According to The Motley Fool, many cryptocurrencies like Bitcoin and Ethereum are launched with lofty objectives, which may be achieved over long time horizons. While the success of any cryptocurrency project is not assured, if a cryptocurrency project achieves its goals, then early investors could be richly rewarded over the long term. The aim for any investor will be to look out for currencies with clear objectives and long-term benefits for its investors.
Investing in cryptocurrency comes with a high level of risk. This is due to the fact that it fluctuates so much over a short period of time.
As most people don’t access their balance on a daily basis, crypto is more common as a speculative, long-term investment. It is most likely that long term investors of crypto currencies will get wealth. One of the major killers of profiting in cryptocurrencies is the crave for immediate gratification. When one of the currencies is bought, it is important that the investor spends time studying the market, its characteristics, and the price fluctuation. This will enable an investor to make better decisions rather than hopping money in and out of your wallet. Money withdrawn during a very short period of time is most times not given an opportunity to build or an opportunity for a test. In order for one to be a great crypto investor, one must understand the risks involved. One must develop a large appetite for risk. According to Vikram Subburaj, an Economic Times (ET) contributor, building wealth is about patience as much as it is about timing the entry. Crypto assets follow cycles and compound over time. In the crypto world, long term investors are more likely to gain wealth than short-term traders. Traders use technical analysis to predict future patterns of a coin depending on its historical performance, trade volumes and other indicators. These indicators, however, serve as a compass rather than as the holy grail. ‘Invest and forget’ is a better strategy than worrying about daily patterns.
According to byjus.com, Cryptocurrency has the following advantages:
- Funds transfer between two parties will be easy without the need of third party like credit/debit cards or banks
- It is a cheaper alternative compared to other online transactions
- Payments are safe and secured and offer an unprecedented level of anonymity
- Modern cryptocurrency systems come with a user “wallet” or account address which is accessible only by a public key and pirate key. The private key is only know to the owner of the wallet
- Funds transfers are completed with minimal processing fees.
A large number of crypto investors have been able to identify that over a long term, many of the cryptocurrencies have radically appreciated in value. Long-term investment is a type of investment where you expect your investment to appreciate over time. As detailed by benzinga.com, some of the benefits of long term crypto investment include:
- Lower fees:
Active trading increases transaction fees. By using the long-term strategy and taking the long-term view — and leaving your investments alone after the purchase — you are not incurring any trading fees. A long-term investor does not trade on a daily basis and therefore does not reduce their profits through trading fees.
- Lesser risks
When you constantly move in and out of the market, you run the risk of missing out on a profitable opportunity while you are outside the market. With the long-term investment strategy, you are always in the market.
Currently, there are a lot of cryptocurrencies in existence, it’s safer to study any currency you want to invest in to be sure that it has a business model behind it.
- Not being fearful
An investment that is long term avoids the anxiety that comes with losses in market value. A lot of crypto investors are probably going to be paranoid given the volatile nature of the industry. There are a lot of fluctuations in the value of an investor’s investment, and investing for the long term can help you avoid constantly checking your PC or mobile phone to see how the investment is doing.