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Low-Risk Investing in Solana: Tips for the Nervous Crypto Investors

Why Solana ($SOL) Deserves a Place in Your Portfolio

Summary

• Learn why Solana could be a safer bet in a bad crypto market

• Understand why Solana, Bitcoin, and Ethereum are a safer pick compared to other altcoins

• Treating Solana as a digital asset versus a get-rich-quick scheme

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There are usually(not always) two sides when it comes to crypto:

1. Enthusiastic supporters of crypto

2. Vocal critics against crypto

And even though these two sides exist, what I've observed is that many people who are interested in adding crypto to their investment portfolio lack a complete understanding of how it works.

This made me consider ways to educate and empower cautious crypto investors, which led me to explore Solana as a potential solution.

Digital Property vs. Lottery Tickets

For someone who is enthusiastic about crypto, it can be incredibly tempting to chase the hype tokens pushed on social media and assume they’re the path to quick profits. But this kind of thinking is in the same vein as gambling. Which is taking high risks for the chance at high rewards.

A better approach would be to treat crypto assets like digital property rather than lottery tickets. By simply changing your mindset to view your investments this way, you're setting yourself up for more stability and growth. It can help reduce stress and FOMO(Fear of Missing Out).

What is Solana?

Solana is a blockchain platform that was designed to make transactions take place faster and cheaper than Ethereum. Solana was launched in 2020 and has become very popular because it can handle a large amount of transactions per second, with more speed and ease than many other networks. The speed is the main reason that Solana grew in favoritism among developers for Decentralized Finance(DeFi) projects.

Why Solana?

For nervous crypto investors wondering which blue-chip tokens have a good chance of surviving turmoil in the crypto market, Solana ($SOL) offers an attractive balance between both its risks and rewards.

Keep in mind, Solana is not like Bitcoin, its price chart cannot reflect that kind of strength, but it has shown to provide value to investors who carefully risk-managed into Solana during its slumps.

Here are some price points to keep in mind from the past few years:

2021: Solana went through a growth spurt and reached a peak of around $259.44 in November. 2021 was a great year for Solana.

2022: The market downturn affected many cryptocurrencies and Solana was not immune to this, with its price reaching a high of around $179.34 early in the year before declining and dropping to a low of around $8.03 by the end of the year.

2023: Solana had a low of around $9.96 during the early part of the year and then rebounded somewhat, with its highest price point reaching $123.35.

2024: In 2024, Solana experienced more positive movement, hitting a high of around $209.59 by mid-year.

The Best Times for Solana

One of the biggest fears new investors face is the potential for their investments to plummet to zero during market downturns. This is a justifiable fear and is why it’s so important to use risk management methods such as:

• Never invest what you can’t afford to lose.

• Dollar-cost averaging small, risk-managed amounts.

• Setting Stop-Loss Order to automatically sell a cryptocurrency if its price drops to a certain price point.

The best way to have approached the situation with Solana would have been to have taken an interest in it during its lowest points, not its highest price points.

The best time to get involved with a blue-chip token(Ethereum, Solana, etc.) is when the token has:

• A history of price rebounds

• Reached its bottom

• A high number of developers creating projects on the blockchain

• Real-world applications

Since 2020, cryptocurrencies like Bitcoin, Ethereum, and Solana have proven more resilient than other altcoins. They stand out because they aren't just speculative assets, they have real-world applications and incredibly strong communities backing them. This can make these tokens a haven to convert altcoins into when the market appears to be shifting in a fearful direction.

Best Tips for Solana

For those who may already have Solana, there are some valuable skills you can adopt to help you get the most value from this network.

1. Consider staking on Solana:Solana offers a unique opportunity for token holders to earn passive income if you stake your coins on a proof-of-stake network. Solana staking rewards are given out every 2-3 days. As a staker, you'll receive rewards for your SOL stake frequently, with the option to compound them by restaking. Rewards may vary based on network conditions and total SOL stakes. The APY reward rate ranges from 6-7% APY and this rate can change over time.

2. Research Market Sentiment: Keep up with the pricing, and sentiment around Solana if you decide to get involved with it. Monitor market sentiment on social media, whale wallets, and forums to gauge potential market moves before investing.

3. Staying Liquid: It can be a good idea to keep part of your portfolio in stablecoins such as USDC or USDT as opposed to cash to make it easier to buy or sell assets during market fluctuations and downturns.

4. Avoid FOMO: Ignore the fear of missing out and stick to your investment plan rather than chasing trends.

Where to Learn More About Solana

An important step with crypto is making sure that you thoroughly research tokens and networks prior to getting involved with them. Here are some sites that can help you learn more about Solana.

• a href="https://www.coingecko.com/en/coins/solana" target="_blank">CoinGecko: For Solana’s price chart and history.

• Solana’s 101 Page: This is Solana’s official site and information page.

Solana News: This is Solana’s official site and news/blog page.

Another place to learn more about crypto as a whole and blockchains such as Solana, is through our crypto courses which can help offer education and awareness along with providing a weekly crypto newsletter.

Final Thoughts

The best approach to take with crypto is an educated one. When it comes to crypto, the risks are always high even with the various methods shared in this article, it can be difficult to lower your risk element. The main idea is to build a diverse portfolio that is more likely to survive the turmoil of a crypto-winter market. Getting involved in tokens during these downturns has the potential to offer returns when they recover, but keep in mind this is not a guarantee, just a possibility. Fully do your own research and consult a financial advisor for proper advice.

Being enthusiastic about crypto is great, but becoming educated about it is even better.

Interested in low-risk crypto investments? Our free e-book, “Low-Risk Crypto Investing: The Right Way to Invest in Crypto”, is filled with valuable tips to help you get started.