How To Secure Your Crypto Investments: Here Are 4 Tips You Can Check Out

Remember to invest and not trade – top crypto assets typically attain new highs in subsequent cycles. So, keep your assets intact and be patient with your investment.

For each crypto asset you own, define your price targets and be ready to embrace its volatility.

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In the vast ocean of investments, digital assets are like new land masses on the horizon and the thrill of its discovery is palpable. But just as the early explorers learned to navigate treacherous waters, today’s crypto investors must chart their courses with caution and care.

From my experience as an investor and in running a business in this field, I believe that the following tools will help you safeguard your journey in this realm.

Assessing your risks and allocation

Investment is inherently about embracing risk for the promise of reward. Just as wise navigators set up safety rails, you must understand your risk tolerance — your appetite, capacity, and need for risk. For most, especially if your treasure chest is not overflowing, the crypto allocation should be less than 5 per cent of your portfolio. Anchor the rest in the diversified waters of equity, bonds, mutual funds, and others.

Within crypto, there is merit to keeping more than 80 per cent of your portfolio in the large caps (Bitcoin, Ethereum and Solana) with minimal allocation for wagering in meme coins or other altcoins.

Preserving your capital and planning your exits

Crypto is a volatile asset class with tremendous potential to grow over the years. Imagine sailing the high seas and encountering the giant snake in ‘Snakes and Ladders’ that sends you spiralling back to the start. To avoid this in investing, preserving your initial capital is paramount. To continue your crypto journey in a healthy way, you must take out your initial capital in a planned manner.

One strategy to adopt is this: If your capital of INR 100 grows by 50 per cent, you could easily pull out your principal (INR 100) and reinvest the profit (INR 50) in the asset class. This way, you negate the risk of a large decline while benefitting from gains in your portfolio.

For each crypto asset you own, define your price targets and be ready to embrace its volatility. Do not be swayed by stories of massive investments or gains others make – they usually form less than 1 per cent of the users. You can be peaceful and successful with moderate gains over time.

Timing the market: The art of the tactical retreat

While every sailor dreams of catching the perfect wind at the right time, the market’s waves are unpredictable. It is common to hear tales of missed opportunities—like not buying Bitcoin at $16,000 last year. Yet, it is wiser to cost average your entries as you wait for the storm to pass or when prices stabilise. The crypto market moves in 4-year cycles and bull runs potentially last for 18 months – we are still in the early stages of the current cycle.

Remember to invest and not trade – top crypto assets typically attain new highs in subsequent cycles. So, keep your assets intact and be patient with your investment.

Avoid scams and safeguard your assets

Scammers are the pirates of the crypto world, craftily designed to plunder your wealth. OTP-based scams are plaguing our wider financial system and are becoming commonplace in crypto too. It is up to us to be vigilant while sharing info with others.

Always verify the URLs you interact with – multiple copies of similar domains can confuse you and even drain your capital. Trust no ‘promise of treasure’ messages sent via social media platforms especially.

Indian exchanges that are FIU-registered abide by local regulations and have established support teams to help you out in case of an issue. Use private wallets to store your assets only if you are sure of taking abundant caution – else Indian exchanges are your best bet.

As we continue to explore the exciting world of crypto, remember that like any grand voyage, the key to success lies in preparation, prudence, and a keen awareness of one’s surroundings. Sail wisely, protect your assets, and let the winds of cautious optimism guide you to the shores of prosperity.

(The author is the CEO of Giottus Crypto Platform)

Disclaimer: The opinions, beliefs, and views expressed by the various authors and forum participants on this website are personal and do not reflect the opinions, beliefs, and views of ABP Network Pvt. Ltd. Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. Cryptocurrency is not a legal tender and is subject to market risks. Readers are advised to seek expert advice and read offer document(s) along with related important literature on the subject carefully before making any kind of investment whatsoever. Cryptocurrency market predictions are speculative and any investment made shall be at the sole cost and risk of the readers.