Crypto Investing
18 Jan 2022

6 Things Crypto Investors must be Mindful of in 2022

Ananda Banerjee

Well, we couldn’t exactly predict Omicron in 2022. But then, we aren’t virologists either. What we can gauge is the success of crypto investors, provided they adhere to 6 wholesome aspects of investment. And yes, these gold nuggets aren’t the ones you expected to read about this early into the year.

Key Takeaways

  • Crypto investors should focus more on research.
  • Technicals, fundamentals, and use-cases are essential to consider
  • Volatility and hype are your foes in 2022 and beyond
  • Go by the book if you want to succeed in 2022
  • Buying the Dip should be discretionary

Most crypto assets exploded in 2021. Euphoria triumphed, panic took a backseat, and era-defining happenings helped with mooning. However, 2022 hasn’t replicated the year gone by. The entire crypto market is on a profit-shedding spree, with investors frowning with each passing day.

However, it is too early to belittle 2022, a year expected to be the turning point for most crypto evangelists. And if you are a long-term investor holding onto the assets in 2022, it is better to wait than to panic sell. 

Also, you need to keep six 2022-relevant aspects or rather rules in mind to ensure success. And success isn’t always about the profits you reap. Instead, as the factors would suggest, the current year will be more inclined towards long-term sustainability, regulatory adoption, a tech-based approach, and a utility-driven mindset. 

Factors That Crypto Investors Should Keep in Mind

Investors in 2022 should not hustle for overnight success. That’s speculative and way riskier than what we stand for. Instead, the current year should focus on the following investment-specific factors that will and should be more important than what we give them credit for:

Crypto Research (Do Your Own)

Have you ever come across a term called ‘DYOR’? Well, that is exactly the term that will keep investors sane in 2022. DYOR or Do Your Own Research is an extensively used and minimally implemented term in the financial space. For crypto investors to succeed in 2022, they must focus on learning about the project, token economics, and the relevant utilities.

And here is how you can use DYOR to perfection:

Keep Use-Cases in Mind

The success and failure of a crypto project and the relevant token depend on the utility they bring to the table. For example, most investors are upbeat about the MANA token relevant to Decentraland, courtesy of the Metaverse-specific use cases. 

Go Deep With Crypto-Analysis

While being privy to the project details is a good starting point, nothing works better than detailed crypto-analysis. Going into 2022, the focus will be on getting the hang of technical and fundamental analysis. This approach will help you stay ahead of the token future, market movements, and even volatility as an investor. (We will get to the last point, later.)

Crypto Investment Pointers

Hype Shouldn’t Be Your Type

If you have been following those Elon Musk tweets as part of your crypto research, you seriously need to reconsider this approach in 2022. While some tweets might still be able to create some buzz and push prices high momentarily, the overall investing approach will majorly be shilling-immune.

Note: Shilling is a backdoor approach to hyping up a crypto asset, mostly via endorsements and implicit marketing.

Old Tricks Never Fail

New crypto assets are fun. Investing in them can get you that adrenaline rush, especially with the market moving to and fro. But then, assuming that you are an investor who prefers peace of mind over the pumping heart, it is better to go old school with asset selection.

2022 will be the year where seasoned crypto players like Bitcoin, Ethereum, Polygon, and more will lend balance to your portfolio. Therefore, if you find it hard to decide on the Altcoins as part of your portfolio, it is better to stick to the usual suspects.

Volatility Will Ensue

The crypto realm is still a tad erratic than what we would want it to be. And as per Paycer’s CTO, Nils Gregersen, we are currently in the era of a massive ‘pump’. Going by the trends, reports, and analysis, people will eventually sell, thereby driving the market lower. And with feds planning to hike interest rates frequently in days to come, the market will shake out several leveraged positions. 

All these factors will lead to volatility in the existing space, which shouldn’t be bothersome if you are a crypto HODLer.

Note: Pumping crypto assets is about buying truckloads of them, only to drive the prices higher. 

Crypto Events Will Influence Prices

2021 was a year of crypto growth, but 2022 will put innovation at the forefront. And as an investor, you should focus on tracking the key events prefacing the space. The idea, going forward, will be to follow high-potential crypto assets, especially for on-chain improvements, regulations, and more. 

Unsure as to what this means! Here are some anticipated events that might impact the prices relevant to an asset or the entire crypto market:

  • Crypto regulations
  • Emergence of CBDCs
  • Rise of NFTs and key players entering the space
  • Bitcoin entering a new country
  • Launch of ETH 2.0
  • The emergence of DeFi 2.0

But these are mere sneak peeks. The existing year will be replete with many more revolutionizing events.

Skip the Dip

Wait, weren’t you supposed to ‘Buy the Dip’. Well, with volatility expected to play a massive role in the days to come and the market looking to trade sideways for now, every dip isn’t worth buying. At least not till the market stabilizes and starts following a definite trend. 

Bottom-Line

If followed to the letter, these six factors can and should help investors scale beyond the temporary scares. And just to reiterate, 2022 will mark the establishment of ‘Crypto Resilience’ as Blockchain-driven use cases will become mainstream in months to come. 

With VCs (Venture Capitalists), Institutional Investors, and even Countries investing massively in the crypto space, things are certainly looking optimistic for the retail investors. However, one might experience some volatility and uncertainty in the near term, which can be skillfully combated, courtesy of these 6 points of wisdom.

Ready to put these gold nuggets into action. Download the CoinSwitch app right away and get down to investing.

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.

writer

Ananda Banerjee

Content Writer

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