Do you want to build your crypto portfolio in 2022? Then this guide is exactly what you need. With prices in a downtrend, it’s a good opportunity to start accumulating cryptocurrencies such as BTC and ETH… but which one should you favor?
Regardless of your preferred style of investing/trading – such as spot, options at Bitlevex, futures, coin-M, etc. – this guide will bring you a solid comparison between BTC and ETH, so you can decide what cryptocurrency will be the best addition to your portfolio this year.
The Case for BTC
BTC was the first cryptocurrency and it remains as the king in the market, with the highest market capitalization. BTC keeps leading the market sentiment, and it’s the first coin to peak before the other altcoins – ETH included – can rally. Therefore, it’s a good idea to have plenty of exposure to BTC, especially when the bull run is just getting started.
The Case for ETH
Ethereum was a genius addition to the crypto market because it introduced the concept of smart contracts as we know them. It was a necessary step towards the future, and hence, they rank at the second place in the crypto markets.
ETH tends to follow BTC after it peaks, and hence, it’s a good idea to have exposure to it. Furthermore, as the market cap of ETH is lower, it tends to provide a better ROI if you buy at the bottom. Therefore, our advice is to buy ETH as well.
Which one should you choose?
The answer will depend on your research, but ideally, we recommend you to buy both. For example, we like to buy more BTC than ETH, because BTC tends to peak first and then it’s followed by ETH. By timing the market correctly, and applying good risk management, it’s possible to invest your BTC profits into ETH before it rallies.
Therefore, we recommend you to buy both. You can allocate each one in your portfolio based on your own research and strategy. Nonetheless, buy both, so you can enjoy of exposure to the two biggest players in the crypto scene.
Should you go all in right now?
No, you should not. The crypto markets still show plenty of fear and weakness. It’s important to remember that BTC already broke the resistance at $40,000 in January, and even though it has rallied a bit until $44,000, it’s still within the danger zone. Many professional traders argue that this is a bull trap or a dead cat bounce, and that we will resume the downtrend sooner than later.
Therefore, our advice is to buy in batches. If you decide to favor BTC over ETH, then do it, but make sure to buy a specific percentage every day, week or month. If you want to invest a total of $10,000 in the next 4 months, then divide it as you prefer, so you can average down your price in case the crypto markets continue going down.
Our investing strategy for 2022
This year started rocky for the crypto markets, but it’s a great opportunity for those who want to deploy their profits from 2021, or are just getting started in the crypto world. Below, find our investing strategy, which will help you to make the most out of the opportunities in 2022.
Dollar-cost-averaging (DCA) is our strategy for buying cryptocurrencies in 2022. If you don’t know how to spot bottomed projects, then this is your best choice. For example, you can start buying projects like $KDA in addition to BTC and ETH, so you can average down your entry price, and hence, increase your profit potential when the bull run arrives.
Sell during the bull run
Don’t try to time the exact peak, because most of the time you will miss it. You need to sell during the bull run. Set your own targets, decide what ROI will make you happy and stick to your plan. This way you will obtain REAL profits that you can invest in other cryptocurrencies, as well as other assets such as gold, silver, stocks or even real estate. Up to you.
Re-buy lower and keep profits
One of the best ways to deploy your profits is to wait for the projects – current ones or new ones – to bottom, so you can start building a position, and hence, obtain a sweet ROI on the way up. This sounds easy and it really is, what makes it hard is the impatience from most investors. If you want to make bank, then you need to remain patient and wait for the next opportunity.
Now that you know how to invest in BTC and ETH to obtain an excellent ROI, it’s time for you to go ahead and follow our strategy.