Read this first
This is a description, not a recommendation
What follows is an account of how I personally approach a volatile and largely unregulated market. It is not advice, it is not a strategy anyone should copy, and it carries a real risk of losing money. Cryptocurrency prices can fall a long way and stay there. Never commit money you cannot afford to lose entirely, and speak to a qualified adviser before making investment decisions.
With that said, I think there is more value in showing the reasoning behind an approach than in writing about the market from a safe distance. The two approaches below serve completely different purposes and carry completely different levels of risk.
Long term, conservative
Selected projects held for years rather than months, chosen because I understand what they are trying to do and believe the problem is worth solving.
Short term, higher risk
Small, disciplined positions aiming for modest gains, with strict rules about what gets reinvested and what comes off the table.
The long-term approach
The long-term position is the one I think about least often, which is rather the point. It involves holding selected cryptocurrencies through to somewhere between 2030 and 2035.
Why such a long horizon
A window that long allows the market to mature. Blockchain technology is still being integrated into industries that move slowly, and the timescales of financial infrastructure are measured in years, not quarters. A five to ten year view gives that process room to happen. It also removes the temptation to react to every headline, which is where most damage gets done.
Research comes before conviction
The single most useful habit is doing proper research on anything before buying it. Not price research, but understanding what the project is for, who is behind it and what problem it claims to solve. Investing in something you actually believe in makes you far more patient when the market turns, because you know why you are there. Without that, every downturn feels like a reason to sell.
The landscape is still early
Despite having existed for well over a decade, cryptocurrency and blockchain remain at an early stage of genuine adoption. Most people still do not use them, and most institutions are still deciding how to. As more of both become comfortable with the technology, the room for growth is substantial. That is an argument for patience, though it is not a guarantee of anything.
The three I hold
Cross-border payments
Built to make international payments fast and inexpensive. Its partnerships with major financial institutions and continued network development suggest it could become a meaningful part of how money moves between countries.
Bridging financial gaps
Stellar Lumens aims to connect financial systems, particularly in developing regions, by providing low-cost financial services. Its focus on inclusion, and its partnerships, give it a clear purpose beyond speculation.
Rigorous by design
Cardano is known for its scientific approach to development, with a strong emphasis on security, scalability and sustainability. It aims to provide solid infrastructure for decentralised applications and smart contracts.
The short-term approach
This is the riskier half, and I want to be direct about that. It aims for gains of roughly seven to ten per cent on small positions, invested weekly, with profits taken and only the original amount reinvested.
Considerably higher risk
Short-term trading in crypto is closer to speculation than investment. Most people who attempt it lose money. The rules below exist specifically to limit the damage when it goes wrong, which it regularly does.
A market that never sleeps
Crypto markets run twenty four hours a day, seven days a week. That either demands constant attention or a way of working without it. Limit orders solve most of this. They let you set the price at which you are willing to buy or sell, and then let the market come to you rather than the other way around.
Spread the risk, take the profit
Avoid putting everything into one coin. Splitting an investment across three different coins reduces the chance of a single bad decision costing you all of it. When one of them yields a profit, take the gain and reinvest only the original capital. The discipline of separating your stake from your winnings is what keeps a bad week from becoming a bad year. And always be prepared for the possibility of losing the investment entirely.
Patience over panic
If you end up holding a coin that has fallen, the instinct is to sell and stop the discomfort. Markets do often recover over time, and panic selling has a habit of turning a paper loss into a real one. Waiting frequently produces the better outcome, provided the position was small enough that waiting is bearable.
Timing, and knowing when to walk away
Avoid panic buying. If a coin nearly reaches your limit order and then jumps five per cent, it is usually better to let it go than to chase it. Either wait for the price to come back, or move on to something else with potential. Discipline matters more than any individual trade, and the trades you decline are as important as the ones you make.
Meme coins in the short term
Meme coins such as Pepe, Shiba Inu, Bonk, Boba and FLOKI have shown the potential for meaningful short-term movement. Their volatility can create profitable swings within weeks, which is exactly what makes them suitable for quick trades and completely unsuitable for anything else. The same volatility works in both directions, and there is usually nothing underneath to stop a fall.
What I have learned
The rules matter more than the picks
Choosing well is helpful. Deciding in advance what you will do when you are wrong is what actually protects you.
Boredom is a feature
The long-term position works precisely because I do very little with it. Activity feels productive and usually is not.
Understanding beats conviction
Believing strongly in something you cannot explain is not conviction. It is exposure you have not measured.
Size the position for the worst case
The right question is never how much this could make. It is whether you would be fine if it went to zero.
Disclaimer
- This site is for informational purposes only.
- It is not intended as financial or investment advice, but simply as a perspective on a sector.
- The opinions expressed here are my own and do not reflect the views of my employers or the companies I am involved with.
- The content is not intended to be a substitute for professional advice. Always seek the advice of qualified professionals with any questions you may have regarding any information presented here.
- I make no representations as to the accuracy, completeness or validity of any information on this site, and will not be liable for any errors, omissions, or any losses, injuries or damages arising from its display or use.