Is crypto worth investing in 2022? Investment strategy for the middle class
This blog post is for those who are new to crypto. Whether you’re a beginner or a seasoned investor, this article will help with your understanding of investing in digital assets and strategies. It covers the basics of cryptocurrencies with insights on how they can benefit investors of all skill levels. You’ll learn how to choose an investment strategy to reach financial goals while following the rules for safe market analysis. Finally, it’s important to note that this guide isn’t a recommendation or a promise for investment – only a general overview of what investments are available and their overall potential for success.
Comparison of Cryptocurrencies vs Traditional Assets (BONUS: A unique investment with guidelines provided at the end)
Cryptocurrencies vs Traditional Assets
Bitcoin (BTC) remains by far the best-performing asset across many major industries. But Bitcoin is still considered a speculative play rather than something we should consider seriously. That’s because there are plenty of other cryptos out there with higher yields, more market liquidity, better security measures, greater growth potential, and much more. In fact, most popular cryptos offer far superior returns to mainstream indices like Nasdaq 100 or Standard & Poor (S&P) 1500 constituents.
While individual holdings may be small at first, as long as we look back over time and understand how past returns have translated into future gains, our initial investment can grow rapidly. While Bitcoin was once valued at less than $1,000, today its price sits at around $20,000. Many altcoins are trading at above $2,000 in value as well. If you use a cost-effective diversification method and invest wisely, a monthly return of 1% or even 2% could pay off handsomely during downturn periods.
The Bottom Line: Cryptos aren’t necessarily better investments than traditional assets, but we know for sure that they represent fantastic opportunities for income generation in a volatile world. When assessing any investment strategy, we recommend looking into current market trends and considering risks on both a short- and long-term basis. We also recommend using risk controls such as margin accounts or leverage, if possible. Ultimately, we recommend starting with cryptocurrency investments to build up exposure to lower volatility.
Investment Strategies And Their Potential Rewards
There are numerous different types of investment strategies accessible to individuals and institutions alike. Here’s a rundown of them followed by our top two picks in each area.
Value Investing Model: A Value Investing model involves purchasing a tangible item (e.g., gold coins, stocks, or collectibles) with the expectation of generating a high rate of positive inflation over the medium term. Such markets typically generate high rates of annualized growth to offset inflation. There are numerous varieties of viable projects, including NFTs and DeFi tokens, which operate under a value investing model. However, because these are non-fungible tokens, we’ve excluded NFTs from this list.
Income Generator Model: An income generator model involves creating a product or service with the intention of providing revenue to people or businesses. Examples include selling advertising space on websites, driving traffic to social media sites, offering recurring subscriptions to products, etc. Revenue is generated when someone buys a subscription to an e-commerce site, signs up for a free trial period, or makes a purchase on a marketplace. Additionally, some examples involve making money through affiliate marketing or selling goods online. As with value investing, this type of strategy can also be applied to art and music, although it’s probably not the most attractive option for the average person.
Crowdfunding Model: This approach involves buying shares of publicly traded companies under the guise that they are “hot” investments. Although we’ve left out crowdfunding for now, it remains an effective way to raise fresh funding for startups. Buyers are often referred to as Initial Coin Offerings or ICOs. One key difference between crowdfunding and ICO is buyer anonymity; since buyers don’t share their identity with third parties, buyers are likely more comfortable making purchases with confidence. Some notable platforms include OpenSea, Solana, Filecoin, and KuCoin.
Liquidity Addressed Market Offering Model: With regard to liquidation risk and recovery, liquidity addressed offers the opposite process as ordinary equity offerings. Instead, liquidity addressees attempt to achieve a stable level of net worth by taking out loans from lending platforms and repaying them. These borrows are issued by exchange-traded funds (ETFs), which effectively increase liquidity.
Derivative Offering Model: Financial derivatives allow investors to hedge themselves against adverse events. They do so by combining various assets such as commodities with debt instruments from bonds and equities. Unlike other forms of derivative trades, these contracts require complete transparency due to the nature of the underlying assets. In order to successfully execute a contract, a trader must hold both the underlying asset and the instrument with the highest profit margin. Typically, derivatives are priced differently from fixed-income and equity securities.
Options Exchange Trading Model: Most stock options trading plans exist within the same framework as standard futures trading plans. Both allow traders to make long-term predictions using standardized formulas, based in part on historical data. Traders are required to buy a designated number of underlying stocks at predetermined prices. Those buying stocks and futures receive premiums.
Contingent Valuation Model: Also known as CVA, contingent valuation differs from other models in that it offers a certain number of shares at a particular valuation. Investors can either be guaranteed a certain percentage of current earnings, or a set limit is imposed. Regardless, traders have access to several options in addition to options of varying maturity. Contingency values are determined by calculating a premium for each contract. For example, one can trade in S&P 500 index futures if buying shares at $2 or more.
BONUS:
This is not only an investment strategy but also serves as a passive income source. It is dropshipping in the Ecommerce industry and here we will discuss specifically Facebook Marketplace and Facebook Shops. In dropshipping model, the seller doesn't need to worry about storing any inventory nor he will be shipping products by himself. Rather it gives him way too much relief and he can focus his energy on the product research part and maximize his profit margins. The reason we choose Facebook Marketplace and Facebook Shops is because of their potential and low competition unlike the giant Ecommerce hubs like Amazon, Ebay, or Walmart where potential is high but the competition is fierce and new sellers especially someone with limited budgets might not survive in that competitive markets. We highly recommend a tool known as MarketplaceFlow which will not only save you time but will also give you a head start in the Ecommerce business.
Here are some valuable links which will help you start the dropshipping journey with low investment and high returns:
What Makes MarketplaceFlow Different
Advantages Of using MarketplaceFlow for Dropshipping
How to Master Facebook Dropshipping in 2022 with MarketplaceFlow
How Do I Start a Successful Facebook Marketplace Online Store?