On a personal level, I have never invested hugely in Crypto - not as much as I could have - but do have a couple of grand invested. I’ve done well out of doing so this year. I realise that buying crypto is speculative and I really have no idea what makes one go up and not the others at any one time. The only pattern I can discern is that when BTC goes up, the alt coins do too (well, some do).
But I manage my investments very closely and sell when I make enough profits over a specific percentage even if the currency continues to rise. I never buy and hold these assets like I do with other asset classes I invest/trade in. There’s no point. As soon as a correction comes, it is pretty steep and you can lose all you’ve gained, which could take some time to recover too if there is no positive macro-economic news happening to get people buying again to boost the profits or recover losses. To me, the opportunity cost of investing in one asset, as opposed to another, is just as important for wealth generation as price action is. So sitting on a rising and falling asset you’e bought and held is pointless if it takes too long and the overall gains are too minimal and too incremental over a long period of time. For that you’d have to invest silly amounts of money and take a much larger risk. Instead, you could have invested that capital into another asset that does better quicker.
I probably don’t make as much as I would do if I did buy and hold but I am wary of the risks involved. All the same, due to rises in December, I’ve made a huge gain and cashed in most of profitable positions for cash for reinvesting elsewhere or in the same coins when the price corrects. It’s a strategy that is working or me, even if it does amount to little more than intelligent gambling to plug a gap in my income currently. It’s all I expect and want from it.
No way would I invest a significant amount of income in them though, for the reasons stated. BTC is the safest bet but even that could be controlled by Government’s further down the line and if you don’t keep your coins safe in a cold, hard wallet you keep in your drawer, they could be stolen too. Yes you could grow rich by investing heaps in BTC, and some clearly have done well, but you could also lose your shirt if the tide suddenly turns and never recovers for ages. I would suggest that Crypto is not a good investment for anyone who is risk averse, no matter how well it has done overall.