Investing sometimes feels like gambling. There’s no way to predict whether a particular crypto will gain or lose value in the next month or year. Lots of people have made fortunes investing in Bitcoin and other cryptocurrencies, but people have lost money too. Aside from deciding which is the best crypto to invest in, choosing the time to invest in cryptocurrency is the most important choice you’ll make.
Investment oracles seem to be of little help when it comes to timing. Investing legend Warren Buffet famously says the best time to invest was several years ago and the second-best time is now.
Buffet’s observation may seem unhelpful, but it is true. Cryptocurrencies like Bitcoin have seen legendary ups and downs, but the overall trend has been up. Over the past 10 years, Bitcoin has delivered investors a compound annual growth rate of 116.41%. A €100 investment made in 2011 would be worth more than €200,000 a decade later despite the roller-coaster ride Bitcoin investors endured in the spring and summer of 2021.
If you had invested the same €100 in a NASDAQ fund you’d have enjoyed a respectable CAGR of 17.77% and after a decade you would have nearly €5,000. That’s not bad, but it’s not €200,000. Cryptocurrencies have consistently outperformed stocks, commodities, and bonds for large and small investors alike. If you know how to invest in cryptocurrency – and at sites like Kriptomat, it’s a breeze – you can start building your investment portfolio in minutes.
It’s About Time, Not Timing
Day traders have developed hundreds of complicated theories about desirable days of the week or hours of the day for investing. They pore over candlestick charts looking for patterns that will allow them to make a buy just before the market rises or a sale just before it falls. Every year, thousands of investment advisors write books and articles packed with strategies for identifying the right time to buy and sell.
Some of that advice is helpful. Most of it is speculative. No timing method can guarantee results.
Experts say that the best way to build a portfolio is not to buy crypto at the right time, but to make investments and hold them until they appreciate – to focus on time, not timing. The overall trend of the crypto market has historically been upward. Yes, individual coins and tokens lose value. There are periods of weeks and months when prices may be below what you paid. But in the long run, most of the people who hold on to their crypto investments reap rewards.
One of the best ways to level out market fluctuation while building a portfolio is to make small investments on a regular basis. Investing 25 euros every week or 200 euros every month is a painless way to build a portfolio with small amounts of money that you may not even miss. This can be an excellent strategy if you’re saving for retirement or building a fund to pay for your kids’ college tuition.
Many investors also find it prudent to invest in multiple cryptocurrencies or to include a few cryptocurrencies in an overall strategy that also includes traditional stocks and other managed investments. Diversification is a good hedge against the poor performance of any individual investment.
But that’s not the question before. Just now, we are considering what is the best time to invest in crypto. For many people, the answer is right now.
NOTE
The text is informative in nature and does not count as an investment recommendation. It does not express the personal opinion of the author or service. Any investment or trading is risky, past returns are not a guarantee for future returns – risk only those assets that you are willing to lose.
