What are the risks when investing in cryptocurrency?
Any investment should take into account the risks. There are no less risks in cryptocurrencies than with classic investment in fiat assets.
You need to be prepared for a change in the value of the coin, and in a smaller direction. A platform that provides trading or asset storage services may fall under sanctions or go bankrupt. Hackers can hack into a wallet and steal money if sufficient protection conditions are not taken.
Therefore, before investing, it is necessary to take exhaustive measures for the safety of funds. Use proven and reliable platforms, diversify wallets and brokers. Install reliable and modern software, do not trust strangers on the network.
As investment guru Warren Buffett used to say: "Investments are life-long, and eternity is the ideal time for investments." Investing is a complex and creative process, from which, with the right actions, you can get a lot of pleasure.
To begin with, make a selection of promising, but undervalued projects. To do this, you need to understand the issue, it will take a lot of time, but you should not rush. Having chosen no more than 10 projects, follow their fate, who is in charge, what plans they have, due to which they plan to make a profit.
If from your point of view the project is promising, invest in its token from 1 to 5% of the amount pledged for investment. It turns out that the selected 10 assets will take 10-50% of your deposit, invest the rest of the money in stablecoins for possible averaging.
It is ideal to form a position in the portfolio in parts, for several months, buying on large drawdowns, when everything is red in the markets, and the news screams about the collapse of the economy! A couple of weeks will pass, and the same media will not remember the fall and will write about eternal growth. At such moments, it is important to be cool.
After forming a portfolio, forget about it, go to the application 1 time a month, no more often. Set the profit margin, if any asset exceeds it, for example, it will grow 3 times, and 20% was enough for you, sell it, and transfer the profit to stablecoins. Count on the portfolio itself for 3-5 years, and do not sell the fallen assets immediately, it is better to average by 1-2%.
What to buy in 2023?
Consider the top 10 cryptocurrencies by capitalization, which account for almost 90% of the market: Bitcoin, Ethereum, Tether, BNB, USD Coin, XRP, Binance USD, Cardano, Dogecoin, Polygon.
Additionally, we will select young and promising coins that represent new technologies for the market.
If we are talking about promising currencies, then Bitcoin will be among them. Firstly, it is the largest digital currency. Secondly, the issue of Bitcoin is strictly limited, and most of the coins already mined are on cold wallets.
The huge capitalization and investments of global funds speak about the future growth of Bitcoin, as billions are managed by literate people. The coin has a drop potential of about 50%, but the growth can be hundreds of percent.
Tether, USD Coin, Binance USD represent a class of stablecoins that helped investors to preserve assets during the bear market. It is a good idea to store some of the assets in stable cryptocurrencies, since in the event of a sharp drawdown of the markets, it will be possible to profitably buy interesting assets.
If for some reason you are not satisfied with Bitcoin, you can pay attention to altcoins, which showed good results in 2022. Ethereum Classic looked especially interesting. Other cryptocurrencies: XRP, Cardano, Dogecoin, Polygon, Ethereum are also not worth writing off, they will still show everyone how to grow. Behind these cryptocurrencies are multibillion-dollar projects with fully working technologies. If their products are introduced into the mass market, the capitalization will grow.
There are many promising tokens breathing down the backs of market leaders, let's look at the most interesting ones in our opinion.
The Chainlink project has its own LINK token, which is released in the Ethereum blockchain. The coin is necessary for oracles and is an economic incentive for node operators. LINK is also used to improve the accuracy of data processing and support the stability of contracts in the network.
Hashflow is a decentralized trading protocol with increased protection against slippage and other disadvantages of AMM (automated market maker).
The problems are solved with the help of an innovative model developed by the creators of the project, thanks to which market makers will receive a wider range of opportunities for liquidity management.
Instagram Facebook and Instagram became known for the Arweave token after Meta (Meta Platforms, the owner of Facebook and Instagram, recognized in Russia as an extremist organization and banned, as well as social networks themselves) integrated the Arweave protocol for NFT trading on Instagram. With this coin, the popular social network will store and archive NFT.
The Aptos cryptocurrency has inherited the technical advantages of the Diem project, aiming to create a scalable block chain to meet the needs of users in order to store and transaction crypto assets. Under ideal conditions, the Aptos network will be able to process 160,000 transactions per second, and currently it already processes more than 10,000 transactions per second.
Sandbox is a gaming metaverse, with 2 million registered players. Sandbox users can trade inside the game service using their own SAND cryptocurrency.
Polygon is a blockchain protocol for speeding up transaction processing. After the transition of Ethereum to PoS, the number of Daaps on Ethereum will double in the coming years, and the price of the token will continue to grow.
This article listed both new and long-known cryptocurrencies that can give a good increase in value in 2023.
However, do not think that other tokens will not grow in the new year. At the moment, there are several thousand digital assets in the world. Most likely, 90% of them will eventually turn out to be a scam, but the remaining 10% will show multiple growth, the same as Microsoft and Amazon showed after going through the famous "dotcom puzyara" crisis.
Our task is to try to see a promising project and be among the number of investors at the moment when the markets recognize its success!