Since they went mainstream, cryptocurrencies have been the subject of ridicule from within and outside the tech sector. Apart from notions that the whole idea of a digital currency is nothing short of unattainable, others also pointed out the impossibility of regulating the entire sector as it grows.
In short, cryptocurrencies were expected to implode. Notwithstanding the collapse of FTX (one of the leading crypto exchanges until 2022), the sector is also feeling the financial aftershocks of the post-pandemic years. Surprisingly, Bitcoin and other assets are starting to recover in the first few months of 2024. For investors and traders who thought it was a good idea to abandon ship, it seems opportunities remain plentiful. It’s only a matter of knowing what to do now that the market is recovering.
In This Article
The Crypto Resurgence in Context
Before we go into the strategies that matter this year, let’s first talk about what caused cryptocurrencies to regain momentum. In this article from Euronews, experts say that Bitcoin prices will peak at around $90,000 this year with more optimistic forecasts seeing a maximum threshold of $200,000. One explanation for this is the Fed’s plans to cut interest rates amid a slightly weakening inflation environment.
Adding to that is the long-anticipated approval of spot Bitcoin exchange-traded funds by the Securities and Exchange Commission. This will motivate traders to stay in the game and encourage newcomers to buy Bitcoin without going through extra steps. Ethereum, on the other hand, will also see considerable gains following a much-awaited Dencun upgrade and the stellar performance of the Bitcoin market.
These developments will only bring in more players to the arena, but experts offer a word of caution. The market remains as volatile as ever and it’s important to develop a clear-cut strategy for reducing your risk exposure.
How to Maximize Your Crypto Portfolio This Year
In the first few years, cryptocurrencies became widespread, and everyone was on a buying spree as they saw digital assets to be the next big thing. This optimism gave way to massive losses following the collapse of major exchanges. Now that the sector has regained ground, avoiding the same mistake is wise.
This year, the best strategy to opt for is to spread the risk across multiple types of cryptocurrencies. A diversified portfolio has a better chance to perform well in times of high volatility, but it shouldn’t be your only approach.
You might also want to sell a certain portion of your Bitcoin in exchange for Ether. The difference in the exchange rate will translate to a profit, especially if one cryptocurrency is valued higher than the other.
Initial coin offerings are also great sources of opportunity so long as they ensure the credibility and legitimacy of an ICO. Expect massive returns from a promising ICO project. However, if you connect with one that doesn’t have a clear project roadmap, you could end up losing more than you could invest. To be on the safe side, ask for advice from seasoned traders and industry insiders who can point you towards high-value ICOs.
End Note
In this environment where cryptocurrencies are coming back to life, the least you can do is follow the bandwagon. Use the right strategies and you could rise above the uncertainty and build a digital fortune.
