Cryptocurrency Investment Strategy

Abstract

This research aims to study investment concepts in order to find investment strategy in the cryptocurrency market, using In-depth Interview based on the literature review on concepts, theories and researches related to financial and digital asset investments to develop a semi-structured question with 10 cryptocurrency investors who have more than 2 year experiences in the cycles of bull and bear markets. Those investors are divided into 2 groups: 6 investors who shares cryptocurrency knowledge through social media with 100,000 followers and 4 investors with 5-years trading experience in the stock market. The datas were analyzed using content analysis and descriptive statistics. The results of the study reveal two investment strategies. First, Passive Investing is long-term horizon, low risk with yields or interests, practice Dollar-Cost Averaging. It is the go-to approach for beginning or less experienced investors. Second, Active investing is better for skilled investors who are required high level of fundamental analysis and technical analysis. This strategy falls into
3-time horizons: Short-term, Long-term or Hybrid. Short-term offers high risk but high return and needs technical analysis to determine the best time to take profits or stop losses.  Long-term is to buy at fair price and holds for a long period to gain the higher capital gain, whereas hybrid is mixed of short-term and long-term in model of Core-Satellite Portfolio Management. It suits investors who carries medium or high-risk and seek all kinds of market returns.  We also observed that the right strategy based on financial goals and investors’ skill and all respondents follow the investment guideline based on 3M’s rule of trading consist of Mindset, Money Management and Method. It is obviously recommended that knowledge is the key success to achieve financial goals and maintain efficient portfolio.