In the cryptocurrency market, sharp fluctuations in quotes are often observed. For example, on November 16, the price of bitcoin collapsed by more than 10%. A sharp decline in the value of the first cryptocurrency was also observed on September 7. Then the asset fell in price by more than 20% per day.

RBC-Crypto experts explained how to secure your investments in cryptocurrency and make your investments more efficient.

The cryptocurrency market is characterized by increased risk, and the likelihood of losing your funds is high, says Mikhail Karkhalev, financial analyst at crypto exchange. According to him, experienced investors and large funds take this fact into account, therefore they allocate no more than 10% of their portfolio for working with digital assets.

“This is a very sensible approach. 10% is enough to feel the profit that cryptocurrencies can bring. On the other hand, the next crypto winter will not hit the portfolio hard if there are only 10% of digital assets in it, ”the analyst noted.

Conservation of funds

If we talk about investing in terms of, first of all, saving funds, then it is necessary to closely monitor the cryptocurrency market and buy more conservative assets, says Maria Stankevich, Development Director of the EXMO crypto exchange. In her opinion, with this approach, the share of digital assets in the portfolio can reach about 30%.

Despite the fact that the assets of the decentralized finance (DeFi) sector are among the most profitable, it is better to refuse to buy such tokens to reduce risks, the expert warns.

“DeFi projects are indeed the most highly profitable on the market today, but the higher the profitability, the higher the risks,” Stankevich said.

Effective algorithm for beginners

For a person who is not a professional trader or investor who is closely immersed in the subject of cryptocurrencies, it is dangerous to invest more than 5% of capital in digital assets, I am sure Cryptorg CEO Andrey Podolyan. According to him, a beginner is especially likely to enter the market at maximum values, as well as to be involved in various fraudulent schemes.

The most effective and proven scheme is the allocation of non-critical amounts for investment, which must be invested in equal shares every month in Bitcoin, Ethereum, Binance Coin or top stocks, Podolyan explained. He noted that such a tactic can bring good returns in the long term and allows you not to spend a lot of time on investments.

Jordan Peterson invests in BTC as a hedge against inflation

The philosopher and professor of psychology at the University of Toronto, Jordan Peterson, said that he “bought some more bitcoin” after chatting with economist Saifedin Ammus on the air of his podcast.

In a conversation with Peterson, Ammus noted that the first  cryptocurrency  manages to maintain true decentralization, since its network “has no insiders and administrators.” The author of the book “A Brief History of Money, or Everything You Need to Know About Bitcoin” called the act of creating digital gold “immaculate conception.”

“Bitcoin only has users – no administrators. No one has a master key. […] In the end, what made me pay attention to bitcoin is that it is neutral money that no one can control,  ”said the economist.

The interlocutors also touched upon the topic of monetary policy. Ammus stressed that, from the point of view of the Austrian school of economics, money is a market product, and therefore government intervention is “irrational.”

“State intervention in monetary affairs is irrational and cannot be successful for the same reasons that central planning fails. It is also the root cause of most of the economic problems that concern all experts, ”he explained.

Recall that in May, Ammus criticized Tesla’s decision to abandon the sale of electric vehicles for Bitcoin.

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