Taking into account the crypto market’s exponential growth in the recent years, more and more people are getting keen on making money from cryptocurrency investments. This is entirely possible, and although investing in crypto assets remain risky, it is also a potentially extremely profitable dealing. The key is to get knowledge, and have the right strategies in place. 

The Basics

First things first, remember to only invest what you are willing to lose. What we’re going to outline here is perfect if you’re not starting out with a huge sum of money because you can potentially 100x some of your investments, turning 100s into 1000s, and then continuing to reinvest. It should be emphasised that we are still all in the early phase of cryptocurrency and as such it is still possible to earn decent profits from fairly small investments.  

Next, what you need to do is work out how much you have to invest in crypto in total and split this amount into two: one portion goes to lower risk investments and the other for financing higher risk options (e.g. microcaps). Keep in mind, however, that all undertakings in cryptocurrency are high risk.

Earning from Lower Risk Crypto Investments

For lower risk investments, keep some security in the top 100 coins. You may pick your favourites – ours are the Smart Contract ecosystems like Solana and Polygon – then just HODL. 

At this point in Crypto’s evolution, these will always be long term investments. All you need to do is keep an eye on the market and potentially add into a portfolio “watch” on CoinGecko or CoingMarketCap just in case one goes parabolic and you want to take profits.

You should probably have some targets in mind for these larger cap coins and in most cases, our suggestion would be to add sell orders straight into your exchange so that you can truly set and forget.

Putting Money Into Higher Risk Crypto Investments

For higher risk investments, we will be buying and selling microcaps. When doing so, you are much more likely to 50-100X your money if a project gets traction. The problem is and the reason it’s much higher risk is that a project could just easily go to zero.

Therefore in a nutshell, you have to pick enough projects with potential to ensure that statistically some will make it and get a return on your money. You also need to ensure that you take profits. Being microcaps, price fluctuates and something could be on top one minute and go to nothing the next. 

Here’s the lowdown on getting a good bang for your buck. 

1. Pick a crypto niche that interests you 

The point here is that although we are all still very early, for one person, crypto is big. It is very difficult to keep an eye on everything that is going on in the market let alone understand it all. 

With that in mind, we suggest that you concentrate on one part of crypto. Pick a niche that interests you and then just purchase your altcoins within that niche.

For example, it could be crypto gaming, Defi or a specific blockchain ecosystem.

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2. Shortlist reputable projects to watch

Finding reputable projects is a whole task on it’s own but in very simplistic terms, you want to look for:

• Professional online presence;
• Realistic & profitable offering;
• Doxxed team;
• Good marketing (especially via socials);
• Decent sized community;
• Good documentation (white papers or audits);
• Proof of work to date (demo or beta);
• Good set of partners (VCs and influencers);
• A good plan or road map.
  

Use influencers as a starting point but always do your own research and make your own opinions. Once you have your shortlist, you need to track these projects by using a cryptocurrency database like CoinGecko. 

3. Keep watching the market

Once you add projects to your “portfolio” watchlist, you will easily be able to track price fluctuations so that you can find a good entry point.

Look for a dip in price that is at least 50% off all time highs. Dips are usually linked to the global sentiment, in particular with BTC. You don't necessarily have to buy when you spot one, but stay updated. 

4. Work out which ones you will buy

As the promising projects on your shortlist work through their roadmap, it's time to work out which ones you think pump. Look for similar established projects or ones that are linked to projects that have been successful. Make sure they’re putting in a good effort in marketing, because that’s what people invest in. 

In most cases it comes down to perception. What’s the narrative behind that project and the niche in general. If it’s launching on a single blockchain, or how’s the parent coin doing.

5. It’s all about timing

It can be difficult to get the timing right and sometimes you may get a few false starts. It’s particularly problematic if a coin seems to go against the overall market trends. In some cases, when you really believe in a project, it may be better to buy and just hold, waiting for the pump.

However, there is a technique that works 9 times out of 10. As the crypto market as a whole seems to start rebounding, that’s your entry point. We are essentially looking for Bitcoin and Ethereum to go on a run. Once the two big dogs start moving, there will be a delay but most altcoins follow, starting with the higher market cap coins and trickling down to the microcaps.

One other strategy you can employ when seeking a good entry point is to look for the movement of your entire niche, in particular the higher market caps. If these start going on a run, like the above there will be a delay but eventually the lower market caps will follow. 

6. Pick a few sell targets to make sure you take profits on the way up

This is probably the most important part of the strategy. You have to take good profits on your way up. There are two ways of doing this:

1. Have 2 or 3 targets and completely exit your position after they are achieved;
2. Taking a proportion of your holdings at intervals all the way. It will keep reducing but you will likely end up holding a portion when it does finally correct and crash.
   

As an example for #2, you could sell 50% at 5-10x, and the other 50% at another 5-10x and so on. This kind of strategy means that you can still stay in a project love whilst taking profits all the way up. 

Holding a large portion of your position (aka HODLing) is probably not the best approach when it comes to microcaps because it is a pure gamble to predict which projects will stick around for the long term.

7. Rinse and repeat

It’s always good to realise some actual cash (fiat) profits but for the majority, you will just be rinsing and repeating. That means take your profits and then look for the next project that is primed for a positive movement.

8. Bonus

If you want to get ahead of the game, you can use reputable crypto launchpads such as BSCPad and Seedify to get into projects at the IDO stage. This is potentially even more risky but the rewards are even greater.

We will talk about IDO and launchpad strategies in an upcoming article.

Conclusions Around a Highly Lucrative Crypto Strategy

Unless you're lucky, your projects won’t go up indefinitely so keep in mind that when you make high risk crypto investments. Also consider there is a good chance that you won’t reach all your targets. 

However, if you so take profits on the way up, you'll always have more money to invest. You can then watch for dips and buy back into the projects that you have taken profits out of but do be careful not to keep coming in and out of the same project because these wont keep 10Xing.

Two closing tips:

1. Keep a rainy day fund for when the market crashes unexpectedly because there will be some great deals to be had;
2. Only risk what you are willing to lose.
   

Remember to always do your own research on both the strategy and the particular projects.