1. Diversifying portfolio: By investing in other cryptocurrencies, stocks, bonds, or other traditional assets, investors can reduce their exposure to the risk of Bitcoin price swings. This helps to balance their portfolio and reduce the impact of any single asset's price changes.
investing in other cryptocurrencies is not risk diversifying, it means an increased possibility of losing your coins or Bitcoin value if you back it to BTC.
3. Trading strategies: Investors can use technical analysis, fundamental analysis, or algorithmic trading to make informed decisions on when to buy or sell Bitcoin.
It is next to impossible to predict the price of Bitcoin in the short term, and therefore all that you will achieve from these strategies is the direction of the price of Bitcoin, which means increasing the risk of losing your money, not reducing it.
Thus, investing in Bitcoin should only be done as part of a well-diversified investment portfolio.
That's right, knowing how to invest in assets that are not related to each other or at least inversely proportional to each other is the most important.
- Yamane