2021 is touted to be the year that we finally see another 2017-style bull market, as the latest Bitcoin halving event takes full effect.
Anthony Pompliano, PlanB, CZ, and Arthur Hayes, are among the big household names in the industry that have predicted Bitcoin’s price will break it’s all-time high by the end of next year. Some even forecast it could surge as high as $100,000 per coin.
There is always money to be made in crypto, and next year could be the most lucrative time ever. So before that happens, you need to make sure you are ready to make the most of this potentially life changing opportunity.
If you’ve flitted around on crypto social media for any length of time, you will have undoubtedly come across the term “HODL’ing”.
Adjective: The colloquial abbreviation of “hold on for dear life”. When an investor buys a crypto-asset and doesn’t sell, no matter how traumatic things get. “If only I’d have HODL’ed Bitcoin back when it was $10”.
HODL’ing is not just a quirky term thrown around the crypto community, it does actually have merit as a legitimate trading strategy. Investing into any type of volatile asset and holding it for a long period of time is more commonly known as ‘position trading.’
The strategy is incredibly simple. First, follow Warren Buffett’s golden trading rule and only buy when there’s blood on the streets. A good indicator of this in the crypto industry is when Peter Schiff posts something smug on Twitter about Bitcoin going to zero. Wait until the market has fallen considerably and then take a position. And then wait.
Chances are that prices will eventually retrace to their former highs and could potentially go on to set new highs. All you have to do is sit back and wait for that to happen. No bot needed, no expensive trading group required, no sleepless nights staring at trading charts. Seriously, what could be easier?
Dollar Cost Averaging might sound technical but it’s actually another very simple, and very effective, way of making solid investment returns over a long period of time.
DCA involves investing a set amount of money into a specific asset on a consistent basis. For example, buying $100 of Bitcoin (BTC) on the first day of every month.
The idea behind this is that over time the average price you pay per Bitcoin should work out lower than if you bought in all at once at a single price. Again, to get the best possible start with the DCA strategy, wait until there’s a significant crash in the market. January, March, and August generally tend to be the worst performing months for the crypto market, but sometimes the bears are a little late to the party.
The great thing about Dollar Cost Averaging is that it works out even better in extended bear markets. Take 2018, for example. Whilst a vast majority of crypto traders were watching their crypto gains dissolve away, you could’ve been consistently buying Bitcoin at record low prices - or any other crypto for that matter!
Another great thing about the DCA strategy is that it can be automated, so you don’t have to set reminders to buy Bitcoin all the time. This completely removes the emotion from trading and allows you to customize exactly when you want to place your trades.
Ok so this isn’t necessarily a trading strategy, but it’s definitely one of the most efficient ways for a beginner to make consistent gains - provided they back the right trader.
For those of you unfamiliar with copy trading, it’s literally exactly what it sounds like. You copy the trades of professional traders.
Platforms like eToro offer an automated copy trading service so you don’t even have to be near your computer. All you have to do is look at the previous performance of a wide range of professional traders and choose the person you feel will generate the best returns. Then, whenever that trader places a buy or sell order, a trading bot automatically executes the same trade on your account.
And because platforms like eToro actually incentivise professional traders to allow other traders to copy them, their customers don’t actually have to pay anything for the privilege! Win win.
If you found the content in this article helpful, and would like to learn more about useful trading strategies, tools, and professional insights in the crypto market, then make sure you book a space at our LeverageConf!
Whether you're a crypto trading OG with years of experience behind the charts, or a complete newcomer to the market who has just bought BTC for the first time with a stimulus check, - (Cheers Trump!) - there are certain bad habits that almost every trader will get into at some stage.