How to Build a Long-Term Cryptocurrency Investment Plan?

The investment market has gone through a big revolution over the last years. There was a time when IPOs (Initial Public Offerings) and shares were the common choice for investment and then came a new player - cryptocurrency - in the market, which completely changed the options. Nowadays, people are choosing ICOs (Initial Coin Offerings) over IPOs for investments of any kind or amount, simply because an ICO can produce huge returns quickly. If you are considering ICO as your next investment option, make sure that you have a proper ICO investment strategy. In this article, you will learn to build a long-term crypto investment strategy that actually works.

Unlike IPOs, ICOs are not always backed by a trusted company or team. ICOs are riskier than IPOs because the investors and token-holders are not entitled to get any sharing in the company or the project. Still, they produce good returns and therefore, might make a good investment choice, only if you are careful enough. Here’s a strategy to help you through.

Cryptocurrency Investment Strategy

This strategy has been constructed after researching several crypto crowdsales and includes proven ways to avoid losing money and get the most out of your ICO investments. Let’s get started.

The First Rule of Investment

Any professional investor would always tell you the same thing - Do not ever invest an amount that you cannot live without. So, no matter how good a deal you are getting, you should not invest your savings or other living money in the crypto. Invest only what you can spare or manage to live without. That is the golden rule you should follow while investing in ICOs.

The Second Rule

Not many people will tell you this, but you should never invest until and unless you know everything there is to know about the particular project. This is even more crucial for ICO investments because this industry is known to be surrounded by fraudulent people, projects and companies. Do you ever give money on loan to someone you don’t know? Then, how can you invest money in a project that you don’t know everything about? Open your minds before you open your pockets to someone.

Keep your emotions in check

It is natural for investors to get beaten by their emotions and beliefs while investing. The markets are never the same. They keep changing and so should your decisions accordingly. But one should never make investment decisions under an emotion or sentiment. There will be situations when you can earn big money in a single play and your emotions will tell you to go get it. But you should make decisions with your mind and not with your heart. For example, it is not wise to invest in something that you don’t know much about or invest all your money in one coin sale. In short, you should keep the “you” out of your ICO investments.

Research before you invest in a project/company

Since ICOs are very unpredictable, professional investors recommend that one should invest in the company and the idea, and not in the ICO itself. What does it mean? Well, you clearly don’t know much about the ICO itself and there is usually no way to find out. But you can surely research enough information about the company and the team/developers behind the project and about the project itself to help you make a calculated decision. Here are a few things you can do:

• Check the company website for information about the project, the idea, the technology, the team, etc.
• Read the whitepaper to know more about the project. See if the whitepaper is professional and concise enough.
• Read about the project team, advisors and investors. Find out as much as you can about the team, their skills, technical knowledge and experiences, roles in the particular project, etc.
• Contact the individual team members to ask more questions, if possible
• Check out the social pages like Facebook, Twitter, Linkedin and Official Telegram of the company and the team members to check their credibility
• Does the project actually solve a real problem and how?
• Is there really a need for the blockchain?

Try to find answers to these questions before you invest in a particular crypto project.

Types of Cryptocurrencies

Before you invest, know about the various types of tokens so that you can make the right investment decision. A good idea is to create a balanced portfolio that combines multiple coins.

Transactional coins are the ones that are used for transaction purpose. For example, Bitcoin, which can be used for real transactions, trading and value exchange.

Utility Tokens are built upon existing blockchains with the purpose to provide back-up to a specific application, which performs a specific task. Medipedia.io is an example.

Asset-backed tokens are the most innovative. These cryptocurrencies are valued by an underlying asset such as bonds, gold or dollars. It gives a way to invest in assets through cryptocurrencies.

Platform coins stay associated with the underlying blockchain and allow developers to build applications on that blockchain. Based on the real-world applications of the platform, the coin can rise in value.

Security tokens are created only for investment and trading purposes. They are used for fundraising and can be sold back by the investors for a profit.

Now that you know about all types of tokens out there, you can start building your own balanced ICO investment portfolio based on the research you conducted.

A few other tips

If you are still confused about ICO investments, here are some tips that can make the process easier for you.

• Make sure to evaluate your investment portfolio at least once every week.
• Use a portfolio tracking app to manage and keep track of your ICO investments.
• Decide on a buy-hold-profit-sell strategy before you invest. This will include things like when will you sell how many tokens and for how much profit.
• Calculate your profits in terms of Bitcoin, as it is the most commonly transacted cryptocurrency out there.
• Buy tokens in parts rather than going all in at once. Crypto market is highly volatile and so it is best to keep your options open.
• Always get involved in an ICO at the very first stage (presale or private sale) to enjoy early-investor discounts and bonus. Avoid buying at market prices, at any cost.
• Re-evaluate and re-balance your portfolio, if necessary, over time in order to maintain the profit balance.
• Holding is good but do not hesitate to sell if you are making a huge profit.

Follow these tips in order to strengthen your ICO investment portfolio. Whatever you do, do not hesitate to buy/sell/hold when the time seems right. If a coin is going up for some time now, there is a high chance that it will go down soon. Buy when you are making a profit and hold when you are in safe status. Be very aware of the fraudulent ICO and crypto projects. Always invest in the right thing.

Looking for a reliable ICO to invest? Check out Medipedia.io - a blockchain-based healthcare service platform supported by an innovative cryptocurrency (MEP Token) for payments.