Cryptocurrencies have been in the news for a very long time, and many people are wondering whether they should invest in them or not. When it comes to cryptocurrency investments, they are decentralized and free from the control of any government authority. The transactions are secured by blockchain technology and are encrypted by nature. The chances of hacking and fraud are meager.
Moreover, you can earn lucrative profits from them if you invest wisely. All of the above does sound great, but like every investment, cryptocurrencies have a downside, too- the market is highly volatile, and if you are not prudent with your assets, you will lose a lot of money in a concise time!
Kavan Choksi- how can you deal with the market volatility associated with cryptocurrency investments?
Kavan Choksi is a highly respected professional in financial management, investments, cryptocurrency, and business. When it comes to cryptocurrency investments, he says that you should always have financial education about them for success. Though cryptocurrencies have done reasonably well under some market conditions, there have been intervals where their value has dropped so drastically that investors became concerned about a crypto winter- a type of market condition where the importance of crypto coins does not increase for more than one year.
Copy trading as a solution
Now, from the above, this does not again mean that you should refrain from cryptocurrency investments. You can resort to copy-trading strategies where you tend to mimic the assets of any professional investor in the field. You can effectively copy trades on popular trading platforms for cryptocurrencies like eToro, 3Commas, and others. You have to choose the crypto trader based on specific traits like the number of followers they have, their past records and performance, the levels of risk their performances have, and others. Once you have chosen the trader after evaluating these factors, you can link their account to yours, and the report will purchase and sell the same assets automatically as your trader.
Investment in crypto platforms
Besides the above, you also have the option to invest in crypto infrastructure, which are companies that are directly associated with the industry. They include mining companies and platforms that deal with crypto trading. Some examples of public companies that are operating in this space are Riot Blockchain (a developer of crypto infrastructure) and Coinbase (a crypto trading platform).
Hedging
According to business and finance expert Kavan Choksi, in case you are uncertain of the way your assets are heading, you can always hedge all of your bets safely. Hedging refers to a strategy of investment where you conduct the primary trade in the expected market direction and the secondary business in its opposite direction. Hedging prevents you from losses, irrespective of whether the market falls or rises.
Investors in cryptocurrencies can hedge funds both in the long and short term in the future needs. When you decide to go in for a long period, you agree to purchase the cryptocurrency at the current price at the predetermined time in the future as you expect its value to rise. On the contrary, going in for the short term refers to a strategy where you have agreed to sell the cryptocurrency at the price of that day at a predetermined time in the future if you expect its value will fall.