Lately, I've been posting many articles about trading cryptocurrencies like risk management and trading psychology, as well as other topics that I think would help the community by providing some of what I learned over my years of trading. However, I think that the time has come to share with you the three top cryptocurrencies that I chose to invest in, and the reasons why I did it.
As of today, my cryptocurrency portfolio is composed of 8 coins in total. I usually try to keep it simple and divide my coins between the ones I want to HODL and the ones I want to trade with on a short-term basis. The line between these two categories can change. I could be HODLing a cryptocurrency and then decide to trade with it, if my strategy tells me to do so. Which doesn't happen too often and hasn't happened yet.
I will not be talking about the cryptocurrencies I exchange on my day-to-day trading. Because, as I've mentioned it before, I could decide to sell them and buy others at a moment's notice. So, I don't think that sharing which ones I use would benefit you. Certainly not in this article. I think I will keep that for another post.
But, I am going to tell you which ones I believe in at the moment, and the reasons behind that.
The coins I have in my wallet
Let's start with the foundation. When I first integrated the world of buying and selling cryptocurrencies and crypto-assets I didn't know where to begin. I was all over the place. Trading cryptocurrencies left and right. However, I think that what I was doing shouldn't be considered as trading. It's disrespectful to the profession.
But it was necessary. It allowed me to learn my way around the field and settle down. In fact, I think I was trying to do every mistake possible. Which left me with only few ways to do trading correctly. I developed some profitable strategies. I gave them some time to mature. And for the last four years this has served me quiet well. THANK GOOOD! Now, I trade for myself and professionally.
Cryptocurrency #1
Consistency is key in this crazy, crazy world. Being able to generate a consistent average percentage on your deposit is much better than doubling your money in one day just to lose it all the day after. That's what drives every trading decision I make. It's also what should show on my portfolio as a whole.
Which brings us to my first cryptocurrency of choice. Here I chose to go with what's popular. Popular doesn't always mean bad. I'm talking, of course, about Bitcoin.
I started late December 2016 when the price of 1 unit was $891.50. I bought $50's worth of Bitcoin, which got me 0.05608524 BTC. One year later to the day, it was up by 1,591%. Which meant that my $50's worth of Bitcoin had a value of $795.5. You can only imagine how I felt. I was filled with regret. And, worst of all, I was FOMOing HAAAARD! But I didn't sell. I sticked to my strategy and kept emotions out of the game. Something that helped keep my mind from thinking about it, is that I kept myself busy by trading other assets.
By June 2018, the price came back from its high to around $7,636.42. I said to myself that, at this price, I would be buying at a big discount. So, I decided to go with $500's worth of Bitcoin. Equivalent to 0.06547570 BTC. However, I was wrong. Very wrong. The price continued to fall and I continued to weep. I kept buying here and there while weeping. Small amounts.
By mid-February 2020 I had 0.27578323 BTC. The price of Bitcoin was at $9,911.21 and my account was showing a balance of $2,733.34. It was at this time that I stopped buying and started accumulating BTC by other means.
This time I was right. The price did nothing but go up, since then. I was very happy at the time. Also, I've learned my lesson. I didn't panic at any point. Even when the price started falling from its peak in April and May of this year. I always reminded myself of the main goal behind my investment. That I'm in it for the long run.
Currently, my balance stands at 0.31627981 BTC. My first HODL generated 5384% returns. And my second investment is up 540.22%. All the rest is in the green, too. Not bad, huh!
Cryptocurrency #2
For my second choice of cryptocurrency, I went with Ethereum. I first bought in on May 24, 2017. At that time 1 ETH was worth $190.05. I was optimistic. So, I purchased 2 ETH. From then I never bought ETH again. However, that doesn't mean I was against it or that I have changed my mind. I just always found ways to be paid in ETH. Mainly freelance jobs and micro-tasking. This helped me accumulate more Ethereum when the price was at its lowest during the period stretching from September 2018 to the mid-2020s. After that, you all know what happened. The price shot up and now I'm sitting on a pretty cushiony balance of 9.42518649 ETH.
From my initial investment of Ethereum I got 1,949.32% as returns.
Cryptocurrency #3
Finally, my top third cryptocurrency is Binance coin. I, initially, bought $400's worth of BNB, in June 2019. Which got me 10.30396702 BNB. I did sold 5 BNB by the end of September. Which, let me tell you, was a horrible move. I sold at a loss of 60%. I panicked and wanted to mitigate my losses. Frankly, Sometimes it just seems like I never learn from my mistakes.
After that I waited and tracked the Binance coin for a while. By early November 2020 it was appreciating in value, again. Before it spiked the first time on the 9th of February of this year. I thought it was too risky for me to get in then. Because the market was too volatile. In fact, I never touched Binance coin again. I just kept it as an asset and continued my journey in trading crypto-assets, as well as FOREX with a short-term horizon in mind.
In conclusion
I can say that it was a bumpy ride. It always have been, and it always will be. I'm at peace with that. It's true that I was massively underfunded. But it pays to play the waiting game. Thankfully, I have a strategy in place to keep me on track. Because I know that if it came to emotions, my account would've been a wreck by now.
When trading cryptocurrencies I think that it's better to divide your account in two parts: Long-term and short-term. The long-term section where you keep your best performing coins can absorb a lot of damage caused by the portion you trade on a short-term basis. It's true that diversification is good. However, you shouldn't sacrifice the well being of your account just to obtain it. Sometimes, just waiting can make a very big difference. This is why, for me, I will hold and see where things are going. I'm not planning on adding any changes to my long-term portfolio. It's perfect the way it is. The market is going through a very interesting phase. A lot of things are happening and nobody knows where things will go from here.
Disclaimer: Please don't take what I've told you as financial advice. Do your own research before engaging in any trading activity. trade safely.
