Chapter 6: Cryptocurrency Hodling Strategies Now that you've done your pre-hodling homework, it's time to discuss hodling strategies that can help you achieve your investment goals.
Use the Minimum Expected Return to Choose Your Cryptocurrencies
After determining your minimum required rate of return, it's time to do a bit more research for hodling cryptocurrencies that have the highest chances for success. In particular, you must research on the average rates of return on your prospective cryptocurrencies, particularly if you plan to buy those that are already being publicly traded. Why? It's because tokens being sold through ICOs don't have past prices to compute average returns with.
For illustrative purposes, let's say that after doing your research, you find that the average annual returns on Bitcoin, Ethereum, and Litecoin were 30%, 20% and 25%, respectively. If your minimum required rate of return is 18%, which of the three would you choose? Chances are, you'd go for Bitcoin without batting an eyelash because it has the highest average annual return at 30%. I wouldn't say it's wrong but what I can say is that it's incomplete. Why?
When comparing actual returns to average returns, they're rarely the same. Actual returns aren't equal to the average, but they tend to be within the range of the computed average in most cases. This means that actual returns can be higher or lower than the computed average by up to a certain amount. To optimize your chances of being able to achieve your minimum required rate of return, you'll need to choose investments whose most conservative estimated or forecasted future
