How to evaluate investment income in cryptocurrency: A comprehensive guide
The world of cryptocurrency has gained tremendous popularity in recent years. Many people invest their hard -earned money in this relatively new and volatile asset class. However, investing in cryptocurrency can be scary because its potential return is not a clear understanding. In this article, we provide a comprehensive guide to evaluate investment income in cryptocurrency.
Understanding the cryptocurrency
Before we dive into the assessment of investment income, it is necessary to understand what the cryptocurrency is. Cryptocurrencies are digital or virtual currencies that use encryption for safe financial buddies and decentralized control. The most well -known cryptocurrencies are Bitcoin (BTC), Ethereum (ETH) and Litecoin (LTC).
CRYPTOCURRENCY -Investing Types
There are several types of cryptocurrency investments, including:
- Straight investment : You buy part of a particular cryptocurrency supply.
- Exchange Merchant Funds (ETFS) : A type of mutual fund that follows the performance of a particular encryption technology index or cryptocurrency basket.
- Trading Environment : Online platforms where you can buy and sell cryptocurrencies such as Coinbase, Binance or Kraken.
Assessment of Investment Revenue
To evaluate investment income in the cryptocurrency, you need to consider several factors:
- Market Impact : See the historical performance of a particular encryption currency, including its price fluctuations over time.
- Return of capital (ROI) : Calculate the percentage of the investment by comparing it with the average investment of invested capital on the market.
- Volatility : Evaluate the price of the cryptocurrency price of volatility, which may affect your investment yield.
- Safety and Liquidity : Consider security measures taken by stock exchanges and wallets to protect the property of the investors.
- Regulatory environment
: Stay up to date with changes in regulatory policy that may affect the cryptocurrency market.
Key Meters to Evaluate
Here are some key indicators to evaluate investment returns in the cryptocurrency:
- Price alarm (P/E) ratio : This ratio compares the current price of the cryptocurrency to the earnings per share.
- Relative Strength Index (RSI) : A technical indicator that measures the magnitude of recent price changes to predict future price changes.
- Bollinger lanes : A strength-based indicator that describes two standard deviations above and below the moving average to identify overloaded and upper conditions.
Risk Management Strategies
To minimize losses, it is necessary to control the risk:
- Diversification : Apply investments between different cryptocurrencies to reduce exposure to one particular property.
- Station size dimensioning : Limit the amount of investment based on economic goals and risks tolerance.
- STOP Lottery orders : Set automatic sales orders when the price reaches a certain level, limiting possible losses.
Investment Strategies
Here are some popular investment strategies in the cryptocurrency:
- Prolonged placement : Hold on cryptocurrency for a long time to drive market variations.
- Active Shop : Buy and sell cryptocurrencies often utilize short -term price changes.
- Hedge Fund Strategy : Place them in a versatile portrait of cryptocurrencies using them as a protection against traditional funds.
conclusion
Placing in the cryptocurrency can be a high risk, a high prize. By understanding the cryptocurrency, the concept of investment types and assessing investment income, you can make conscious decisions about your investments.