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URLhttps://calebandbrown.com/blog/crypto-investing-strategies/
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Meta TitleCommon Crypto Investing Strategies Every Investor Should Know | Caleb & Brown
Meta DescriptionFrom buying and holding long-term to day trading, there's no shortage of strategies to invest in crypto. Find one that suits your investment style here. | Caleb & Brown
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Long-Term Investing Medium to Short-Term Investing Before You Invest FAQs Make Your First Crypto Investment with Caleb & Brown Key Points Dollar cost averaging (DCA) is a strategy that involves investing regular, fixed amounts of money into an asset, as opposed to timing investments around the market trends. ā€œ Buying the dip ā€ is a common strategy in which the investor purchases an asset when its unit price is lower than average, under the assumption that the price of the asset will rise again in the future. HODL, or ā€œ hold on for dear life ā€ involves buying an asset and holding it as a long-term investment regardless of market volatility or price changes. Doing your own research (DYOR) should precede the implementation of any investment strategy—long or short term. This includes, but is not limited to, reading the white paper, learning about the founder, assessing real-world utility, developer & investor adoption, price history, and ranking. "Buy low, sell high." If only it could be so easy. The old adage ā€œit's not about timing the market, but about time in the market,ā€ has time and time again held up. While there is no one-size fits all approach to crypto investing, a sound crypto investment strategy puts you in the driver’s seat to grow your portfolio. Remove emotion (and temptation) as we cover some of the most common short-term and long-term strategies used by crypto investors today, and show you how to find an asset worth investing in. Long-Term Investing HODL Short for ā€˜hold on for dear life’, this strategy involves buying crypto and holding on to it for the long term, riding the waves of volatility in expectation of high returns over a long-term horizon. The popular crypto native term is derived from a misspelling of the word ā€œholdā€. HODLing is popular among beginner, intermediate, and advanced investors. If considering this strategy, doing thorough asset research is even more important, as it may be years before you exit your position in the market. Dollar Cost Averaging (DCA) Dollar cost averaging (DCA) — often used in conjunction with HODL — is a strategy investors use to minimise the impact of volatility without investing additional effort into timing the market . Using the DCA method, investors consistently invest fixed amounts of money into a crypto asset at regular time intervals (e.g. weekly, fortnightly, monthly). The investment is made regardless of the asset's price at the time of investing. Caleb & Brown makes dollar cost averaging simple in our client portal! Find out more Markets can be cyclical. After every bull market follows a period of decline. Bear markets eventually become bullish. Rather than trying to predict these cycles, DCA investors will purchase the same amount of crypto regardless if the price is high or low. This strategy could help nullify the impacts of volatility over time. It may also be ideal for investors interested in a more passive, set it and forget it style of investing. Diversification If you’re a risk-averse investor, diversification may be a viable strategy to help you reach your investment goals. This strategy involves holding various types of crypto assets , usually across multiple industries,within a portfolio . Holding a variety of assets helps the investor mitigate market risk since all their eggs aren’t concentrated in one basket. Diversification could help an investor weather times of extreme price volatility, as losses from one coin can be offset by potential gains of other assets within the portfolio. Also, consider holding some stablecoins to help provide liquidity for your portfolio. Stablecoins , like Tether (USDT) & USD Coin (USDC), attempt to offer relative price stability. Their market value is usually pegged to the value of a stable asset, like USD, the Euro or gold. Unlike other crypto assets, where prices can fluctuate wildly, stablecoins are designed to maintain a stable value over time. They are an essential tool to take advantage of market opportunities. Remember, if using this strategy, be wary of over-diversification, as this could lead to a portfolio that achieves average returns inline with the market as a whole. Medium to Short-Term Investing The following techniques are more advanced,involve sound research and require an objective mindset to execute properly. Buying The Dip During bear markets , it’s not uncommon to hear the question ā€œ Is the bottom in? ā€ posed by pundits, the press, and crypto enthusiasts alike. The bottom, which marks the lowest price point of an asset (or the market in general), in a market cycle, is almost impossible to predict for any investor. Buying the dip is a common strategy that investors use to capitalise during these downward trends. The strategy is simple. It involves an investor purchasing an asset when prices are lower than usual. The goal is to accumulate more crypto at this low price, under the assumption that the investor can profit if/when the price rises. When prices drop, it could lead to panic and emotions running high. If your research indicates that the downward trend of an asset could only be temporary, this strategy might be worth pursuing, aggressively, in the short term. Buying the dip often goes against overall market sentiment , as investors must be greedy when the wider market is fearful, and fearful when the market is greedy. If you can learn how to remove your emotions from the investing equation, this strategy might be ideal for you. Day Trading Out of all the strategies listed, day trading is considered the most short-term strategy an investor can implement. A strategy rooted in traditional markets, day trading is an advanced investment method that involves frequent trades on one or multiple assets throughout the course of the day. It is a high-risk, potentially high-reward strategy that leverages the inherent volatility of crypto markets to turn a profit. Crypto markets are 24/7, unlike traditional markets. Day traders usually have a very deep understanding of crypto, blockchain technology, and market trends to adapt to an ever-changing market. Day trading can seem like an attractive investment strategy for those who prefer a more active approach to investing. However, approach with caution. It carries significant risks, no matter your skill level. Before You Invest Now that you have a few investment strategies to choose from, it’s time to shortlist assets to invest in. How do you choose? It all starts with research. Do Your Own Research (DYOR) is a popular motif within the crypto community. It’s a strong reminder for investors to follow the facts, not their emotions or the opinions of others, blindly. Here are a few things to look out for when researching an asset to invest in. White Paper A crypto white paper is a publicly available document that sets out a project's goals, what problems it intends to solve and how. While reading the white paper, highlight any red flags such as: a lack of real-world utility, or legality issues. These red flags could hint at larger problems that may surface later on in the life cycle of the project. Founders and Developers After reading up on the project, search for any background information you can find about the project’s founder(s). What is their background in and out of crypto? What prior successes suggest they can achieve the objectives earmarked for this project? Is their previous experience relevant and valuable to the project? A founder’s identity by no means needs to be public. However, it’s worth noting that scams are common in crypto, with bad actors using the veil of anonymity to carry out hacks. Having a public, identifiable founder can lend credibility to a project. If you want to take your research a bit further, read up on the expertise and track record of developers attached to the project. The team should have the experience needed to achieve the goals of the project. Ranking Crypto markets are volatile . Top line rankings and measures, such as market cap,alone aren’t enough to determine the viability of an investment. Including rankings as part of your overall research is good practice as they are factual data points that can help inform your decision. For example, traders and investors use market cap as a metric to understand the value or value potential of a particular cryptocurrency. The size of an asset’s market cap can help investors make estimations about the risk profile of a particular asset, its potential for long-term growth, and its market dominance. The top crypto assets are ranked as such for a reason. Look at these projects and the value they are offering to investors. It may give you some insight into the types of projects you may want to invest in elsewhere. Project Utility A coin may be performing well right now, but is it worth investing in? Take time to research the underlying project associated with a coin. Can you clearly identify the use cases for the coin? Is the project built on a durable, tried and tested blockchain? Projects that solve a problem, disrupt an industry, or provide real-world utility are eventually priced by the value they provide. Do you see the coin having a utility that could be valuable now or in the future? Understanding the underlying goals of the project can provide insight into the potential value for investment. Liquidity Liquidity , or the ability for an asset to be quickly converted into cash or some other asset without major price fluctuations is something else to consider when investing. Larger cap coins (like Bitcoin, Ethereum, or Solana) are generally more liquid than smaller cap coins. Stablecoins are quite liquid as well. That said, it’s worth noting that stablecoins operate more like digital everyday cash. While stablecoins are not vehicles for portfolio growth, they do provide investors with an opportunity to capture and retain portfolio profits from wins. Volume Volume is often used to gauge interest in a particular asset. Higher volumes could contribute to overall higher market liquidity. When assessing this measurement for a particular coin, weigh up the volume against a select time period. Trending coins could have a high volume one day and see a drop in trading once public interest dies down. Adoption The number of active addresses on a blockchain is a fantastic indicator of a particular blockchain’s or project's daily users, shining a direct light on a project’s potential for real-world adoption. Tools like Messari make it possible to easily access key adoption indicators such as active addresses, inventories and data related to miners. As a working example, projects like Ethereum - with use cases spanning beyond digital currency to Non-fungible tokens (NFTs), gaming and the development of Decentralized Autonomous Organizations (DAOs) - sees almost 8X the active address count compared to an ecosystem like Cardano (ADA). If you want to dive deeper in research, look at data on the number of active developers on a network. High developer activity could indicate that the project will progress faster and become more useful as developers discover innovative ways to leverage the network for real-world use. Price History Even for a seasoned trader, it can be difficult to spot and identify historical trends. However, some of the original projects, like Bitcoin, have a longer history of recurring price patterns that can be used to help time your market entries and exits . You can review these price action patterns when researching assets that have been in the market for a comparatively longer time. Be aware, however, that past price performance does not indicate future performance FAQs What strategy is best for beginner investors? Even for a seasoned trader, it can be difficult to spot and identify historical trends. However, some of the original projects, like Bitcoin, have a longer history of recurring price patterns that can be used to help time your market entries and exits . You can review these price action patterns when researching assets that have been in the market for a comparatively longer time. Be aware, however, that past price performance does not indicate future performance How can I keep my crypto investment safe? Cold wallets, hot wallets and custodians are the most common ways investors can store and secure their crypto. At first, some of these storage methods may seem more complex than the traditional bank account. For investor peace of mind, Caleb & Brown provide an end-to-end custody solution for hassle-free storage. We have a battle-tested security infrastructure, through the leading asset security specialist, Fireblocks. Additionally, all clients receive a free consultation to ensure they follow security best practices. What is the Fear and Greed Index? The Fear and Greed Index is a quantifiable representation of crypto market sentiment. The most popular version, developed by alternative.me combines several indicators that help measure the levels of psychological stability (or instability) within the market. This index provides a computer-generated score between 0 and 100 to describe the current sentiment of investors. Some investors may factor the index to gauge into their decision making process on when to enter and exit the market. It’s worth noting that market sentiment— even when boiled down to a number on a scale —is still inherently subjective, given it’s based on investor psychology, and therefore not a reliable indicator on which to base your investment decisions, alone. Make Your First Crypto Investment with Caleb & Brown You don’t have to be a seasoned pro to strategically invest in crypto. Caleb & Brown is the world's leading crypto brokerage for beginner and advanced investors alike, where you can automate DCA investments or execute time-specific complex trades. Our personalised broker service makes crypto investing simple. A dedicated member of our broker team is always on hand to guide you along the way, giving you the confidence you need to navigate the world of crypto. Not to mention key features such as: No joining or signup costs Industry-leading storage solutions 24/7 customer support If you are ready to take the next step and invest, contact your crypto broker today. Not yet a client? Sign up for your free consultation .
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[Long-Term Investing](https://calebandbrown.com/blog/crypto-investing-strategies/#long-term-investing) - [Medium to Short-Term Investing](https://calebandbrown.com/blog/crypto-investing-strategies/#medium-to-short-term-investing) - [Before You Invest](https://calebandbrown.com/blog/crypto-investing-strategies/#before-you-invest) - [FAQs](https://calebandbrown.com/blog/crypto-investing-strategies/#faqs) - [Make Your First Crypto Investment with Caleb & Brown](https://calebandbrown.com/blog/crypto-investing-strategies/#make-your-first-crypto-investment-with-caleb--brown) **Key Points** - Dollar cost averaging (DCA) is a strategy that involves investing regular, fixed amounts of money into an asset, as opposed to timing investments around the market trends. - ā€œ[Buying the dip](https://www.investopedia.com/terms/b/buy-the-dips.asp)ā€ is a common strategy in which the investor purchases an asset when its unit price is lower than average, under the assumption that the price of the asset will rise again in the future. - HODL, or ā€œ[hold on for dear life](https://www.nerdwallet.com/article/investing/hodl-a-typo-takes-hold-as-a-sound-cryptocurrency-strategy)ā€ involves buying an asset and holding it as a long-term investment regardless of market volatility or price changes. - Doing your own research (DYOR) should precede the implementation of any investment strategy—long or short term. This includes, but is not limited to, reading the white paper, learning about the founder, assessing real-world utility, developer & investor adoption, price history, and ranking. "Buy low, sell high." If only it could be so easy. The old adage ā€œit's not about timing the market, but about time in the market,ā€ has time and time again held up. While there is no one-size fits all approach to crypto investing, a sound crypto investment strategy puts you in the driver’s seat to grow your portfolio. Remove emotion (and temptation) as we cover some of the most common short-term and long-term strategies used by crypto investors today, and show you how to find an asset worth investing in. ## Long-Term Investing ### HODL Short for ā€˜hold on for dear life’, this strategy involves buying crypto and holding on to it for the long term, riding the waves of volatility in expectation of high returns over a long-term horizon. The popular crypto native term is derived from a misspelling of the word ā€œholdā€. HODLing is popular among beginner, intermediate, and advanced investors. If considering this strategy, doing thorough asset research is even more important, as it may be years before you exit your position in the market. ### Dollar Cost Averaging (DCA) [Dollar cost averaging (DCA)](https://calebandbrown.com/blog/dollar-cost-averaging/)— often used in conjunction with HODL — is a strategy investors use to minimise the impact of volatility without investing additional effort into [timing the market](https://calebandbrown.com/blog/timing-or-time-in-the-market/). Using the DCA method, investors consistently invest fixed amounts of money into a crypto asset at regular time intervals (e.g. weekly, fortnightly, monthly). The investment is made regardless of the asset's price at the time of investing. ##### Caleb & Brown makes dollar cost averaging simple in our client portal\! ##### [Find out more](https://youtu.be/vkXVrCblYLA?feature=shared) Markets can be cyclical. After every bull market follows a period of decline. Bear markets eventually become bullish. Rather than trying to predict these cycles, DCA investors will purchase the same amount of crypto regardless if the price is high or low. This strategy could help nullify the impacts of volatility over time. It may also be ideal for investors interested in a more passive, set it and forget it style of investing. ### Diversification If you’re a risk-averse investor, diversification may be a viable strategy to help you reach your investment goals. This strategy involves holding [various types of crypto assets](https://calebandbrown.com/blog/types-of-crypto), usually across multiple industries,within a [portfolio](https://calebandbrown.com/blog/balanced-crypto-portfolio/). Holding a variety of assets helps the investor mitigate market risk since all their eggs aren’t concentrated in one basket. Diversification could help an investor weather times of extreme price volatility, as losses from one coin can be offset by potential gains of other assets within the portfolio. Also, consider holding some stablecoins to help provide liquidity for your portfolio. [Stablecoins](https://www.calebandbrown.com/blog/stablecoins-explained), like Tether (USDT) & USD Coin (USDC), attempt to offer relative price stability. Their market value is usually pegged to the value of a stable asset, like USD, the Euro or gold. Unlike other crypto assets, where prices can fluctuate wildly, stablecoins are designed to maintain a stable value over time. They are an essential tool to take advantage of market opportunities. Remember, if using this strategy, be wary of over-diversification, as this could lead to a portfolio that achieves average returns inline with the market as a whole. ## Medium to Short-Term Investing The following techniques are more advanced,involve sound research and require an objective mindset to execute properly. ### Buying The Dip During [bear markets](https://www.calebandbrown.com/blog/crypto-market-sentiment/), it’s not uncommon to hear the question ā€œ[Is the bottom in?](https://www.investopedia.com/terms/b/bottom.asp)ā€ posed by pundits, the press, and crypto enthusiasts alike. The bottom, which marks the lowest price point of an asset (or the market in general), in a market cycle, is almost impossible to predict for any investor. Buying the dip is a common strategy that investors use to capitalise during these downward trends. The strategy is simple. It involves an investor purchasing an asset when prices are lower than usual. The goal is to accumulate more crypto at this low price, under the assumption that the investor can profit if/when the price rises. When prices drop, it could lead to panic and emotions running high. If your research indicates that the downward trend of an asset could only be temporary, this strategy might be worth pursuing, aggressively, in the short term. Buying the dip often goes against [overall market sentiment](https://calebandbrown.com/blog/fear-and-greed-index/), as investors must be greedy when the wider market is fearful, and fearful when the market is greedy. If you can learn how to remove your emotions from the investing equation, this strategy might be ideal for you. ### Day Trading Out of all the strategies listed, day trading is considered the most short-term strategy an investor can implement. A strategy rooted in traditional markets, day trading is an advanced investment method that involves frequent trades on one or multiple assets throughout the course of the day. It is a high-risk, potentially high-reward strategy that leverages the inherent volatility of crypto markets to turn a profit. Crypto markets are 24/7, unlike traditional markets. Day traders usually have a very deep understanding of crypto, blockchain technology, and market trends to adapt to an ever-changing market. Day trading can seem like an attractive investment strategy for those who prefer a more active approach to investing. However, approach with caution. It carries significant risks, no matter your skill level. ## Before You Invest Now that you have a few investment strategies to choose from, it’s time to shortlist assets to invest in. How do you choose? It all starts with research. Do Your Own Research (DYOR) is a popular motif within the crypto community. It’s a strong reminder for investors to follow the facts, not their emotions or the opinions of others, blindly. Here are a few things to look out for when researching an asset to invest in. ### White Paper A crypto white paper is a publicly available document that sets out a project's goals, what problems it intends to solve and how. While reading the white paper, highlight any red flags such as: a lack of real-world utility, or legality issues. These red flags could hint at larger problems that may surface later on in the life cycle of the project. ### Founders and Developers After reading up on the project, search for any background information you can find about the project’s founder(s). What is their background in and out of crypto? What prior successes suggest they can achieve the objectives earmarked for this project? Is their previous experience relevant and valuable to the project? A [founder’s identity](https://www.investopedia.com/terms/s/satoshi-nakamoto.asp) by no means needs to be public. However, it’s worth noting that scams are common in crypto, with bad actors using the veil of anonymity to carry out hacks. Having a public, identifiable founder can lend credibility to a project. If you want to take your research a bit further, read up on the expertise and track record of developers attached to the project. The team should have the experience needed to achieve the goals of the project. ### Ranking Crypto markets are [volatile](https://calebandbrown.com/blog/crypto-volatility/). Top line rankings and measures, such as market cap,alone aren’t enough to determine the viability of an investment. Including rankings as part of your overall research is good practice as they are factual data points that can help inform your decision. For example, traders and investors use market cap as a metric to understand the value or value potential of a particular cryptocurrency. The size of an asset’s market cap can help investors make estimations about the risk profile of a particular asset, its potential for long-term growth, and its market dominance. The [top crypto assets](https://coinmarketcap.com/) are ranked as such for a reason. Look at these projects and the value they are offering to investors. It may give you some insight into the types of projects you may want to invest in elsewhere. ### Project Utility A coin may be performing well right now, but is it worth investing in? Take time to research the underlying project associated with a coin. Can you clearly identify the use cases for the coin? Is the project built on a durable, tried and tested blockchain? Projects that solve a problem, disrupt an industry, or provide real-world utility are eventually priced by the value they provide. Do you see the coin having a utility that could be valuable now or in the future? Understanding the underlying goals of the project can provide insight into the potential value for investment. ### Liquidity [Liquidity](https://calebandbrown.com/blog/crypto-liquidity/), or the ability for an asset to be quickly converted into cash or some other asset without major price fluctuations is something else to consider when investing. Larger cap coins (like Bitcoin, Ethereum, or Solana) are generally more liquid than smaller cap coins. Stablecoins are quite liquid as well. That said, it’s worth noting that stablecoins operate more like digital everyday cash. While stablecoins are not vehicles for portfolio growth, they do provide investors with an opportunity to capture and retain portfolio profits from wins. ### Volume Volume is often used to gauge interest in a particular asset. Higher volumes could contribute to overall higher market liquidity. When assessing this measurement for a particular coin, weigh up the volume against a select time period. Trending coins could have a high volume one day and see a drop in trading once public interest dies down. ### Adoption The number of active addresses on a blockchain is a fantastic indicator of a particular blockchain’s or project's daily users, shining a direct light on a project’s potential for real-world adoption. Tools like Messari make it possible to easily access key adoption indicators such as active addresses, inventories and data related to miners. As a working example, projects like Ethereum - with use cases spanning beyond digital currency to Non-fungible tokens (NFTs), gaming and the development of Decentralized Autonomous Organizations (DAOs) - sees almost 8X the active address count compared to an ecosystem like Cardano (ADA). If you want to dive deeper in research, look at data on the number of active developers on a network. High developer activity could indicate that the project will progress faster and become more useful as developers discover innovative ways to leverage the network for real-world use. ### Price History Even for a seasoned trader, it can be difficult to spot and identify historical trends. However, some of the original projects, like Bitcoin, have a longer history of recurring price patterns that can be used to help time your market entries and exits . You can review these price action patterns when researching assets that have been in the market for a comparatively longer time. Be aware, however, that past price performance does not indicate future performance ## FAQs ### What strategy is best for beginner investors? Even for a seasoned trader, it can be difficult to spot and identify historical trends. However, some of the original projects, like Bitcoin, have a longer history of recurring price patterns that can be used to help time your market entries and exits . You can review these price action patterns when researching assets that have been in the market for a comparatively longer time. Be aware, however, that past price performance does not indicate future performance ### How can I keep my crypto investment safe? [Cold wallets, hot wallets and custodians](https://calebandbrown.com/blog/crypto-security-best-practices/) are the most common ways investors can store and secure their crypto. At first, some of these storage methods may seem more complex than the traditional bank account. For investor peace of mind, Caleb & Brown provide an end-to-end custody solution for hassle-free storage. We have a battle-tested security infrastructure, through the leading asset security specialist, Fireblocks. Additionally, all clients receive a free consultation to ensure they follow security best practices. ### What is the Fear and Greed Index? The [Fear and Greed Index](https://calebandbrown.com/blog/fear-and-greed-index/) is a quantifiable representation of crypto market sentiment. The most popular version, developed by alternative.me combines several indicators that help measure the levels of psychological stability (or instability) within the market. This index provides a computer-generated score between 0 and 100 to describe the current sentiment of investors. Some investors may factor the index to gauge into their decision making process on when to enter and exit the market. It’s worth noting that market sentiment— even when boiled down to a number on a scale —is still inherently subjective, given it’s based on investor psychology, and therefore not a reliable indicator on which to base your investment decisions, alone. ## Make Your First Crypto Investment with Caleb & Brown You don’t have to be a seasoned pro to strategically invest in crypto. Caleb & Brown is the world's leading crypto brokerage for beginner and advanced investors alike, where you can automate DCA investments or execute time-specific complex trades. Our personalised broker service makes crypto investing simple. A dedicated member of our broker team is always on hand to guide you along the way, giving you the confidence you need to navigate the world of crypto. Not to mention key features such as: - No joining or signup costs - Industry-leading storage solutions - 24/7 customer support If you are ready to take the next step and invest, contact your crypto broker today. Not yet a client? Sign up for your [free consultation](https://app.calebandbrown.com/signup). Disclaimer: This assessment does not consider your personal circumstances, and should not be construed as financial, legal or investment advice. These thoughts are ours only and should only be taken as educational by the reader. Under no circumstances do we make recommendation or assurance towards the views expressed in the blog-post. Past performance is not a reliable indicator of future results. The Company disclaims all duties and liabilities, including liability for negligence, for any loss or damage which is suffered or incurred by any person acting on any information provided. Take the next step in your crypto journeyJoin thousands of investors who enjoy personalised service from Caleb & Brown Cryptocurrency Brokerage. [Get started today](https://app.calebandbrown.com/signup?utm_source=%28direct%29&utm_medium=%28none%29&utm_campaign=blog_crypto-investing-strategies&utm_content=cta_sidebar) [Resources](https://calebandbrown.com/resources/)\> [Blog](https://calebandbrown.com/blog-categories/)\> [Investing](https://calebandbrown.com/blog-categories/investing/) Start Your Crypto Journey TodayGet a personal crypto broker to help you trade with clarity and confidence. 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[View more](https://calebandbrown.com/blog-categories/investing/) Previous [![](data:image/svg+xml;charset=utf-8,%3Csvg%20height='1080'%20width='1920'%20xmlns='http://www.w3.org/2000/svg'%20version='1.1'%3E%3C/svg%3E) ![](https://calebandbrown.com/_gatsby/image/d9b27e4f5f8323ccd724a0716b708f79/845214dd519a076a4051f25f81c7777b/Cover2.jpg?u=https%3A%2F%2Fimages.ctfassets.net%2F4ua9vnmkuhzj%2F3nHeUb2slH8QmSyoSRA2Y8%2Ff88df5ee49de01f26b7bd9f6bf435a58%2FCover2.jpg&a=w%3D480%26h%3D270%26fm%3Djpg%26q%3D80&cd=2022-10-05T10%3A31%3A08.890Z) ![](https://calebandbrown.com/_gatsby/image/d9b27e4f5f8323ccd724a0716b708f79/845214dd519a076a4051f25f81c7777b/Cover2.jpg?u=https%3A%2F%2Fimages.ctfassets.net%2F4ua9vnmkuhzj%2F3nHeUb2slH8QmSyoSRA2Y8%2Ff88df5ee49de01f26b7bd9f6bf435a58%2FCover2.jpg&a=w%3D480%26h%3D270%26fm%3Djpg%26q%3D80&cd=2022-10-05T10%3A31%3A08.890Z)Caleb & Brown - 4 Mins Crypto Portfolio Basics: The Key to a Well-Balanced Portfolio in 2026 A well-balanced crypto portfolio could help you maximise your returns while mitigating risk. Learn how to build a balanced and diversified portfolio here. 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Discover benefits like portfolio diversification, tax advantages, and simple setup with Caleb & Brown. 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Read more](https://calebandbrown.com/blog/corporate-trustee-smsf/) [Investing](https://calebandbrown.com/blog-categories/investing/) [![](data:image/svg+xml;charset=utf-8,%3Csvg%20height='1080'%20width='1920'%20xmlns='http://www.w3.org/2000/svg'%20version='1.1'%3E%3C/svg%3E) ![](https://calebandbrown.com/_gatsby/image/ec8fccb7d7e0dd2fb27228c91a094cca/2ac8efbfa50ca2b1d51603e0dec91c3b/C&B182%20SMSFs%20Blog%20Tiles_v2A.png?u=https%3A%2F%2Fimages.ctfassets.net%2F4ua9vnmkuhzj%2F67EPcinrkDwhBgt5ZMRAUG%2F91cbf662a3206be5303fd259450b66ab%2FC_B182_SMSFs_Blog_Tiles_v2A.png&a=w%3D480%26h%3D270%26fm%3Dpng%26q%3D80&cd=2025-02-10T01%3A07%3A50.866Z) ![](https://calebandbrown.com/_gatsby/image/ec8fccb7d7e0dd2fb27228c91a094cca/2ac8efbfa50ca2b1d51603e0dec91c3b/C&B182%20SMSFs%20Blog%20Tiles_v2A.png?u=https%3A%2F%2Fimages.ctfassets.net%2F4ua9vnmkuhzj%2F67EPcinrkDwhBgt5ZMRAUG%2F91cbf662a3206be5303fd259450b66ab%2FC_B182_SMSFs_Blog_Tiles_v2A.png&a=w%3D480%26h%3D270%26fm%3Dpng%26q%3D80&cd=2025-02-10T01%3A07%3A50.866Z)Olivia Long from SMSFAI - 3 Mins Why SMSFs are the Future for Younger Generations With the help of Self-Managed Super Fund (SMSF) expert, Olivia Long, we dive into why SMSFs are becoming the super fund of choice for the younger, forward-thinking generations in Australia. Read more](https://calebandbrown.com/blog/smsfs-for-younger-generations/) [Investing](https://calebandbrown.com/blog-categories/investing/) [![](data:image/svg+xml;charset=utf-8,%3Csvg%20height='1080'%20width='1920'%20xmlns='http://www.w3.org/2000/svg'%20version='1.1'%3E%3C/svg%3E) ![](https://calebandbrown.com/_gatsby/image/a61fd0681770c7855d9492f2956b9f4c/845214dd519a076a4051f25f81c7777b/DCAcover2.jpg?u=https%3A%2F%2Fimages.ctfassets.net%2F4ua9vnmkuhzj%2FQBv2Bo2DdSFFJcfIAz1J7%2Fcac39bc41d2cd2ccb75dab717a895fd2%2FDCAcover2.jpg&a=w%3D480%26h%3D270%26fm%3Djpg%26q%3D80&cd=2022-10-25T23%3A36%3A34.657Z) ![](https://calebandbrown.com/_gatsby/image/a61fd0681770c7855d9492f2956b9f4c/845214dd519a076a4051f25f81c7777b/DCAcover2.jpg?u=https%3A%2F%2Fimages.ctfassets.net%2F4ua9vnmkuhzj%2FQBv2Bo2DdSFFJcfIAz1J7%2Fcac39bc41d2cd2ccb75dab717a895fd2%2FDCAcover2.jpg&a=w%3D480%26h%3D270%26fm%3Djpg%26q%3D80&cd=2022-10-25T23%3A36%3A34.657Z)Caleb & Brown - 6 Mins A Guide to Dollar Cost Averaging in Crypto Dollar cost averaging is a common strategy implemented by beginner and seasoned investors alike. Discover how it works here. 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A Guide to Crypto Taxation in US & Australia If you're a cryptocurrency investor, it's essential that you understand the tax implications of your crypto activities. Here we will delve into the complex world of crypto taxation, with a focus on rules relevant for US and Australian taxpayers. 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- [Long-Term Investing](https://calebandbrown.com/blog/crypto-investing-strategies/#long-term-investing) - [Medium to Short-Term Investing](https://calebandbrown.com/blog/crypto-investing-strategies/#medium-to-short-term-investing) - [Before You Invest](https://calebandbrown.com/blog/crypto-investing-strategies/#before-you-invest) - [FAQs](https://calebandbrown.com/blog/crypto-investing-strategies/#faqs) - [Make Your First Crypto Investment with Caleb & Brown](https://calebandbrown.com/blog/crypto-investing-strategies/#make-your-first-crypto-investment-with-caleb--brown) **Key Points** - Dollar cost averaging (DCA) is a strategy that involves investing regular, fixed amounts of money into an asset, as opposed to timing investments around the market trends. - ā€œ[Buying the dip](https://www.investopedia.com/terms/b/buy-the-dips.asp)ā€ is a common strategy in which the investor purchases an asset when its unit price is lower than average, under the assumption that the price of the asset will rise again in the future. - HODL, or ā€œ[hold on for dear life](https://www.nerdwallet.com/article/investing/hodl-a-typo-takes-hold-as-a-sound-cryptocurrency-strategy)ā€ involves buying an asset and holding it as a long-term investment regardless of market volatility or price changes. - Doing your own research (DYOR) should precede the implementation of any investment strategy—long or short term. This includes, but is not limited to, reading the white paper, learning about the founder, assessing real-world utility, developer & investor adoption, price history, and ranking. "Buy low, sell high." If only it could be so easy. The old adage ā€œit's not about timing the market, but about time in the market,ā€ has time and time again held up. While there is no one-size fits all approach to crypto investing, a sound crypto investment strategy puts you in the driver’s seat to grow your portfolio. Remove emotion (and temptation) as we cover some of the most common short-term and long-term strategies used by crypto investors today, and show you how to find an asset worth investing in. ## Long-Term Investing ### HODL Short for ā€˜hold on for dear life’, this strategy involves buying crypto and holding on to it for the long term, riding the waves of volatility in expectation of high returns over a long-term horizon. The popular crypto native term is derived from a misspelling of the word ā€œholdā€. HODLing is popular among beginner, intermediate, and advanced investors. If considering this strategy, doing thorough asset research is even more important, as it may be years before you exit your position in the market. ### Dollar Cost Averaging (DCA) [Dollar cost averaging (DCA)](https://calebandbrown.com/blog/dollar-cost-averaging/)— often used in conjunction with HODL — is a strategy investors use to minimise the impact of volatility without investing additional effort into [timing the market](https://calebandbrown.com/blog/timing-or-time-in-the-market/). Using the DCA method, investors consistently invest fixed amounts of money into a crypto asset at regular time intervals (e.g. weekly, fortnightly, monthly). The investment is made regardless of the asset's price at the time of investing. ##### Caleb & Brown makes dollar cost averaging simple in our client portal\! ##### [Find out more](https://youtu.be/vkXVrCblYLA?feature=shared) Markets can be cyclical. After every bull market follows a period of decline. Bear markets eventually become bullish. Rather than trying to predict these cycles, DCA investors will purchase the same amount of crypto regardless if the price is high or low. This strategy could help nullify the impacts of volatility over time. It may also be ideal for investors interested in a more passive, set it and forget it style of investing. ### Diversification If you’re a risk-averse investor, diversification may be a viable strategy to help you reach your investment goals. This strategy involves holding [various types of crypto assets](https://calebandbrown.com/blog/types-of-crypto), usually across multiple industries,within a [portfolio](https://calebandbrown.com/blog/balanced-crypto-portfolio/). Holding a variety of assets helps the investor mitigate market risk since all their eggs aren’t concentrated in one basket. Diversification could help an investor weather times of extreme price volatility, as losses from one coin can be offset by potential gains of other assets within the portfolio. Also, consider holding some stablecoins to help provide liquidity for your portfolio. [Stablecoins](https://www.calebandbrown.com/blog/stablecoins-explained), like Tether (USDT) & USD Coin (USDC), attempt to offer relative price stability. Their market value is usually pegged to the value of a stable asset, like USD, the Euro or gold. Unlike other crypto assets, where prices can fluctuate wildly, stablecoins are designed to maintain a stable value over time. They are an essential tool to take advantage of market opportunities. Remember, if using this strategy, be wary of over-diversification, as this could lead to a portfolio that achieves average returns inline with the market as a whole. ## Medium to Short-Term Investing The following techniques are more advanced,involve sound research and require an objective mindset to execute properly. ### Buying The Dip During [bear markets](https://www.calebandbrown.com/blog/crypto-market-sentiment/), it’s not uncommon to hear the question ā€œ[Is the bottom in?](https://www.investopedia.com/terms/b/bottom.asp)ā€ posed by pundits, the press, and crypto enthusiasts alike. The bottom, which marks the lowest price point of an asset (or the market in general), in a market cycle, is almost impossible to predict for any investor. Buying the dip is a common strategy that investors use to capitalise during these downward trends. The strategy is simple. It involves an investor purchasing an asset when prices are lower than usual. The goal is to accumulate more crypto at this low price, under the assumption that the investor can profit if/when the price rises. When prices drop, it could lead to panic and emotions running high. If your research indicates that the downward trend of an asset could only be temporary, this strategy might be worth pursuing, aggressively, in the short term. Buying the dip often goes against [overall market sentiment](https://calebandbrown.com/blog/fear-and-greed-index/), as investors must be greedy when the wider market is fearful, and fearful when the market is greedy. If you can learn how to remove your emotions from the investing equation, this strategy might be ideal for you. ### Day Trading Out of all the strategies listed, day trading is considered the most short-term strategy an investor can implement. A strategy rooted in traditional markets, day trading is an advanced investment method that involves frequent trades on one or multiple assets throughout the course of the day. It is a high-risk, potentially high-reward strategy that leverages the inherent volatility of crypto markets to turn a profit. Crypto markets are 24/7, unlike traditional markets. Day traders usually have a very deep understanding of crypto, blockchain technology, and market trends to adapt to an ever-changing market. Day trading can seem like an attractive investment strategy for those who prefer a more active approach to investing. However, approach with caution. It carries significant risks, no matter your skill level. ## Before You Invest Now that you have a few investment strategies to choose from, it’s time to shortlist assets to invest in. How do you choose? It all starts with research. Do Your Own Research (DYOR) is a popular motif within the crypto community. It’s a strong reminder for investors to follow the facts, not their emotions or the opinions of others, blindly. Here are a few things to look out for when researching an asset to invest in. ### White Paper A crypto white paper is a publicly available document that sets out a project's goals, what problems it intends to solve and how. While reading the white paper, highlight any red flags such as: a lack of real-world utility, or legality issues. These red flags could hint at larger problems that may surface later on in the life cycle of the project. ### Founders and Developers After reading up on the project, search for any background information you can find about the project’s founder(s). What is their background in and out of crypto? What prior successes suggest they can achieve the objectives earmarked for this project? Is their previous experience relevant and valuable to the project? A [founder’s identity](https://www.investopedia.com/terms/s/satoshi-nakamoto.asp) by no means needs to be public. However, it’s worth noting that scams are common in crypto, with bad actors using the veil of anonymity to carry out hacks. Having a public, identifiable founder can lend credibility to a project. If you want to take your research a bit further, read up on the expertise and track record of developers attached to the project. The team should have the experience needed to achieve the goals of the project. ### Ranking Crypto markets are [volatile](https://calebandbrown.com/blog/crypto-volatility/). Top line rankings and measures, such as market cap,alone aren’t enough to determine the viability of an investment. Including rankings as part of your overall research is good practice as they are factual data points that can help inform your decision. For example, traders and investors use market cap as a metric to understand the value or value potential of a particular cryptocurrency. The size of an asset’s market cap can help investors make estimations about the risk profile of a particular asset, its potential for long-term growth, and its market dominance. The [top crypto assets](https://coinmarketcap.com/) are ranked as such for a reason. Look at these projects and the value they are offering to investors. It may give you some insight into the types of projects you may want to invest in elsewhere. ### Project Utility A coin may be performing well right now, but is it worth investing in? Take time to research the underlying project associated with a coin. Can you clearly identify the use cases for the coin? Is the project built on a durable, tried and tested blockchain? Projects that solve a problem, disrupt an industry, or provide real-world utility are eventually priced by the value they provide. Do you see the coin having a utility that could be valuable now or in the future? Understanding the underlying goals of the project can provide insight into the potential value for investment. ### Liquidity [Liquidity](https://calebandbrown.com/blog/crypto-liquidity/), or the ability for an asset to be quickly converted into cash or some other asset without major price fluctuations is something else to consider when investing. Larger cap coins (like Bitcoin, Ethereum, or Solana) are generally more liquid than smaller cap coins. Stablecoins are quite liquid as well. That said, it’s worth noting that stablecoins operate more like digital everyday cash. While stablecoins are not vehicles for portfolio growth, they do provide investors with an opportunity to capture and retain portfolio profits from wins. ### Volume Volume is often used to gauge interest in a particular asset. Higher volumes could contribute to overall higher market liquidity. When assessing this measurement for a particular coin, weigh up the volume against a select time period. Trending coins could have a high volume one day and see a drop in trading once public interest dies down. ### Adoption The number of active addresses on a blockchain is a fantastic indicator of a particular blockchain’s or project's daily users, shining a direct light on a project’s potential for real-world adoption. Tools like Messari make it possible to easily access key adoption indicators such as active addresses, inventories and data related to miners. As a working example, projects like Ethereum - with use cases spanning beyond digital currency to Non-fungible tokens (NFTs), gaming and the development of Decentralized Autonomous Organizations (DAOs) - sees almost 8X the active address count compared to an ecosystem like Cardano (ADA). If you want to dive deeper in research, look at data on the number of active developers on a network. High developer activity could indicate that the project will progress faster and become more useful as developers discover innovative ways to leverage the network for real-world use. ### Price History Even for a seasoned trader, it can be difficult to spot and identify historical trends. However, some of the original projects, like Bitcoin, have a longer history of recurring price patterns that can be used to help time your market entries and exits . You can review these price action patterns when researching assets that have been in the market for a comparatively longer time. Be aware, however, that past price performance does not indicate future performance ## FAQs ### What strategy is best for beginner investors? Even for a seasoned trader, it can be difficult to spot and identify historical trends. However, some of the original projects, like Bitcoin, have a longer history of recurring price patterns that can be used to help time your market entries and exits . You can review these price action patterns when researching assets that have been in the market for a comparatively longer time. Be aware, however, that past price performance does not indicate future performance ### How can I keep my crypto investment safe? [Cold wallets, hot wallets and custodians](https://calebandbrown.com/blog/crypto-security-best-practices/) are the most common ways investors can store and secure their crypto. At first, some of these storage methods may seem more complex than the traditional bank account. For investor peace of mind, Caleb & Brown provide an end-to-end custody solution for hassle-free storage. We have a battle-tested security infrastructure, through the leading asset security specialist, Fireblocks. Additionally, all clients receive a free consultation to ensure they follow security best practices. ### What is the Fear and Greed Index? The [Fear and Greed Index](https://calebandbrown.com/blog/fear-and-greed-index/) is a quantifiable representation of crypto market sentiment. The most popular version, developed by alternative.me combines several indicators that help measure the levels of psychological stability (or instability) within the market. This index provides a computer-generated score between 0 and 100 to describe the current sentiment of investors. Some investors may factor the index to gauge into their decision making process on when to enter and exit the market. It’s worth noting that market sentiment— even when boiled down to a number on a scale —is still inherently subjective, given it’s based on investor psychology, and therefore not a reliable indicator on which to base your investment decisions, alone. ## Make Your First Crypto Investment with Caleb & Brown You don’t have to be a seasoned pro to strategically invest in crypto. Caleb & Brown is the world's leading crypto brokerage for beginner and advanced investors alike, where you can automate DCA investments or execute time-specific complex trades. Our personalised broker service makes crypto investing simple. A dedicated member of our broker team is always on hand to guide you along the way, giving you the confidence you need to navigate the world of crypto. Not to mention key features such as: - No joining or signup costs - Industry-leading storage solutions - 24/7 customer support If you are ready to take the next step and invest, contact your crypto broker today. Not yet a client? Sign up for your [free consultation](https://app.calebandbrown.com/signup).
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