You know what they say; hindsight is 20/20. This holds true for many aspects of life, including your investments. Even though it’s impossible to predict the future, you are still able to use savvy strategies and methods that seasoned investors use to decide when to invest in the crypto market. From understanding how cryptocurrency affects taxes to knowing the best time to invest in the market, our team is here to be a helpful resource so you get the most out of your portfolio.
Tips to Maximize Your Investments
Despite market volatility, there is still data that reveals particular patterns that can help increase your chances of investing in the right cryptocurrencies at the right times. Don’t let the fear of missing out cost you a significant amount of money in the long run.
Consider the Time of Day, Week, or Month
You’ll be able to make a purchase at any time, but there are many investors who buy and sell during the same hours that the New York Stock Exchange is open. After analyzing data over months, you’ll be able to see trends. According to experts, the best time of day is to purchase early in the morning as prices typically rise as the day goes on.
But what about the best time of the week? Typically, prices start lower on Mondays and rise throughout the week. Prices typically drop when the weekend hits until activity kicks in again on Monday. Generally speaking, Mondays are an ideal day to purchase.
Usually, purchasing toward the end of the month is the most ideal. Prices tend to rise during the first weeks of the month and trend downward as the weeks go on.
Understand Your Risk Tolerance
Some people are more comfortable with risk than others. If you’re risk averse, you might feel less willing to make investments in various scenarios. While it can be good to take risks sometimes, make sure it’s calculated. Flying blindly could result in riskier investments that might not pan out how you wanted them to.
Perform Test Transactions
Test transactions are a simple way for you to identify potential scams. Scenarios such as address poisoning and honeypots could quickly become disastrous, but test transactions can catch these before you pour more money into the cryptocurrency.
Timing your investment is one of the keys to success in crypto. Even if you’ve recently made some good investments, patience is key before pouring your funds into cryptocurrency. There’s no amount of research or market trends that can guarantee a successful investment, so be sure that you’re investing based on facts, not feelings.
Founder’s CPA Can Help Guide You
Our team at Founder’s CPA can answer questions like “how does cryptocurrency affect taxes” or “what forms do I need to fill out before this year’s tax filing?” Whether you’re a business or an individual who is looking for guidance, we’re here to help! Contact us today for a free consultation to get started.