Crypto Investing or Crypto Trading?
The anthem in the crypto markets recently has been about HODLing and HODLing alone. HODL refers to hold on for dear life. This is a great piece of advice, to be honest as those that get highlight rewards are those that hold their cryptocurrencies for a long time. But it is also counterintuitive in the sense that if you do actually HODL all you will ever get is internet money and nothing more than that because HODLing is basically about never getting out of cryptocurrencies irrespective of seasonal losses or gains.
Crypto Investing Dilemma
This creates a dilemma for crypto investors as they do not know whether to take profits or follow their HODLing cult. The same also applies to when they are experiencing losses. Holding on to crypto projects for prolonged periods is a great strategy but one must know when to get out just as they know when to get in. That also is very important.
Crypto Traders Dilemma
Crypto traders know their profit targets before they buy or sell a crypto project. However, in cryptocurrencies news is key and traders do not know whether to get out of some trades when their hype is still in the air and the coins are getting massive gains even if their targets have long been achieved.
What Is Better Then?
The truth is in trading and investing we cannot objectively say one strategy is better than the other. It all comes to the skill of the trader in question. But I have come up with the consensus that investing requires a lot of research whereas trading requires a lot of skill. Not to say that investing does not really require any skill at all. It does need some skills since financial decisions have to be made. However, the precision of where you invest in a project does not really matter and you also do not have to make decisions continuously. Once you have invested then you simply forget about the investment for a time whereas for trading you have to continuously manage trades. At the end of the day, every trader and investor has to come up with the strategy that best resonates with their skills and personality rather than just picking one because they were told it’s a great one.