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How to set cryptocurrency investment goals and find investments
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If you’re ready to start investing in cryptocurrencies, it’s time you set yourself some investment goals.
If you go into an investment with a clear plan, there’s less chance that you’ll make a mistake. It can be difficult to choose a cryptocurrency that meets both your investment and personal goals. There are about 2,000 on the market and they all offer something different.
Let's run you through everything you need to know to get started.
Setting investment goals
Before you invest in cryptocurrency, or anything for that matter, you should establish clear goals that define what you want to get out of that investment.
Only you can come up with your investment goals, but there are a few questions you can ask yourself to help form them:
- How much money are you willing to invest (and potentially lose)?
- Do you want to engage in short-term investing/trading, watching the market daily or even hourly to make investments and trades?
- Do you want to put your money into some currencies you believe will be successful in the long run?
- Do you prioritize generating income over investing in a company’s mission?
Ultimately, investment clarity comes down to how much money you want to invest, how you want to invest it, what you want to invest in and how you want to manage your investments.
Finding blockchain projects to support
Investors look for companies that have goals and a vision that resonates with them. If an investor believes in what a company is trying to achieve, it makes more sense to invest because they understand and believe in the long term vision.
In crypto, some blockchain projects provide technology services to solve specific problems. Ethereum, for example, enables smart contracts that allow people to execute contracts digitally without the aid of a third party.
Some serve as social media platforms, like Steemit. Others, like Litecoin, provide unique ways to process daily transactions. To find projects that really resonate with you, you’ll have to do some research.
Doing your own research
To learn more about specific cryptocurrencies you need to find resources that can provide reliable details. There are hundreds of valuable currencies outside the heavy hitters like Bitcoin, Ethereum and XRP. Here are a few popular sites for researching the cryptocurrency markets:
- CoinMarketCap: This is the most common destination for finding the current value of cryptocurrencies. It ranks the coins by market cap – the total value of all a currency’s coins in the world – while also providing a per-coin value, the total coins in circulation, value changes in the last 24 hours, and a graph of the coin’s value over a recent time period.
- CoinDesk: Founded in 2013, CoinDesk is one of the oldest sites for cryptocurrency information.
- CoinTelegraph: Another popular source of market news. This site provides short, easy-to-read articles and news updates.
- Liquid Blog: A great resource for improving your investment and trading skills.
Remember that you’re not just investing money in a burgeoning new asset; you’re investing in a new technology – blockchain. You should understand the underlying technology and how it ties in to make this all special.
Here are a few good sites for diving deeper into blockchain.
- Blockonomi: This is one of the best destinations for new investors. Started during the crypto boom of 2017, it provides news about currencies, but the real value is the informational and education content about blockchain.
- CCN: This site offers not only news about the crypto market, but detailed analysis.
- CryptoSlate: Also founded during the cryptocurrency boom of 2017, this site offers a broad, robust overview of cryptocurrency.
- Liquid Blog: We cover the most important blockchain and cryptocurrency related topics right here on the Liquid blog, from basic to advanced, and answer the most common questions and concerns.
Developing your crypto investment goals
You need to know whether you are in for the long or short term.
Historical data of the traditional stock market shows that although the market can have massive swings (and even crashes), if you keep your money in it for a long period of time and manage your investments well, you will see a return on your initial investment. Long-term investing in cryptocurrencies takes the same approach: You invest your money in a currency, watch it, manage it, ride out the ups and downs, hoping your due diligence has paid off and profit is coming.
Short-term trading is the opposite. This approach aims to maximize your gains off the volatile nature of the market. The idea is to invest in currencies whose value is low or that you believe are likely to increase, then sell to make a profit in a relatively short time frame.
When it comes to analysis, you can conduct different types, including technical analysis and fundamental analysis.
With technical analysis, you use past price data to predict future performance. Fundamental analysis involves taking a close look at the fundamentals of a project.
Getting a full grasp on the intricacies of blockchain and the cryptocurrency markets takes a significant amount of time and research.
Once you have your goals in place and have identified the currencies that meet them, you’re ready to move forward and create an investment portfolio to meet your financial and personal goals.