HOW TO PREPARE YOUR CRYPTO HOLDINGS FOR BIG GAINS
Cryptos are ending the week a bit flat. It looks like there may have just been a bit of a bounce, but it will probably just be back to where we were a few days ago. Although the news is a bit more optimistic, we don't expect much activity over the weekend.
Many of you have asked about allocation of your crypto holdings. Today we just want to give a few different ideas to consider...
1.) Buy only the top market cap cryptos and hold. Some just hold BTC, ETH, and nothing more. Others only hold the top 5 by market cap. For us, we have some of these that we got in quite early on and do plan to simply hold for the 2-5 year range, but we don't put 100% of our holdings in these. One reason is because other cryptos may have more potential room to grow than these that already have huge market caps. If you do this, you don't have to check prices much and can pretty much snooze through these ups and downs.
2.) Put your holdings into the top 20-30 cryptos by market cap. We see a lot of people doing this. However, it's not good to do it just based on popularity. It is good to have cryptos and projects that have real concepts, products, services, and ideas that can be executed on in the marketplace. We have seen scammy ones like BitConnect, with a bug market cap...crash. We do think only 20-30 may survive, but that doesn't mean it will simply be the current top cryptos. Other new ones may come along.
3.) Watch CoinMarketCap for the coins with the most recent big percent gains. We don't do this and would suggest not doing it. Simply looking at growth means almost nothing.
4.) Focus on high risk high reward small coins, ICO's, etc. We do allot a portion of our crypto holdings to new projects with a lot of room to grow. In fact some of our best gains have been from this, but also, the risk is much higher.
5.) Trade in and out and don't give much attention to the type of coin. We do like to trade in and out of some coins, but only to generate funds for putting in longer term holds.
Summary: We have things split into 4 "pools." We like to have some cryptos that will just sit there like investing in a startup and that money is effectively "gone." It maybe will go close to $0 or pay off well in 2-5 years and we won't take it out for any reason unless there are substantial gains. These are the "Big 3," BTC, ETH, and LTC. Then, we have some in smaller cryptos. Ones that have really good potential and fundamentals, we will hold, but trade in and out of portions of the holdings. For example, if one "moons" we may take profit on 30-50% and then reinvest on a dip. Then, we have higher risk new projects, ICO's, etc, that we do not put big amounts into that can pay off big returns. And lastly, we trade in and out of coins (generally using Kraken) to try to grow funds to put into these other 3 "pools." We can't say how you should split them up, but ours are broken up close to evenly around 20-30% of total funds per pool.
We hope this helps you see how you can play with these to profit in the crypto market. For example, right now the market is slow, but perhaps you can take some from pool 2 and put it in a trading pool to trade bounces, and so forth.
We are going to have more information next week about different ways to profit in the crypto-markets.