© Pixabay
Cryptocurrencies today focus the attention of many investors. Indeed, these digital currencies that work thanks to blockchain technology are about to revolutionize our economy. Nevertheless, there are more than 10,000. It is therefore not easy to find your way around, to know which are the most promising crypto-currencies and which to buy.
Wondering which cryptocurrencies are the most promising and how to invest in them? To find your way around, we propose in this article three strategies to apply according to your investor profile? You will know precisely in which crypto-currencies to invest. Define your investor profile to know which cryptocurrency to buy
The first thing to do when you get into cryptos is to ask yourself about your investor profile. Indeed, your expectations will differ according to criteria such as your age or your personal situation. So you need to start by asking yourself questions to define your profile.
What is your financial situation? How much time and money do you want to spend investing each week? What are your goals with cryptocurrencies? Do you want to generate passive income or do you want to make quick gains? Are you sensitive to risk? Are you ready to put up with drops of 10, 20 or 30% in a day? In short, as you will have understood, you must start by determining credible expectations based on your current situation before even looking for a promising crypto.
Another crucial question to ask yourself before investing in cryptocurrencies is which platform you can trust. This is because the crypto field is filled with malicious people and sites. If you are not vigilant, you may see your account totally emptied.
To help you navigate this complex world, we present three strategies that correspond to three types of investors. In addition, we present you the best cryptocurrency exchange platforms to be able to implement them. The three investor profiles
There are generally three investor profiles: prudent, balanced and dynamic. In the first place, the prudent investor is a person who will seek safety above all else. It accepts a moderate performance because its main objective is to preserve its capital.
The balanced investor arbitrates between performance and safeguarding of his assets. This type of investor accepts reasonable risk-taking.
Finally, the dynamic investor has a high tolerance for risk. In the context of crypto-currencies, this person seeks above all to identify projects still in the embryonic stage in order to achieve a significant return on investment when they are better known. We can talk here about so-called “promising” crypto-currencies. Indeed, it is possible to multiply its starting capital by two, by ten or even more in this bubbling industry. Nevertheless, this requires some research work.
If you recognize yourself in one of the profiles mentioned, it is time to take an interest in the investment strategies that correspond to it in order to know which are the promising crypto-currencies and which one to buy.
The preferred platforms to invest in promising cryptos:
Regulated Platform (CySEC)
Intuitive and simple interfaces
Ideal beginner (demo account)
Assets (CFDs): cryptos, stocks, etc.
9.6 /10
Buy Bitcoin/Ether Easily
A simple and intuitive mobile app
Open an account in 19 seconds
4% return on Bitcoin holdings
9.4 /10
2What cryptocurrency to buy for a prudent investor?
If you want to discover the world of blockchain and cryptocurrencies without taking too many risks with your capital, know that there are suitable strategies.
Indeed, if the majority of crypto-currencies are very volatile assets and therefore necessarily risky, there is a category that escapes the rule: stablecoins (stable currencies).
Tip: to start without taking too much risk, investing in recent (and promising) cryptos is not necessarily the most judicious. This can indeed go very quickly in both directions, positively or negatively from a return on investment point of view. What is a stablecoin?
Stablecoins have been designed to offer the best of all worlds, that is, the technological possibilities enabled by cryptocurrencies coupled with the stability of traditional currencies. This is because stablecoins are virtual currencies backed by underlying assets. These assets can be fiat currencies (such as the dollar or the euro for example) or commodities (such as gold) which ensures their stability. Each token is issued at the height of the underlying asset in a 1:1 ratio. They can thus represent a perfect gateway for the prudent investor.
Stablecoins have established themselves as an essential asset in the world of crypto-currencies and blockchain. They were initially imagined as a safe haven in the face of market volatility. Indeed, they allow investors to secure their gains and protect themselves from fluctuations.
The cryptocurrency market is arguably one of the most volatile financial markets in the history of finance. While it is possible to realize impressive capital gains, the losses can also be dizzying. It can happen that some values literally collapse in a single day.
Stablecoins then play the role of umbrella and allow investors to secure their gains or minimize their losses. It is indeed much faster to convert cryptocurrencies into stablecoins than into traditional currency. This is all the more the case during a bear market period. In addition, the tax on capital gains does not apply in case of conversion of a cryptocurrency to a stablecoin. They therefore make it possible to manage its taxation more serenely.
You can find more information about this in our article that explains how to declare your crypto-currencies. Examples of stablecoins
The USDC is a stablecoin pegged to a fiat currency, the US dollar. This token is issued by a consortium called “Centre” and consists of two major industry companies, Circle and Coinbase. For every USDC issued, US$1 is held in Center accounts. Launched in September 2018, the USDC has since been audited numerous times by financial institutions that have certified the existence of these dollars.
We can also cite the TETHER USD (ticker: USDT) as another example of a stablecoin backed by the value of the US dollar. The USDT is issued by the company Tether ltd whose parent company is Bitfinex, a centralized exchange platform. Nevertheless, this stablecoin has already been the subject of several controversies. Indeed, some authorities have expressed doubts about the fact that the USDT is really backed by dollars kept in the coffers of the issuing company.
PAX Gold is another example of stablecoin. Unlike USDC, PAX Gold (PAXG) is not backed by fiat money but by gold. Indeed, each unit of PAXG is backed by a fraction of ingot stored in the vaults of Brink’s, a London company. This company is licensed by the London Bullion Market Association, the group responsible for the gold bullion market.
This group is supervised by the Bank of England. The goal of Paxos, the company issuing PAX Gold, is to leverage blockchain technology to make gold more easily transferable. The company also wants to democratize this asset by allowing investors to buy it in very small quantities. How to invest in stablecoins?
Stablecoins can be a very good choice when you are a prudent investor. Indeed, be aware that it is possible to obtain a return of up to 8% per year thanks to these stable currencies.
