In recent years, the cryptocurrency industry has offered one of the most lucrative investment opportunities around. And small business owners have noticed. Many of them now rely on cryptocurrency investments to form a significant part of their personal portfolio. But since the beginning of this year, investment markets — including crypto — have entered bear territory. And that places a significant financial drain on business owners who must now balance their own financial well-being with that of their businesses. As a result, many have started exiting crypto to stave off further losses. But just like the stock market, it’s the people who stay the course that end up coming out on top. And rather than divest from crypto assets, business owners should instead reconfigure their portfolios to limit risk while taking advantage of market volatility. Here are the three crypto investment strategies business owners should consider to weather the downturn.
Automated GRID trading
One of the biggest challenges of investing in a volatile market is that it’s impossible to stick to one strategy for very long. Wild price swings can cause what seemed like a sound investment decision today to look like a bad idea tomorrow. But there is a way for investors to take advantage of the volatility — if they’re willing to hand over their accounts to a crypto trading bot. This allows them to design and execute an automated GRID strategy that can generate high returns in a volatile market. A GRID strategy allows an investor to preselect multiple price entry and exit points and relies on automation to place the right orders when opportunities arise. The benefit of this strategy is that the investor can tailor their approach to their individual risk appetite. And because it is a strategy that relies on market volatility, it can work to the investor’s advantage regardless of how the overall market is performing. When the market is doing well, he makes money by buying low and selling high. And when the market shows weakness, it does the opposite and profits from short and cover orders. In other words, it’s a perfect long-term solution for crypto investors.
Another excellent strategy for crypto investors that will generate steady returns during the current market downturn is yield farming. It is a rather unique type of investment that has no real analogue in the world of traditional finance, apart from such instruments as bank-issued CDs. But in the case of crypto, there is no centralized institution that generates the returns to distribute to investors. Instead, yield farming allows investors to leverage their crypto assets to earn high APY returns by providing them as funding for market operations. And with the Fed’s recent rate hikes, yield farming is more attractive than ever. That makes now the perfect time for investors to give it a try. The most common type of yield farming is known as staking, in which investors agree to lock up their assets — or stake — in a crypto account for a specified period of time. These assets then become part of the operations of that currency’s blockchain, which uses these stakes to validate transactions on its network. In return, the investor receives a portion of the profits generated by the blockchain itself. Additionally, crypto asset owners can also engage in yield farming by joining a crypto lending platform. Such platforms offer loans using investor assets and reward those investors with a significant portion of the interest generated by those loans. Better yet, many include interest rate stabilization features for predictable investor returns. Or investors can also earn solid returns by locking up their assets in liquidity pools that provide the currency needed for the millions of transactions that take place every day. In return, investors receive a share of the processing fees earned by the pool itself.
Invest according to the Elliott Wave theory
One of the things that made crypto such an attractive investment in the first place is that it is beyond the control of traditional financial institutions. That made it less likely — in investors’ minds — to favor larger investors at the expense of the little guy. It was a natural match for small business owners, who themselves often compete against larger market competitors. But while crypto markets offer a fairer playing field than some traditional investment markets, they still move at the whim of investors. That means deteriorating conditions can lead to precipitous falls in prices as panicked investors try to avoid losses. And those moves aren’t always tied to true financial fundamentals, and rather reflect investor sentiment on the day. However, it turns out there is an investment strategy that takes advantage of this trend. It’s called the Elliott Wave Theory and it uses crowd psychology principles to predict where crypto markets are headed. By applying the theory to their crypto portfolios, investors can benefit from the price fluctuations that occur when market speculation fuels volatility. In this way, it is possible to generate downturn-proof investment returns in crypto – an option not available in other types of investments.
The final result
As any savvy business owner can tell you, one of the keys to a company’s success is finding ways to capitalize on competitors’ mistakes. And they also know that some of the best times to capitalize come when economic headwinds cause the competition to make unintentional mistakes. Right now, the same logic applies to the crypto markets. When conditions worsen, savvy investors can adjust their strategies to reap significant profits as their competitors flee. It is more than possible to use one or more of the above strategies. And as the old saying goes, luck favors the brave – and now is the perfect time to strike.
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