Investing in Cryptocurrencies: Strategies and Risks Involved

Cryptocurrencies have become a topic that is widely discussed, even by teenagers. It seems that with time, they will change payments as we know them and completely sideline fiat currency. 

They serve multiple purposes, and their applications will grow in time. That being said, savvy investors are quick to rush in and join in on the fun as these digital dual asset investments offer significant profit potential.

But where there’s profit involved, there’s also a risk of loss, and the crypto world is not short of it. This is why you need to prepare a solid strategy before venturing into the crypto market, and we will help you with just that.

The Big-Name Crypto Currencies

Cryptocurrencies have gone mainstream, with Bitcoin and Ethereum being the most popular of the bunch. These cryptocurrencies have gained tremendous popularity in recent years due to their decentralization and fast transaction speed. In addition to that, they are incredibly popular due to the fact that all traders can make transactions privately across the whole globe.

Bitcoin was developed back in 2009 and has become synonymous with cryptocurrency ever since. It remains the world’s premier digital currency, despite the presence of Ethereum. Ethereum went live in 2015 and has seen substantial growth thanks to its open-source blockchain technology platform and smart contracts.

Both cryptocurrencies can be found on all major cryptocurrency exchanges. However, if you do decide to invest in crypto, find the most reputable one where you can easily trade and preview the latest crypto news.  Also, when choosing a crypto exchange to trade on, it’s important to consider whether it is an OTC crypto exchange, which can offer more privacy and liquidity for larger trades.

The Risk of Investing in Crypto

Investing in cryptocurrencies can be a risky endeavor. The volatile nature of these digital assets means that prices can swing drastically in a short amount of time. In addition, market manipulation from large investments and vulnerable dynamics from small investors can cause further fluctuations in the value of cryptocurrencies.

You should also be aware that cryptocurrency investments are not backed by any government or central bank and are unregulated, meaning there may be no recourse for recovering lost funds if something were to go wrong. Crypto investors must be willing to take on potentially high levels of risk before getting involved.


Crypto Trading Strategies

Since crypto trading can be a highly rewarding experience but also carries with it certain risks, you have to find a strategy to navigate through the crypto market effectively. To minimize risk and keep your portfolios safe, there are certain strategies you should consider. 

One is to start slow and take the time to build up knowledge through online resources, books, forums, and more. Additionally, having diversified portfolios across multiple cryptocurrencies can help reduce the risk of losses in one sector while spreading out the potential for profits.

Furthermore, monitoring market prices closely and regularly using technical analysis can enable savvy investors to make well-informed decisions about when to buy or sell. Ultimately, by following these key strategies it’s possible to reduce the risks involved when engaging in cryptocurrency trading so you can enjoy the rewards without sacrificing safety.

There are other strategies crypto traders use, and those are: 

Fibonacci Retracements

Fibonacci retracements can be a valuable tool for crypto traders looking to limit their risk. This technique utilizes Fibonacci ratios to identify areas of support and resistance during an uptrend or downtrend. By using Fibonacci levels, traders can detect potential entry and exit points in the market with greater accuracy. 


Scalping trading in cryptocurrency is an approach that involves attempting to make numerous small profits on short-term trades. It is typically done by taking advantage of market fluctuations and attempting to buy and sell quickly in order to capitalize on the changing prices. Scalping requires close monitoring of the market as well as an understanding of how to identify potential opportunities for profitable trades. 

As a scalper trader, you must be prepared to take quick action when necessary and accept losses if a trade does not turn out as planned. With its high risk/reward ratio, scalping trading can be a great way for investors to make a profit from cryptocurrency markets.

Bottom Line

Investing in crypto can be incredibly rewarding, but it can also bring certain risks if you are not aware of some trading methods and strategies. Implement both Fibonacci retracements and scalping in your trading method strategy to gain an advantage when entering the crypto market.

Other than that, pay attention to the application of the cryptocurrency you are interested in. The more use cases, the more potential for soaring in price it has.