic is crypto investing app that combines the portfolio approach to cryptocurrency investing with momentum-based automated crypto investing.