Short-Term Crypto Investments: Which Digital Coins To Pick?

With the crypto market's extreme volatility, it's difficult to pinpoint which digital coins are the best to invest in for the short term. However, here are some of the most popular cryptocurrencies that have been touted as good short-term investments:

- Bitcoin (BTC)

- Ethereum (ETH)

- Binance Coin (BNB)

- XRP (Ripple)

- Dogecoin (DOGE)

- Shiba Inu (SHIB)

- ApeCoin (APE)

- Solana (SOL)

- Cardano (ADA)

- Toncoin

Coins with huge short-term potential

Akash Network is a decentralised form of cloud computing that aims to wrestle cloud-spacing monopoly from giants like Google, Amazon, and Microsoft. Its native coin, AKT, is used for governance and incentivising providers and stakes to benefit each other. AKT can also be traded as a store of value and holders get occasional rewards and shares of the company’s total volume.

Vader Protocol was introduced in December 2021 and sought to introduce a unique concept where self-serving stablecoins are deployed with a deep liquidity reserve to fall back on during extreme market reactions. The native coin, VADER, is used for governance and staking. Vader also offers protection against impermanent loss, a scary concept in decentralised finance.

Zionomics is one of the latest play-to-earn coins deployed on the Binance Smart Chain. It follows a create-to-earn mechanism where users can create and sell NFTs on the Zionomics marketplace. The native token, ZIOX, has a maximum supply of one million tokens and a current market cap of around 300,000 dollars. Holders of Zionomics get reflection rewards proportional to the number of tokens they hold.

Orca is a decentralised exchange on the Solana blockchain. It allows users to swap tokens, provide liquidity, get a share of the trading fees, and partake in yield farming on its platform. The Orca token is used for governance and staking protocols and still has room for growth.

Altura is an NFT-based token that introduces a new concept to the world of metaverse tokens. It has introduced Smart NFTs, which are improvements to ordinary NFTs on blockchains. The native token, ALU, is used for transactions on the Altura NFT marketplace, as well as for making governance decisions on the platform. It is a token in its infancy and can only be purchased on Pancake Swap for now.

The Dusk Network was introduced in 2019 and mixes compliance with confidentiality. It runs on a zero-knowledge cryptography protocol, which means that users can provide proof of sincerity without compromising their privacy. The native token, DUSK, currently has a price tag of around one dollar.

Star Atlas is a metaverse token with a difference. It is a space-themed crypto ecosystem set in the distant future, in the year 2620. The ecosystem has two tokens: ATLAS, the platform’s native token, and POLIS, the governance token. Both tokens are tradeable on the market and have the potential to grow due to the recent interest they have accrued among crypto communities.

Short-term crypto trading basics

Short-term crypto trading involves buying a cryptocurrency and holding it for a short period, typically a few minutes to two weeks. It is a high-risk, time-consuming activity that requires constant monitoring of the market, news, and social media. Here are some key basics to help you get started:

Understanding Short-Term Trading

Short-term crypto trading is a fast-paced activity where you buy and sell cryptocurrencies within short time frames to profit from small or large price movements. The main types of short-term trading are:

• Scalp trading (scalping): Trading in very short time frames (1-15 minutes) to profit from small price changes (1-3% gains). It is time-consuming as it requires making hundreds of trades per day.
• Day trading: Similar to scalping but focuses on higher price movements and longer time frames (15 minutes to 1 day). Day traders usually make fewer trades per day and aim for 5-15% profits.
• Swing trading: Exploits even higher price movements and involves buying/selling crypto in longer time frames (a few days to a few weeks). It is the least time-consuming type but requires excellent technical and fundamental analysis skills.

Choosing the Right Cryptocurrencies

When choosing cryptocurrencies for short-term trading, look for high liquidity, volatility, and sensitivity to news and trends. Popular coins like Bitcoin, Ethereum, Binance Coin, and Dogecoin are often considered good options due to their high liquidity and volatility. However, it's important to remember that the crypto market is unpredictable, and what seems like a good investment today may not be tomorrow.

Managing Risk and Emotions

Short-term trading is risky, and emotions can play a significant role in your success. It's crucial to manage your emotions and stick to a disciplined strategy. Remember that losses are part of the game, and you should never try to earn back losses by investing larger amounts, as this can lead to even bigger losses.

Getting Started

To start short-term crypto trading:

• Choose a reputable crypto exchange, such as Binance, Kraken, or KuCoin, that offers strong security measures and convenient features.
• Set up your account and go through the KYC process to ensure security and prevent fraud.
• Buy your first crypto using a credit/debit card or by buying a popular cryptocurrency and then exchanging it for the desired coin.
• Get a secure crypto wallet, such as a software wallet for short-term trading and a hardware wallet for storing profits.

Remember always to start small, create a solid trading strategy, use technical indicators, employ risk management tools, and stay informed about market news and trends.

Types of short-term trading

Short-term trading can be a very lucrative but risky strategy. It involves buying and selling assets within a short time frame, ranging from a few minutes to several days or weeks. Here are the three main types of short-term trading:

• Scalp trading (or scalping): This strategy involves buying and selling crypto within very short time frames, typically between 1 and 15 minutes. The goal is to profit from small price movements, usually ranging from 1% to 3%. Scalping requires making hundreds of trades per day and precise entry and exit points.
• Day trading: Day traders focus on higher price movements and longer time frames, typically between 15 minutes and 1 day. They aim for profits between 5% and 15% and make fewer trades than scalpers. Day trading often relies on crypto news and unexpected price surges.
• Swing trading: This strategy focuses on even higher price movements and longer time frames, ranging from a couple of days to a couple of weeks. It seeks to exploit significant price movements, with potential profits ranging from 15% to even 100%. Swing trading requires excellent skills in technical and fundamental analysis and staying up-to-date with crypto news and events.

Each type of short-term trading has its own benefits and risks. Scalp trading is suitable for quick profits without extensive analysis, but it is time-consuming and requires precise timing. Day trading offers a balance between time investment and potential profits, but it still demands technical and fundamental analysis. Swing trading is the least time-consuming and offers the potential for higher profits, but it is also the riskiest and requires advanced analysis skills.

Best short-term crypto to invest in today

The crypto market is highly volatile and unpredictable, so it's important to do your own research and only invest what you can afford to lose. Here are some of the best short-term crypto investments to consider as of August 2024:

Solana (SOL)

Solana is a high-performance blockchain platform for smart contracts, known for its fast transaction speeds and low fees. It has seen significant growth and adoption, making it a strong contender in the crypto space.

EOS

EOS is an open-source blockchain platform designed for decentralized applications (dApps). It offers high performance, flexibility, and developer freedom. EOS has recently introduced a new tokenomics model and staking features, with more updates planned for later this year.

Bitcoin (BTC)

Bitcoin is the oldest and most well-known cryptocurrency. It is a decentralized peer-to-peer digital currency with strong security measures. Bitcoin has seen a surge in value recently, and its price is often influenced by crypto and financial news.

Toncoin

Toncoin is a blockchain project closely integrated with the Telegram messenger. It offers smart contracts functionality and a Proof-of-Stake consensus mechanism. Toncoin has seen impressive growth, and the upcoming launch of a Hamster Kombat airdrop could fuel further price increases.

Cardano (ADA)

Cardano is a decentralized blockchain platform that enables smart contracts and decentralized applications (dApps). It utilizes a proof-of-stake consensus mechanism, making it more energy-efficient and secure. Cardano is currently preparing for a hard fork that will introduce decentralized governance to the ecosystem.

Ethereum (ETH)

Ethereum is a blockchain platform for smart contracts and decentralized applications. It was the first platform to introduce smart contract functionality and is widely used in the crypto space. Ethereum recently transitioned to a Proof-of-Stake consensus mechanism, making it more efficient and environmentally friendly.

BNB (Binance Coin)

BNB is the native token of the Binance cryptocurrency exchange. It offers benefits such as lower trading fees and access to exclusive programs on the Binance platform. BNB has gone through a rebranding and now serves as the native asset of the BNB Chain blockchain.

XRP

XRP is a fast and low-cost cryptocurrency, suitable for use cases like remittances. It is the native token of the XRP Ledger, which is utilized by US fintech firm Ripple for efficient cross-border money transfers. XRP has seen strong community interest and is widely available on cryptocurrency exchanges.

Uniswap (UNI)

Uniswap is a decentralized cryptocurrency exchange that introduced the AMM (automated market maker) model. It allows for direct token swaps on the blockchain without relying on intermediaries. Uniswap is governed by holders of the UNI token, which has seen strong price performance recently.

Other Mentions

Other cryptocurrencies that have been mentioned as promising short-term investments include Dogecoin (DOGE), Shiba Inu (SHIB), Maker (MKR), and Kaspa. It's important to note that the crypto market is highly volatile, and investment decisions should be made with caution.

How to start investing in short-term crypto

Investing in short-term crypto can be a risky business, but if you're looking to get started, here's a step-by-step guide:

Step 1: Do Your Research

Before investing in any cryptocurrency, it's important to understand the unique characteristics and risks associated with each. Scams are common in the crypto world, so be sure to thoroughly research any coin or token before investing. Consider the long-term prospects of the cryptocurrency, and only invest if you're willing to ride out the large price swings that are common in the market.

Step 2: Choose a Reputable Exchange

When you're ready to buy, select a secure and reputable cryptocurrency exchange, such as Coinbase, Gemini, or Kraken. Consider factors such as security, fees, trading volume, minimum investment requirements, and the types of cryptocurrency available when making your decision.

Step 3: Set Up a Digital Wallet

You'll need a digital wallet to store your cryptocurrency. You can choose between a "hot" wallet, which is accessible via the internet and is generally more convenient, or a "cold" wallet, which is a physical storage device that keeps your cryptocurrency keys completely offline and is considered more secure.

Step 4: Decide How Much to Invest

Determine how much you want to invest based on your budget, risk tolerance, and investment strategy. Remember, investing in cryptocurrency is risky, so only invest what you can afford to lose. It's generally recommended to invest no more than 1-5% of your net worth in cryptocurrency and to limit your exposure to any one crypto to no more than 2% of your overall portfolio.

Step 5: Stay Informed and Manage Your Investments Wisely

Keep yourself informed about market trends and news that may impact the value of your investments. Consider developing a trading strategy and risk management plan to help guide your decisions. Remember, short-term crypto trading is not a reliable way to make money, and most traders end up losing money.

Some Final Thoughts:

When investing in short-term crypto, it's important to approach it with caution and to only invest what you can afford to lose. The market is highly volatile, and prices can change rapidly, so be prepared for potential losses as well as gains. Diversifying your portfolio across multiple cryptocurrencies and maintaining a long-term perspective can help mitigate some of the risks associated with this type of investment.

Frequently asked questions