In the emerging cryptocurrency market, there are many different types of crypto investors looking to dip their metaphorical toes into the water. While some people buy random coins, praying for them to rise, others put a lot more thought and research into figuring out the technical and fundamental aspects of their investments.
Understanding The Types of Crypto Investors
To make money in this highly volatile market, you, as an investor, need to be mindful of your risk appetite. The amount of risk you’re willing to take, the capital you have, the amount of time you can afford to put into your crypto investments, and your research will determine the kind of investor. Making these decisions with all aspects considered is the best way to approach your journey as a crypto investor.
Experts believe that cryptocurrencies and blockchain technology have the potential to reinvent many industries and streamline their processes digitally. The tell-tale signs of a massive revolution in the tech industry are already apparent to many, with thousands of different tokens and coins being created every week to make everyday transactions more accessible.
The crypto market is still a little young and unstable compared to other asset classes like stocks and bonds. The market has not fully matured yet, with investors still hesitant to enter, fearing volatility and short-term losses. That is why new investors (and others who already have a small portfolio) need to find out what kinds of investors they are and adjust their investment strategy accordingly.
Types of Crypto Investors
Here are the four kinds of crypto investors in the markets right now:
Beginners are newcomers to the world of cryptocurrency, and they tend to lack the specific knowledge required to understand the crypto market and make loss-making trends. These investors are the ones that need to educate themselves and start to learn the difference between reliable and misleading information.
Beginners also tend to trade in cryptocurrencies based on their feelings, which rapidly fluctuates like the crypto market. Since their trades and investments are not backed by extensive research and facts, they are prone to booking losses early on.
If you are a beginner investor in the crypto markets and know it, you must avoid falling into the same trap. With CoinSwitch Kuber’s YouTube channel, you can learn the basics of cryptocurrency and make your decisions wisely. Gathering required information on time and using a simple platform like CoinSwitch Kuber are two essential keys for making money in the long run.
Holding On for Dear Life. As the name suggests, these investors are people who have gathered a little bit of experience in the markets but don’t have the ability or the interest to trade in cryptos regularly. Instead, they Hold On to their coins and tokens for Dear Life and believe in the long-term application of their investments.
The name HODLers originated from a type of investment strategy in 2013 when a significant investing demographic held on to their Bitcoin during a downtrend after hitting an all-time high price in November 2013.
HODLers understand the volatility of the crypto market and are prepared to weather the storm. They accept that the market’s inevitable down and uptrends are not their cup of tea, and they’d be much better off betting for the long term. They are less prone to being emotionally invested in their crypto coins and make better decisions than beginners.
They’re always looking for the best moment to cash out and make money, making them vulnerable because crypto markets are tough to time, even for experts. HODLers often anticipate (and often bet on) a future where cryptocurrencies are accepted as legal tender, replacing fiat currencies altogether.
Traders are the ones with the most experience in the markets. They’re well-read about the fundamentals and technicalities of cryptocurrency and bet on the market’s daily volatility to make money in the short term.
Traders are the people who use mathematical principles, accurate calculations, and vast amounts of capital to exploit minute price changes in the market. Traders, unlike the HODLers, are in it for the short term, and they don’t care about the intrinsic value they could be getting by holding crypto long-term and investing in coins for the big bucks.
For traders, following governmental regulations and crypto news updates are extremely important because these factors affect prices highly. Predicting the market’s movement earns them their returns, and over time, they aspire to be as accurate as possible.
The early adopters
The early adopters knew about the potential of Bitcoin when others thought it was a scam or a tool for illegal online transactions. They started mining/collecting Bitcoin and other currencies as they became available in the market, often for dirt cheap rates. The early adopters are the people who are genuinely interested in technology and make it a point to get in on the fun before the party starts.
Early crypto adopters are often Bitcoin investors because BTC was the first coin in the market. Some early adopters also became famous when BTC blew up, giving them the power to move prices by posting a tweet about a token or a coin.
Top Crypto Investors Around The World
The following are some of the most successful Bitcoin investors in 2021, who started accumulating the coin early and are now sitting on a massive amount of untapped wealth.
Barry Silbert is the founder and CEO of Digital Currency Group. His company aims to boost the development of a universal financial system by using the blockchain and bitcoins. The Group has invested in more than 125 blockchain-based companies worldwide, including CoinDesk, which it acquired in 2016.
The Group has also invested in a company called Genesis, which provides liquidity for buyers and sellers of crypto coins in the market. Barry Silbert’s company also owns a controlling share of Grayscale Investments, responsible for managing the Bitcoin Investment Trust.
Dan Morehead is the founder, CEO and Chief Investment Officer at Pantera Capital. He founded the company that launched the first cryptocurrency fund in the United States when Bitcoin traded for $65 each.
Pantera Capital focuses on BTC investments and is one of the world’s largest institutional holders of Bitcoins. Some of Pantera’s investments include Bitstamp (the European exchange platform), the Brave browser (which is an open-source web browser and advertising ecosystem), Shapeshift (a decentralized trading platform), and Polychain Capital (a venture which raised $200 million in 2017).
During the peak of the cryptocurrency boom worldwide, the company earned a whopping 24000% return for its investors.
Tyler and Cameron Winklevoss
Tyler and Cameron Winklevoss are investors in several cryptocurrencies and blockchain-related businesses, most notably the Gemini exchange. They are the first crypto billionaires of the world, collectively holding 100,000 coins worth about $4.8 billion as of August 2021.
The Gemini Exchange, which allows investors to buy, sell and store digital assets, launched bitcoin futures on the Chicago Board Options Exchange in December 2017 and is believed to be the first company to do so in the United States. In addition to Bitcoin, the brothers also hold a large quantity of Ethereum, although there are no official reports that confirm an exact amount.
Novogratz was formerly a hedge fund manager at Fortress Investment Group and a partner at Goldman Sachs. Michael Novogratz is the CEO and Chair of Galaxy Digital Holdings, an investment fund that trades and manages blockchain-related assets worldwide.
He founded the company in 2018, contributing upwards of $300 million in digital assets. In March 2020, the company reported $356.2 million in assets. In 2019, Galaxy held 13,338 BTC, which has a current estimated value of $620 million.
Investing For Growth
If you’re an investor in cryptocurrencies or are looking to start your journey, the first step you should take is to identify your investment strategy. Whether you prefer short-term trades or like HODLing your coins, figuring out your investment style and risk appetite is very important to making money.
With CoinSwitch Kuber, you can start your investment journey in minutes. With hundreds of coins and tokens available at our exchange, you have a wide variety of options in terms of short-term and long-term investments.
Disclaimer: The content of this article is for informative purposes only. It is not intended as a substitute for investment/ financial advice. If You decide to act upon this information, You shall do it at your own risk. While such video/ article has been verified, it depends on third-party sources too, and CoinSwitch Kuber does not guarantee that there are no mistakes or errors nor does CoinSwitch Kuber represents the views presented in such article to be it’s own.
Disclaimer : Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. The information provided in this post is not to be considered as investment/financial advice from CoinSwitch. Any action taken upon the information shall be at user's own risk.
Table of content
Subscribe to Our Newsletter with exclusive content.