3 Best Ways to Invest in Crypto This Year (2021)
2021 is a big year in the cryptocurrency space and there is a huge amount of hype and excitement surrounding cryptocurrencies as we see the price of Bitcoin pushed through its previous all-time high of $20,000 and aim for $100,000 and above this year.
Change while investing in almost any cryptocurrency will likely yield profit this year, there are a number of ways to ensure that the optimal investment strategies are employed and that the most amount of return on investment as possible can be generated in 2021.
With this in mind we are breaking down three ways to invest in cryptocurrency this year, starting with a look at the state of the cryptocurrency market, for moving on to look at the three best ways to invest in cryptocurrency in 2021.
What is the State of the Crypto Market in 2021?
There is no doubting that 2020 was a year unlike any other given the effects of the pandemic that lead to the millions of unemployment applications and mile-long food lines that swept nations around the globe and that has continued into 2021 despite the severity of the pandemic gradually decreasing.
Cryptocurrency and its market have been praised throughout the pandemic for its resistance to inflation and its ongoing upward trajectory in terms of valuations and trading volumes which given the institution and banking push into the space comes as no surprise and millions of retail traders are joining aboard.
Crypto markets in 2021 are reaching refreshing new highs with Bitcoin alone reaching a market cap of over $1 trillion dollars for the first time this year and this is in addition to other coins like Ethereum, an altcoin, reaching all-time highs too and this is thanks to a healthy market amidst struggling economies.
Retail and institutional traders, as well as people looking to make an income, are turning to crypto as a way to hedge against inflation but as a way to earn money as well, and with many new exciting updates around the corner, which includes Ethereum 2.0, the opportunities to earn appear brighter by the week.
3 Best Ways to Invest in Crypto This Year (2021)
Covesting
Covesting is the world's first form of cryptocurrency copy trading and is one of the most innovative and popular ways to invest in the cryptocurrency market in 2021, with it opening up a range of the advantages for experienced traders and inexperienced traders alike.
Covesting allows for experienced traders known as strategy managers to be able to create peer-to-peer investment funds that are tied to the strategies, and then other uses known as followers are able to easily invest the capital into which of a strategy that they think will perform the best, having the capital copy the trades of the strategy manager, and sharing the same ROIs as some of the top performing traders in the market.
Covesting has seen widespread enthusiasm and adoption since its launch and remains as the world's leading form of cryptocurrency based copy trading in 2021, with its native token the COV token increasing in value by more than 10X over the past 12 months as a result of this.
Margin Trading
Margin trading is the practice of leveraging borrowed funds to increase the size of investments and the profits produced by it, margin trading is about winning and gains and since it has become more popular with traders today than ever before as it combined with volatile markets can generate amplified profits.
This trading style is a great way to make money with crypto in 2021 and especially for fund-limited users having low liquidity but great trading foresight as margin trading lets traders and investors borrow an amount of money over their cash holdings based on the leverage amount offered by the used platform.
Financial products and supported coins vary from one exchange and broker to the next though so do the offered trade types and leverage amounts, the higher the leverage is the greater profits and losses can become as a hundred dollars on a 10:1 leverage will reap the gains/losses of a thousand-dollar position.
Margin trading is a great investment option for traders and investors of all experience levels though with profits and losses being greater from market swings than the price movements of spot-traded coins this should be done using caution and a trusted platform/broker and with money that can be affordably lost.
Dollar Cost Averaging
Dollar-cost averaging is the strategy of investing small amounts of money into an asset over time instead of all at once with the hopes of being able to purchase more of it at a later date for a lower price, what this achieves is cost-per-asset reduction as it lets people reduce their average-paid-price per coin/asset.
DCA is a very useful strategy when strategically leveraged and is a way to reduce the negative effects made to a portfolio and its value during short-term market volatility, essentially, when prices begin to fall the trader will dollar-cost-average the asset and if they can purchase it lower will invest more into it.
Assume a currently-held asset is purchased for a hundred dollars per coin and then decline to seventy dollars a few weeks from purchase, if you know you have ten of them at a hundred dollars per piece your DCA is ten dollars but if you purchase ten more at the reduced rate your price per asset declines.
Using dollar-cost averaging as an investment strategy means that investors will add more money into positions at times when the asset is falling and gauging how low an asset’s value will go before you buy the dip is an art in and of itself but using advanced trading platforms can winning buys easier to make.
In Conclusion
While there are many ways to invest in the cryptocurrency market that are relatively basic, by going down this path in 2021 a significant amount of revenue can be left on the table which by using one of the three different strategies we mentioned can lead to a significant boost in overall success.
Covesting, margin trading, and dollar cost averaging are three of the most powerful ways to invest in cryptocurrencies in 2021 and are already being employed by millions of traders around the world in order to achieve optimal results.
Find out more about these three powerful strategies by checking out Covesting, margin trading, and dollar cost averaging.