A Previous Strategy
Something that I did in the previous bear market was to trade “effective pairings” in order to increase my holdings. Previously, I traded DOGE/LTC for two specific reasons. Firstly, Doge behaved almost like a stablecoin but at the same time would often experience sudden pumps. This gave Doge the upper hand against many of the other alts. Secondly, Litecoin seemed to depreciate in a very particular way. This caused Doge to have a very good success ratio against Litecoin. Trading this pair was all about increasing my DOGE holdings without allocating new capital. Ideally, you don’t want to be adding new capital to a depreciating market. On the other hand, if you utilize existing holdings and are able to double or even triple your “coin amount”, it offers the same outcome as purchasing more. The one very important benefit here is that it didn’t cost you anything.
The Perfect Market
As I have made mention before, the current market is a “trader’s market” in that it offers the perfect opportunity to exercise this strategy. This is what I did during the recent mini-pumps. Instead of allocating fresh capital into a market that can very easily edge lower, I simply increased my existing holdings by selling into pumps and not buying them. This is ultimately how whales operate, though their motivation is somewhat different from mine. Whales have to sell into a peak and not at or after a peak.
The Pumps create liquidity and this is where whales offload almost directly into the hands of retail traders. I am in essence simply swimming with the whales. I then repurchase the same coin I sold at the peak once the price has retraced. In this way, I am increasing the number of coins I hold without spending a dime.
Once the market does actually trigger a true reversal and valuations rise, I am now holding twice, or even three times the amount of coins I was initially holding. Most investors will simply leave existing holdings until they eventually recover, while simultaneously adding more capital to “buy low” thinking it’s a smart move. I don’t need to buy the bottom, or even buy at all, if I am able to create an even more powerful outcome without risking additional capital. Rule number one is “don’t lose money”. I address this in more length in my recent post, “Investing – The Dual Objective”. So far I have been able to increase one of my existing holdings by almost 100%, which means I now hold almost double the number of coins. This has come at no additional cost.
There are so many ways to increase your Crypto holdings over time and the more cost-effective, the better. New investors often choose to simply throw money at the market. This is not always the best approach and is especially sensitive to market conditions. Always Look for the smartest and safest way to gain increased exposure, and if possible without risking too much capital. Sharing ideas, as well as improving upon existing strategies, ultimately makes us more efficient.