In , it is important to have security and accessibility. The hybrid custody model provides a middle ground solution since it splits the holdings between the cold storage and the exchange-based holdings.
Usually, the hardware wallets or multi-signature wallets are used to store 70% to 80% of the capital, which is the highest possible security and protection against the risks of the platform.
The 20-30% is held in controlled to enable the investors to retain the liquidity as the money can be freely traded, rebalanced, and even tactically positioned. This strategy allows one to ensure that the core capital is intact, but maintain enough flexibility to act in reaction to market trends.
Tiered Entry Strategy: More Than Traditional DCA
Although Dollar-Cost Averaging is a stable accumulation method, it is not very responsive to severe corrections. A more sophisticated strategy is the tiered capital deployment in accordance with the predetermined market conditions.
Under this strategy, investors will invest a specific amount of money in the market at the present level, and then put in more money in case the market decreases by 15, 30, and 40% or more.
This systematic method allows investors to enhance their average price of entry as well as minimise the emotional decision-making when the market experiences stress.
The ability to predefine the entry levels and the limit and stop-limit orders allows investors to enter the market in a systematic and not a reactive way.
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