How To Play Your Crypto Coins Amidst The Tectonic Changes

February 11, 2025 (Investorideas.com Newswire) Cryptocurrency may not have been devised as a form of investment, and most crypto coins have functional uses, but the main function of today's cryptocurrency industry is as an investment vehicle.

Cryptocurrency is highly volatile and while this does mean it carries considerable risk, it also means it offers exceptional opportunity for profits. Investors do need to take care to try and avoid some of the big price drops that can be seen, however, and this is best achieved by using investment strategies straight from the traditional investment playbook.

Cryptocurrency Popularity

There are more than 17,000 cryptocurrencies available today. This includes general coins, meme coins, stablecoins, and utility coins. They are used for everything from sending money to friends, paying for the development of apps on decentralized blockchain networks, and paying for goods and services.

They are especially popular as an alternative to traditional payment systems, used on e-commerce websites as well as dedicated sites like bitcoin live casino sites where they offer instant transfers and access to transparent and fair games. Also, their increased use in daily shopping activities - you can pay your coffee with cryptocurrencies - and vital sectors such as real estate (people are already buying properties using Bitcoin) is a sign we should all learn more about this emerging economic power.

Diversify Your Investments

One of the most important investment and trading strategies in any form of investment is to diversify. Diversification helps minimize risk because if one investment performs badly, you have other investments that will pick up the slack.

Diversification means more than splitting your investment bank and putting half into one stock and half into another. You should have a portfolio of multiple investments, typically made up of a majority of low-risk investments that offer a steady return, and a smaller amount of high-risk, high-reward investments.

Cryptocurrency falls under this latter category. Its volatility means it does carry a lot of risk, but it can also offer considerable rewards for the right investment. Beyond that, your crypto portfolio should also be diversified which means investing in a range of different crypto opportunities.

ETFs

Exchange Traded Funds (ETFs) were only launched at the beginning of 2024. This led to price increases across the cryptocurrency board, as billions of dollars of institutional money were invested in the market. Currently, only Bitcoin and Ether have been given their own ETFs, but this seems likely to expand soon.

ETFs do a lot of the diversification for you, and they can generate a reasonable return over the long term. Research the fund manager, fund specifics, and performance, to help find one with a history of performing well.

Crypto Stocks

One of the key features of cryptocurrencies is that they are decentralized. As such, the groups behind them tend to shy away from major markets and are unlikely to float on stock exchanges.

However, there are crypto-related companies that are listed. NVIDIA is very well known in the trading world and over the past five years, it has outperformed Bitcoin. It is also responsible for manufacturing chips and processors, which are used in the mining process. Other companies that can be considered relevant to the crypto industry are Block, Riot Blockchain, and, perhaps most significantly, Coinbase.

Coinbase is one of the largest cryptocurrency exchanges in the world and is only likely to become more popular as more money comes into the crypto market.

Stablecoins As Forex Investments

Stablecoins are a good hedge against the volatility of cryptocurrency because they are tied to the value of the dollar or other major currencies. This also means that stablecoins can be used as a means of investing in currencies without having to go near the forex market.

If you want to invest in Pounds, buy Binance GBP. If you want to invest in the dollar, buy USD Tether or another dollar stablecoin. There are even stablecoins tied to the value of commodities and other assets like gold and gas.

Check the stablecoins to ensure they hold a decent portion of invested money in the currency or asset they are tied to.

High-Risk Meme Coins

Your level of risk tolerance will determine how much of your portfolio is invested in high-risk investments. Generally, experts recommend that no more than 10% of a portfolio be placed into risky investments.

This same principle can be applied to your crypto investments, and in the crypto industry, two of the riskiest investments are meme coins and presales or ICOs. Meme coins have no utility and their prices and success are community driven.

You can lose money very easily with these coins, but if you look at the likes of Dogecoin, you can also make substantial gains if you get into the right coin at the right time.

Presales and ICOs are new projects that have not yet been fully integrated into the market. They are not usually found on centralized exchanges, but a listing on one of these sites can propel prices upward very quickly.

Hold Some Bitcoin

Bitcoin is the one cryptocurrency that rules them all. It is unusual for other coins to directly oppose Bitcoin's price movements, although it can happen. It is worth considering that when most people think of cryptocurrency they think of Bitcoin and when Presidents talk of setting up strategic cryptocurrency reserves, they are generally referring to Bitcoin.

Bitcoin is where institutional and investment fund money is most likely to go, which means it is the most likely to see its prices increase. As such, most crypto investment experts recommend that investors hold at least a portion of their crypto portfolio as Bitcoin.

DeFi Lending Platforms

DeFi lending platforms act as intermediaries between borrowers and lenders. They use smart contracts to facilitate deals and borrowers are not vetted or judged on credit rating or other factors. Borrowers can borrow an amount of cryptocurrency from pools or individual lenders and pay a fee for the privilege. The lender receives the crypto they loaned back, as well as the agreed fee when the loan comes to term.

There are risks for lenders and borrowers, not least the fact that the crypto asset could be worth less when the loan ends than when it started, leaving the borrower to find the additional funds, but you can also earn passive income from DeFi lending, reducing the risk generally associated with such new-tech investments.

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