Dear Reader,
However, cryptocurrencies are notoriously volatile. While the standard deviation, a measure of risk, of the Standard and Poor's is around 15 % in years without financial crises, the standard deviation of cryptocurrencies seems to be around 30 %.
How to risk manage when you invest in cryptocurrencies? As in regular stocks investing there seem to be two approaches. Either you are a very short-term investor, that is a speculator, or you are a long-term investor. If you invest short-term you can control to some extent the volatility, but you will have to accept quick and not negligible real losses, swallow them and move on in anticipation your profits will ultimately outweigh the losses.
If you invest in cryptocurrency for the long-term, that is you employ a "buy and hold" strategy you will have to accept the huge volatility of cryptocurrencies and ultimately record paper losses, live with it and expect that cryptocurrencies will ultimately change the world of finance and the world itself. If that happens, you will definitely make tens if not hundred of times on your initial investment.
There is of course, the middle way where you try to time the market and employ a mid-term cryptocurrency investing strategy.
In short, if you invest in cryptocurrencies you have to be prepared to live with high risk, but also expect high rewards. Ultimately, what will make or brake your investment is the acceptance of cryptocurrencies as a mainstay investing asset class. If cryptocurrencies become a true global currency phenomenon, the cryptocurrency market liquidity will rise many times over, which will attract institutional investors, which on turn will raise prices dramatically further.
Disclaimer: The blogposts and comments on this blog and posts on social networks(Twitter, LinkedIn, Facebook etc.) are not investment recommendation, are provided solely for informational purposes, and do not constitute an offer or solicitation to buy or sell any securities. The opinions expressed on the blog are Petar Posledovich's. Petar Posledovich does not guarantee the accuracy of the information presented on this blog and social networks. The information presented is "as is".
Petar Vladimirov Posledovich is not liable for any investment losses incurred by reading and interpreting blogposts on this blog and posts on social networks.
Conflicts of interest: I may possess some of the securities, currencies or their derivatives mentioned in the blogpost and posts on social networks(Twitter, LinkedIn etc.)!
Respectfully yours,
Petar Posledovich
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