Technology

Can cryptocurrency be treated as long-term investment?

cryptocurrency

With the current level of volatility in the cryptocurrency market, it’s never been more necessary to understand the many methods for investing in this market. On one side, there are traders, and on the other, there are investors. While many people mistakenly believe that their goals are the same, they are not. Traders keep assets until they achieve short-term success, whereas investors use the buy-and-hold strategy. Investors put their money in for years, decades, or even longer periods of time. 

HODL has become a slogan in the Bitcoin (BTC) market! Most BTC maximalists follow the HODL concept, which stands for “hold on for dear life.” Short-term price swings are negligible to a hodler (i.e., an investor), whereas traders have predetermined risk levels. 

The optimal advice for a trader would be to exit the trade at your predetermined stop-loss range if you’re losing money, while the optimum advice for an investor would be to purchase every dip and HODL. 

Choosing The Right Cryptos for Long-Time Investment 

When it comes to money, the last thing you should do is enter in blind and unprepared. Work hard, do your homework, and learn everything you can about the market, the coins, the projects, and the technology. Don’t believe everything you see on social media; we’ve all heard of someone who made a significant profit from a cryptocurrency investment. 

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Don’t waste your money on something you don’t know. Take some time to understand the core mechanics of the project, as well as the type of investor you are. 

This would be crucial in determining the investments that would be most beneficial to you. 

The volatility of the cryptocurrency market has been widely reported in recent months. One of the most crucial measures you should take before taking the plunge is to figure out what you want to achieve with digital asset investments that fit your risk appetite. Choosing the right digital asset to invest in might be difficult. What needs to be considered is the project’s dependability. 

Allocation

Since Bitcoin and ETH, the native currency of the Ethereum blockchain, account for 60% of the cryptocurrency market, these two assets will be crucial to your portfolio. These two cryptocurrencies assure that your cryptocurrency portfolio matches the overall market. 

The remainder of the portfolio might be separated into distinct investments that are focused on initiatives that you are optimistic about. This is when the concept of “determining the type of investor you are” comes back into play. How you allocate your portfolio to cryptocurrencies will most likely be determined by your risk appetite. 

The remainder of the portfolio might be separated into distinct investments that are focused on initiatives that you are optimistic about. This is when the concept of “determining the type of investor you are” comes back into play. How you allocate your portfolio to cryptocurrencies will most likely be determined by your appetite for risk. 

HODL Strategy 

There is no such thing as a perfect portfolio. Regardless of how carefully the assets were picked, a diverse portfolio managed by a concerned investor is sure to fail. 

Bitcoin holders gained 47.35 percent in 2021, but ETH hodlers gained nearly 300 percent. The most critical skill for the HODL approach is patience, which does not involve chart-reading or market research. The need for high-quality investments is only going to grow. While most traders try to time the market, the best bet for an investor is time! The bigger the profits, the longer the duration of hodling. 

There are fluctuations in the market that come and go. Because crypto-assets are so volatile, the greatest method to make money with them in the past has been to hold on to what you already have. 

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