Should we simply hold spot assets? Today, let's discuss an age-old yet always controversial topic. Recently, there has been increasing divergence in opinions on this viewpoint in the market. Today, based on my own experience and the current market situation, I will share my thoughts.
Firstly, simply holding spot assets can indeed bring considerable returns during a bull market, but the cryptocurrency market is unpredictable, and bull markets do not last forever. Simply holding could make you miss better investment opportunities, or even suffer huge losses during a bear market. Holding long does not mean simply holding; if you can buy but not sell, you ultimately won't make money. Investing is not a gamble; it requires strategy and flexibility.
If I had to say which spot assets are suitable for holding, I personally believe that currently only Bitcoin (BTC) and Binance Coin (BNB) meet this standard. If you are not short on cash in your life, you can buy some at low prices and hold them. Bitcoin, as digital gold, has scarcity and long-term value. Binance Coin (BNB) is also worth paying attention to, especially since Binance is making national-level strategic layouts. The returns and potential of BNB are also quite impressive, which is an advantage that Bitcoin does not possess.
My personal trading style leans towards sentiment analysis. However, the cryptocurrency market is becoming increasingly regulated, and the days of sudden crashes and spikes are gone. If trading based on sentiment, one only needs to wait for panic selling.
Since simply holding spot assets is not the best choice, how should we operate? Here are my suggestions:
1. Set stop-loss and take-profit
Stop-loss and take-profit are very important risk management tools in spot investment. By setting reasonable stop-loss and take-profit points, we can protect our capital and lock in profits during market fluctuations. For example, when the price reaches the expected take-profit point, decisively sell part of your position; when the price falls below the stop-loss point, cut your losses in time.
2. Pay attention to market sentiment and catalysts
Market sentiment and potential catalysts are key factors affecting spot prices. For example, events like Bitcoin halving, policy changes, or technological breakthroughs can trigger price fluctuations. We need to closely monitor these factors and plan ahead.
3. Flexibly adjust positions
We can flexibly adjust our positions based on market sentiment and price trends. During market panic, we can appropriately increase our positions; when the market is overheated, we can appropriately decrease our positions. This approach not only helps you lock in profits but also allows you to seek opportunities during market fluctuations.
I initially came from the fund industry to the cryptocurrency space, and I still hold some star funds from 2021. Back then, it was a scramble to buy, and with 100 yuan, I could only allocate a few dozen yuan's worth. I also bought 100 yuan for an experiment, and now three years later, I'm still down 33 percent. Therefore, I do not support simply holding spot assets. Look at how many coins from the 2021 bull market have gone to zero or are on the path to zero.
