How To Build A Profitable Crypto HODL Portfolio
Usually in the crypto space you are either a long or short term trader. Many who aren't all good at spot trading especially futures opt for a more stable and profitable side of the space.
HODL which means Hold on for dear life is a long term strategy that requires holding onto coins or tokens for a long period usually 6months and above. A passive way of making money without having to fretvover the daily volatility. A crypto portfolio is a collection of cryptocurrencies owned by an investor which usually contains a variety of currencies like stable coins, utility tokens or governance tokens. For example you could creata a portfolio with 25% Bitcoin, 25% stable coins, 25% altcoins and 25% NFTs depending on your level of understanding or research. There are other forms of cryptocurrencies to choose from like Payment coins, utility tokens, governance tokens, security token and stable coins. But before your create that HODL portfolio here are certain factors or tips you should take into consideration.
First what coins have the most potential. Before you proceed to buy a bunch of currencies it is important that you conduct enough research into each one of them. Are they governance tokens? Utility or stable coins? Will they be around for long or just a pump and dump project? By taking all these factors into consideration and properly weighing your options you can decide what token or coin to invest in and how to balance your portfolio. Read expert views on each project, upcoming developments and other factors as it will help make better decisions as well as reduce the amount of losses you make long term.
Secondly only invest an amount you can afford to loose. While long term trading might seem safe it is always important to take precautionary measures. Do not make the mistake of investing all your money as this could frustrate you into making irrational decisions. Just because it is a long term portfolio doesn't guarantee 100% profit, the market volatility could cause your assets to drop very low even within a long period. Should things go wrong that might leave you in a very bad shape or even scar you forever even if you feel your portfolio is loss proof.
Thirdly make sure to hold some stable or utility tokens. The will help provide easy liquidity in case you need to close or open a position or even invest more into a particular coin. Utility tokens are used to pay for transaction fees when interacting with decentralized applications and they also act as keys to a service or product. Waiting for a particular P2P trader might cost you to lose buying or selling opportunities especially for people in countries like Nigeria.
And lastly determine how long you intend to HODL. The period you intend to HODL is also a big determinant when creating a strong portfolio. If you intend to HODL for 6months to a year then you should opt for more established and huge potential coins. For example an hodl period of 6 months to a year, coins like Ethereum or Bitcoin are good examples. You can easily notice this when you study their previous trends within that time period. Including new projects might not make you as much profit because they might take a long period to get stable or even increase in value. As always this is not a financial advise as it is always important that you DYOR.