Some cryptocurrencies have more market advantages than others. Cardano (ADA) ticks this box.
Several reasons contribute to the growing interest in this crypto coin. Although relatively new to the crypto market (launched in 2017), the coin has not looked back since then. It had continued to be in an upward trend after its Initial Coin Offering (ICO). It already earned a place for itself in the top 10 cryptocurrencies, by market capitalization.
In this guide, we will help you develop 5 essential strategies that will help you invest in Cardano (ADA).
1. Find out Where ADA is Trading
Cardano (ADA) is a relatively new cryptocurrency. As such, it is only available in a few cryptocurrency exchanges.
Your first strategy is to find out where the coin is trading. Once you do, follow the next steps to become eligible to use those exchanges to invest in the coin:
Sign Up for an Account
Create an account on the cryptocurrency exchange that has already listed Cardano (ADA) and opened it up for trading.
Verify Your Identity
Cryptocurrency exchanges are continually in the eye of the storm because of the interests of the Securities and Exchange Commissions (SEC).
Thus, those exchanges have introduced a Know Your Customer (KYC) scheme, which is a scheme aimed at verifying the identity of the users.
You can scale this by providing your information, as well as uploading important documents that will help facilitate your identity confirmation.
You can now add money to your new account on the exchange. Some of the ways to do that are:
· Debit cards
· Bank transfers
· Peer-to-Peer (P2P) trading, whereby you will credit a Cardano (ADA) seller with your local currency and get the ADA equivalent credited to your wallet.
2. Develop a Trading Strategy
Do not be quick to jump into trading or investing in Cardano (ADA). There are lots of things to have in place, as these factors will help you make informed decisions.
Developing an excellent trading strategy is one of them. Here, you are looking for some of the important metrics to watch out for, and the things to do before trading the coin
Here are some of the strategies to develop at this stage:
Decide on an Investment Plan
What type of investor do you want to be? Do you want to be a short-term investor cum trader that takes a little profit from trading Cardano (ADA)?
Or will you be patient to sit it out for a couple of years until you earn more money?
Trading or Price Prediction?
There are two types of investors in the cryptocurrency market. The first is the traders or investors who buy coins and wait for their value to increase before selling. The second are those who don’t hold any coin, but still make profits from the market. The latter does so by predicting the value of the coin via futures trading.
Do you want to invest directly in Cardano (ADA) or do you prefer the futures trading route to speculate on the future value?
Start Analyzing the Market
Market analysis is one of the profitable strategies to invest in Cardano (ADA). With the right analyses, you can find the best entry and exit points.
The combination of both Technical Analysis (T.A.) and Fundamental Analysis (F.A.) will help you analyze the market in real-time.
3. Define Your Budget
How much are you willing to invest in Cardano (ADA)? The fundamental and technical aspects of the coin still point to an uptrend, but you want to risk only what you are ready to lose.
Here are some tips to help you budget the right amount for the coin:
How Many Cardano (ADA) do You Want to Hold?
The number of Cardano (ADA) you want to hold should correlate with the amount you are willing to spend.
For example, if you had $1,000 to invest and Cardano (ADA) is currently trading at $3, it means you can only acquire 300 or a little bit more.
Use Dollar-Cost Averaging
Think holding 300 units of Cardano (ADA) is small? Consider using the Dollar Cost Averaging (DCA) strategy to buy the coin at different prices.
4. Check the Historical Data
Many investors in Cardano (ADA) are bullish on the coin, primarily because of its reckoning as a third-generation blockchain network that can outrival Ethereum.
To this end, check the historical data or previous prices of the coin to see how it has performed. Consider using a 3-year timeframe, since the coin has only been in the crypto market for approximately 4 years.
Thereafter, keep an eye on the news and gauge the market sentiments to know the best time to buy and sell the coin.
5. Earn Passive Income from Your ADA
While holding the Cardano (ADA) coin for the long-term is great, it can also be rewarding to stake it. Read more here in BestBitcoinExchange on how to go about it.
Staking a cryptocurrency means giving it up for a specific time as a means of validating transactions in the network, as well as helping the nodes to function better. In return, you will earn interest on the coin.
Find some of the liquidity pools that accept Cardano (ADA) and stake yours to earn passive income.
Final Thoughts: Investing in Cardano (ADA) is Easy
Investing in Cardano (ADA) is easy once you have your strategies figured out. The strategies in this article have helped many investors to acquire more ADA and reap from the profits thereof.
Use one or more of those strategies and let us know how they worked for you.