3 Tools Every New Cryptocurrency Investor Needs

For the longest time, stocks, dividends, and bonds were the most common options for investors. But ever since Bitcoin blew up, cryptocurrency coins quickly became an enticing option to investors, mainly because of their high profitability. However, anyone who’s spent money on these coins would know that their price movements are more unpredictable than most assets. 

Furthermore, their price changes quite rapidly, making them one of the riskiest assets an investor can go for. That explains why many investors fail to make profits from cryptocurrency coins.  

For that reason, most experts would advise the use of tools that can help with this undertaking. Read on to learn what these tools are and how they can help you with your venture.

Note: to stay on top of the most relevant events in the industry frequently read up on the latest crypto news.

1. Analysis Software

An investor does not simply purchase or sell crypto on a whim. They first look at all sorts of information before making a decision. This info may vary from recent stats about the Blockchain to price movements. By analyzing these pieces of information, one can surmise whether they’ll gain profit from buying or selling a certain amount of a specific cryptocurrency coin. In other words, the investor predicts future price movements using data from the past. 

While it’s completely doable in the foreign exchange market, the price of crypto coins can change rapidly, making it difficult for investors to keep up. That’s where analysis tools come in. 

An analysis tool is a program that compiles historical data and converts it into digestible content for investors such as yourself to use. Coinbase bots, for example, take past price movements and turns them into grids, graphs, and patterns that investors can easily recognize. With such tools, managing the numerous changes that occur in the crypto market becomes a lot easier. 

Analysis tools are particularly handy if you want to do day trading as they can automatically buy or sell crypto coins using parameters that you can set at any time. 

For example, you can set it so the analysis tool would sell 0.01 Bitcoin when its value reaches USD$45,000 and buy 0.01 when it goes down to USD$40,000. Such a feature allows you to set the parameters and engage in other activities. 

2. Event Trackers

Before one can determine the profitability of the cryptocurrency market or any financial market, for that matter, an investor usually engages in two types of analysis—technical and fundamental. 

Technical analysis is the process of looking at historical data to determine patterns that might be a sign of a trend and using these patterns to predict future price movements. 

That’s the main idea behind analysis tools. 

Fundamental analysis, on the other hand, is the method of looking at recent news, statistics, and financial statements to measure an asset’s potential value and future price movements. 

In the case of crypto, fundamental analysis is when you search for news that may have an impact on crypto prices. This news can come in handy as it tells a lot about the future price movements of an asset. For example, in 2021, Elon Musk posted a couple of tweets about his company’s interest in crypto, and as a result, cryptocurrency prices increased drastically shortly after. 

Of course, it would be pretty challenging to keep up with all the potentially crypto-related news, especially since you have to do technical analysis, too, but that’s what event trackers are for. 

An event tracker is, in essence, a platform or software that allows you to compile news or events on crypto in a systematic manner. It’ll enable you to indicate news sources, and the program will automatically keep you up-to-date on all the news that may come from that specific site. 

3. Portfolio Management Platforms

Unlike other financial markets, if you want to make a profit from crypto, you’ll have to invest in not one but multiple cryptocurrencies. It may seem manageable at first, but it becomes pretty difficult to keep track of all your investment at some point. That’s why it’s advisable to have a portfolio tracker, especially for new cryptocurrency investors. 

As the name suggests, a portfolio tracker is a tool that keeps track of all the investments you’ve made as part of your financial portfolio and shows how much you’re allocating to each asset. 

It also tells you how much you spent on a particular asset and the current price that asset is going for. This gives you an idea of the potential profit or loss you can gain from buying or selling it right then and there. This tool can be quite handy as it prevents you from getting lost amid the many investments you’ve made throughout your career as a cryptocurrency investor. 

Closing Thoughts 

The cryptocurrency market may not be the most stable, but it’s arguably one of the most profitable in the financial sector due to the massive shifts in price. Of course, this would also mean it’s difficult to predict price movements, but with the right tools, like the ones mentioned here, making a fortune out of crypto investments is definitely possible.