Even if you’ve never invested in cryptocurrencies before, now is the time to start. The recent Bitcoin rally to $55k is just the beginning: many coins could grow by 100% in 2021. But how to create a profitable portfolio and minimize the risks? In this article, the analysts of the leading passive investment ecosystem Midas.Investments offer their advice.
Passive or active investing?
If you are beginning to invest in crypto in 2021, you have three basic choices:
1) Passive HODL
HODLing means simply buying and holding crypto in a wallet, waiting for the price to grow. It’s the easiest method, but it’s actually not very passive at all: you have to keep tracking the market so that you don’t miss the moment to sell. Plus, you might have to wait many months to get your first profit.
Stable YAP offers investors the opportunity to invest in a fully managed and automated investment portfolio that offers long-term growth potential as well as a weekly payout in BTC.
2) Active investing: masternodes vs. DeFi protocols
A masternode (MN) is a special blockchain node that ensures network stability and receives regular rewards (between 10% and 50% a year). They are considered one of the best crypto investments for beginners.
On the other hand, there is a very attractive DeFi sector which was all the rage in 2020. Here, investors can provide liquidity to decentralized protocols, DEXes for example, but it is far too complex and risky due to impermanent losses and thus is not recommended to inexperienced investors.
Most investors choose shared masternodes, since operating an MN yourself is expensive and technically demanding. One of the best-known MN investment platforms is Midas.Investments, where you can choose between dozens of MN coins yielding between 6% and 430% a year. You can invest any amount directly in BTC, and rewards are mostly paid daily.
3) Active trading
The most basic strategy is to buy when an asset is cheap and sell when it appreciates. The advantage is that you can make 20-30% on a single trade, but prepare to spend a lot of time – possibly all your free time. Plus, the risks are high: some say that 95% of beginner traders lose money.
4 best tips from Midas Investments managers
1) Don’t chase the cheapest coins/masternodes. Some MNs are priced between $100 and $1,000, while others are worth $5,000 and more. A balanced beginner portfolio should center around mid-range and high-range coins because they offer a better risk-reward ratio. For instance, the highly-successful Midas YAP product (see below) includes MNs priced between $2,000 and $25,000 and yields around 26% a year.
2) Don’t dump everything into Bitcoin. Bitcoin will certainly grow further, so you should allocate a part of your portfolio to it. But there are many cheaper, high-potential coins that can appreciate more than Bitcoin in 2021 and yield a higher passive income while you hold them. Examples include Midas (24% APY), Energi (33%), and DIVI (25%).
3) Invest in a ready-made portfolio. If you are not sure how to allocate your funds, it’s better to pick a managed portfolio designed by a professional fund. For example, Midas Investments offers a product called Masternode YAP (Yield Automated Portfolio): a balanced portfolio of 8 coins that pays 16% APY. All the rewards are paid in BTC on a weekly basis.
4) Try social trading – but be careful. Many newbie traders use social or copy trading, meaning that they automatically copy the orders opened by experienced traders. This is usually a paid service, and the idea is that you risk less by following a pro. The problem with this method is that you don’t know the pro trader’s strategy and you can’t judge their skills. If you lose money – which happens very often in copy trading – you won’t even learn anything.
A few final words
If you want to get the most out of the 2021 crypto rally, it’s better to act now. Head over to https://midas.investments/, register an account in one minute, choose your masternode coin – and enjoy daily rewards starting from tomorrow. When your coins appreciate, you can withdraw and instantly sell them on the built-in Midas Exchange. This will give you the best of active and passive crypto investments with minimal risks. For more information, read the in-depth beginner guide.