Invest, Hold, Protect: Tips and Tricks for Maximizing Returns on Crypto Assets

In the ever-changing world of finance, the crypto asset class has emerged as a promising investment vehicle. However, navigating the volatile crypto market requires careful thought and strategic planning. This can be simplified if investors define a strategy and execute it without worrying about daily market volatility.

In this article, we aim to provide you with valuable tips to safely maximize returns on your crypto investments. We have structured it into three main categories: invest, hold and protect.

Investing in Crypto

Set clear investment goals

Setting clear investment goals is essential for success. Determine your risk tolerance, investment time horizon and desired returns. Crypto investments can be successful in the long run, so align your investment strategy accordingly. Setting realistic goals and reviewing them regularly will help you stay focused and realize value over time.

Embrace Diversification

One of the key principles of successful investing is diversification across different asset classes to minimize risk. Crypto is volatile and a higher beta asset – so it should hold a minimum share of your overall wealth portfolio (we suggest 2-5%). Within crypto, park a majority with the blue chips – Bitcoin and Ethereum – as they offer good returns with lower risk in longer timeframes.

Conduct in-depth research

Before investing in any crypto asset, spend time analyzing the fundamentals, scalability, technological innovations, development team, market demand, and competitive landscape of the project. Read white papers, explore online communities, and stay informed with the latest news and updates.

Average cost of your purchases

Market timing is difficult, even for experienced investors. Averaging costs by scheduling your purchases at regular intervals helps you invest with peace of mind. This approach helps to mitigate the impact of short-term price fluctuations and is particularly valid in 2023.

hold on patiently

Play the waiting game, emotionally

Once you’ve built a portfolio, give it time to grow. It is a multi-year effort and can be emotionally taxing at times. Avoid acting hastily – avoid checking your portfolio regularly.

Take profits on targets

Make sure that each of your investments has a target price. Feel free to take profits once these goals are achieved. This helps ensure gains even in a volatile market.

Adopt a mindset of long-term investing and wealth creation

Avoid frequent trading – it doesn’t help from a tax point of view either, given the 1% TDS on sales in India. Stay attached to your wallet.

Safeguarding investments

Trade in Recognized Indian Exchanges

Since global exchanges do not comply with Indian government requirements for KYC or TDS deduction, it is prudent to place all your trades on compliant Indian exchanges. It will also make it easier to keep track of all your investments and calculate your tax liability when you make a profit. This is relevant, especially since many scams have thrived in P2P trading done on some global exchanges – customers have had their bank accounts frozen as a result.

Get custody of your funds or park with a recognized Indian exchange

Crypto allows you to keep your funds in a personal (hardware) wallet that is not dependent on any third party. However, if you find it convenient, hold the assets in Indian exchanges with sufficient insurance coverage for user funds.

Be vigilant about scams

Always be on the lookout for offers that are “too good to be true”. Protect your OTP mechanisms and back up your profiles. Pay attention to every permission you give for your (software-based) wallets when interacting with DeFi protocols. There are many scams going on that can harm your hard-earned gains.

In conclusion, maximizing crypto investments requires a holistic approach to personal finance and investment planning. By following key principles, individuals can optimize their investment strategy and mitigate risk.

(The author is the CEO of crypto platform Giottos)

Disclaimer: The opinions, beliefs and views expressed by the various authors and forum participants on this website are personal and do not reflect the opinions, beliefs and views of ABP Network Pvt. Crypto products and NFTs are unregulated and can be very risky. There may be no regulatory recourse for any loss arising from such transactions. Cryptocurrency is not legal tender and is subject to market risk. Readers are advised to seek expert advice and carefully read the offering document(s) and important related material on the subject before making any type of investment. Cryptocurrency market predictions are speculative and any investment made will be at the sole cost and risk of the readers.