Investing is the act of committing money or capital to an endeavor with the expectation of obtaining additional income or profits. In simple terms, investing is making money work for you by producing more money than what you originally had.

There are many areas you can invest in real estate, starting a company, buying company shares, or buying cryptocurrencies. Some investments come with high-risk high rewards like cryptocurrencies.

Cryptocurrencies are a new class of assets that many people agree with the potential they could bring to our everyday life meanwhile many others have no idea what the future holds for them. This makes cryptocurrencies a very speculative and volatile asset class.

Are you investing or trading?

Many will use trading and investing interchangeably, but they are two different things. You can make money from trading, however, keep in mind that it takes skills to be a good trader. Trading requires you to be alert about your positions and take action when needed.  As you could make lots of money by trading in a short period of time, you could also lose it all in a matter of munites or hours. Just take a look at the picture above and notice how the guy below looks super stressed.

Unlike trading, investing requires little involvement in your positions after you buy your preferred crypto assets. All you have to do is hold your assets for a long period of time. You can enjoy doing other cool things while not being mindful of your investment. Just like the first guy in the picture. (seems like he is playing a video game). Investing is putting money at your service to make you more cash while you can relax and do other important activities.

Time has shown that holders make more profits on their investments as the picture below illustrates this better.

As you can see on the chart, Bitcoin prices peaked and were dumped numerous times. But the bigger picture shows that the price is going up over time. 

Be an informed investor

To be good at anything, one needs to learn it, put it into practice, and accept failure until one becomes good at it. Investing is no exception. Many call themselves investors but have no basic investing knowledge. 

The crypto space may be a niche on its own. Still, it's influenced but other economic factors like the market cycle (bull & bear), inflation, the FED interest rate, the macroeconomic, and micoeconomic.

The only way to be educated on these economic factors is to read, read, and read. There are free content on the web that you could take advantage of. 

Also, read crypto news and reports to stay on top of the game. With enough information on your hands, it will be easier for you to see opportunities in the chaos. You will no longer be that investor who buys anything he is told to and sells when panic kicks in. 

You are likely to make money if you know what you are doing.

Diversified your portofolio

A well-diverse portfolio helps you minimize your risk. Cryptocurrencies can be categorized into 3 groups: Large market capitalization cryptocurrencies, medium market capitalization cryptocurrencies, and small market capitalization cryptocurrencies.

It's up to you to mix your portfolio with tokens from each category. Keep in mind that large market-cap cryptocurrencies are less riskier than mid-cap cryptocurrencies. Small-cap cryptocurrencies are the most riskier.

Large market-cap cryptocurrencies have a market capitalization of $1 Billion or more. These cryptocurrencies are less volatile because they have already established themselves. However, they are considered low-risk and low-rewards because of their stability. Examples of these cryptocurrencies are Bitcoin, Ethereum, and BNB.

Mid-cap cryptocurrencies have a market capitalization between $100 million and $1 Billion. They are more riskier than large-cap cryptocurrencies but have the potential for more growth. 

Small-cap cryptocurrencies are like mid-cap cryptocurrencies on steroids. These cryptocurrencies are new in their niche and their price movement is more influenced by hype. You could make crazy profits on these assets but you could also lose all your money by gambling on them.

Of course, none of these is financial advice. 😉