Initially considered highly risky investment products, cryptocurrencies are now considered legitimate financial assets that can be speculated on using a variety of investing approaches including: Dollar-cost Averaging Strategy If you are a believer in the future of cryptos and their underlying technology, this could be the strategy for you. Dollar-cost averaging is an investment approach that regularly adds a fixed dollar amount to a crypto portfolio. For instance, an investor may commit to invest $100 every month in cryptocurrencies, regardless of the prevailing prices. Dollar-cost averaging is very effective when trading assets as volatile as cryptocurrencies. It is convenient and gives investors the flexibility of gradually building a sizeable crypto portfolio. Trading wise, it completely eliminates the issue of market timing, and it can significantly reduce the overall investment cost of a crypto portfolio if prices decline. Value Averaging Strategy Another alternative approach is value averaging, which allows for the shifting of investment contributions, depending on the overall value of a crypto portfolio. Investors invest more when prices decline and less when prices increase. The goal is to maintain a target value of the portfolio. For instance, an investor targeting a crypto portfolio of $12,000 by the end of 12 months, will invest $1,000 monthly. However, if by the end of the second month, the crypto portfolio is worth $1,500, the investor will contribute only $500; if the portfolio is worth $800, the investor will contribute $1,200. A variation of this strategy can be applied when trading cryptocurrencies. With cryptos capable of abnormal price surges, investors can liquidate or reshuffle some of their crypto holdings when prices are high and only seek to boost the capital when prices drift lower. Technical and Fundamental Analysis Like any financial asset class, technical and fundamental analyses help identify the best crypto coins and tokens to invest in. Technical analysis involves forecasting future prices based on past price behaviour. With cryptocurrencies seemingly capable of abnormal price jumps, technical analysis naturally takes a backseat compared to fundamental analysis. Fundamental analysis of cryptocurrencies involves assessing the market capitalisation of the underlying crypto coin, its whitepaper and tracking its major news releases. Market capitalisation can simply be determined using the price and number of the coins in supply, but crypto investors assess numerous other factors to comprehensively value a crypto coin or token. The factors include ownership dynamics, mining profitability, trading volume, transaction speed and coin scalability. A coin’s whitepaper also details a project’s goals and roadmap, and it represents a great way to understand a coin’s intrinsic value. Cryptocurrencies are inherently sensitive to major developments in the underlying coin. News, such as hard forks, security and other technological developments or vulnerabilities, can inspire major price movements of the underlying crypto coin.