Cryptocurrencies like Bitcoin (BTC) are becoming increasingly popular, but some investors may still be unsure if they should invest in them.

Individual and institutional investors have differing views on cryptocurrencies, but one thing is clear: crypto assets are in high demand and are closely linked to the performance of mainstream indices. The overall crypto market share of Bitcoin alone is around 43%, making it the most well-known and widely owned cryptocurrency, but the crypto universe is enormous. 

Global cryptocurrency market capitalization currently stands at $1.9 trillion, with over 17,900 coins accessible for trading. According to the World Economic Forum, cryptocurrency’s market capitalization surged by 187.5 percent in 2021 alone.

The price of Bitcoin has fallen approximately 11 percent this year, while several other cryptocurrencies have outperformed the market. Altcoins like Terra (LUNA) and Solana (SOL) have seen price increases of more than 600% and 1,600% over the past year.

With all these numbers alone, I’m sure you’re getting more and more curious as to how you can start investing in the cryptocurrency market. While we also have the complete Cryptocurrency PlayBook here at InvestingBosses, which we suggest you check if you wanna start from zero, this article will solely focus on the ultimate GAME PLAN to manage your cryptocurrency investment

Let’s get started!

• Plan out your storage needs.
• Focus on cash flow.
• Embrace volatility.
• Invest as much as you’re able to.
• Take advantage of gains regularly.
• Diversify.
• Dollar-cost Averaging

Plan Out Your Storage Needs

The first thing on your game plan of managing your cryptocurrency is choosing the right storage mix. There are several ways to keep your cryptocurrency safe. When it comes to storing cryptocurrency, there are two types of wallets: one that can be used online and one that can be stored on a computer’s hard drive. 

In order to protect your cryptocurrency, experts recommend that you put the majority of it in a “cold wallet.” Having some cryptocurrency in a hot wallet online makes it easy for crypto traders to enter and exit positions quickly.

According to Yubo Ruan, CEO and founder of Parallel Finance, a new decentralized lending and staking protocol on Polkadot, storing 80 percent of long-term funds in a cold wallet is an effective crypto storage technique. Short-term transfers can be made with the hot wallet.

Focus On Cash Flow

When deciding how to invest in the crypto market, liquidity is a crucial consideration. 

Cryptocurrency traders must be able to enter and exit positions quickly since the market moves so swiftly. In order for market players to buy at the best price and make a profit when they decide to sell any of their cryptocurrency holdings, there must be a demand for cryptocurrencies. 

Tally Greenberg, who is currently the head of Business Development at Allnodes, a crypto hosting service, states that you wouldn’t want to acquire an asset with tremendous potential but not being traded. Meaning that it’s just stagnating, so you’re sitting on it, and you’re at the mercy of the market. An asset’s most recent trading volume may provide insight into its liquidity. The amount of bitcoin that has been purchased and sold in a given period of time is known as the trading volume.

Embrace Volatility

There is still a lot of conjecture and hype around cryptocurrencies, which might contribute to increased volatility in the asset class because of this. Cryptocurrency market volatility is normal, healthy, and an opportunity to make money, despite its reputation as a danger. Volatility, according to Greenberg, is actually a good thing for savvy traders. 

For successful risk management, traders need to know what type of trader they are so that they can control the market’s price swings more effectively. She advises investors to keep a careful eye on the market and the asset they’re dealing in. Following the news and all related blockchain updates as well as historical charts can help you spot developing trends.

Invest As Much As You’re Able To

Investing in cryptocurrencies has a high risk of losing all of one’s invested funds. Invest only what you can afford to lose in the crypto market, just like you would in the stock market. If you are unable to bear the danger of losing your entire cryptocurrency investment, then you should not invest the amount you are contemplating. 

According to Ruan, determining your level of risk tolerance in the crypto market is a function of both your income and your level of competence. If you’re a newbie to cryptocurrency, you should put a smaller percentage of your investable income into the asset class.

Take Advantage Of Gains Regularly

Cryptocurrency market participants are urged to take profits on a regular basis by experts. A good rule of thumb is to keep your money in your hardware wallet. Many cryptocurrency investors confront a dilemma when it comes time to cash in on their gains: the price of a cryptocurrency might either fall or rise at any given moment. Over time, regular profit-taking reduces this risk. 

As Greenberg points out, many folks just buy and hold for an infinite time, and they’re at the mercy of news, memes, and celebrity tweets.” As with any investment, knowing why you’re getting into a crypto trade will help you better define your profit-taking plan. Your entry and departure points are clearly defined in this manner.

Diversify

In the crypto world, it’s not a good idea to put all your eggs in one basket. To reduce the risk of cryptocurrency investing, diversify your portfolio by investing in a number of coins and projects. The “internet of things,” non fungible tokens, DeFi ventures, and a wide range of coin kinds are among the many cryptocurrency and blockchain investments currently available on the market. 

The fact that different cryptocurrency exchanges don’t all have the same assets, according to Greenberg, means you may diversify even further through the use of cryptocurrencies. Investing in a variety of digital assets helps lower a cryptocurrency investor’s overall risk profile.

Dollar-Cost Averaging

DCA, or dollar-cost averaging, is a method of investing in which a set amount of money is invested over time rather than all at once. Investors can withstand market volatility in the same manner that taking profits regularly reduces the risk of price. It is possible to take advantage of bull and bear markets by using a DCA strategy. In a bear market, investors can get a good deal on crypto assets and then resell them for a profit later. 

There is a lot of excitement about the new asset class of cryptocurrency. In the meanwhile, DCA can help keep the hype under control. By purchasing your crypto over a period of time, DCA isolates your new positions in the market from your emotions and lets you disregard the short-term for long positions,” Ruan explains.