So, you are planning to hold your crypto investments for multiple years. In crypto trading, long-term investment entails one’s expectation of the price of their preferred digital asset(s) to increase over time. Choosing this type of investment can offer you different perks – one of those is no trading fees. A long-term investor does not trade regularly, therefore trading costs have little impact on their profits.
We get it that being a long-term investor, you can always be in the market and not experience the risk of missing out on a profitable opportunity while it is your break time to monitor the market. However, before betting on this investment strategy, it is worth noting that you must be clear with your objectives.
Q: How should I set up my investment objectives?
You can try answering these guide questions:
- Do I understand what ‘investment’ includes?
- What is the highest amount of money am I willing to lose as a proportion of my initial investment?
- Do I plan to sell my cryptocurrencies as soon as their value reaches a high point?
- If new regulations are enacted that may have an impact on economic circumstances and long-term prices, is it probable that I will reconsider trading my long-term vision for a short-term investment?
- What are the other reasons I should consider that might sell all my digital assets right now?
- What am I trying to achieve in investing in cryptocurrencies?
Once you have answers in your mind, list them down and keep them smart.
That is right — SMART!
When creating investment objectives, the Australian Investors Association (AIA) advises adopting the SMART approach. You may have this format considered in outlining your investment objectives:
Specific – make each objective distinct and clear.
Measurable – each objective should be written in such a way that you can tell when you have reached it.
Achievable – you must take actual steps to accomplish your goal(s).
Relevant – evaluate if your objectives are practical and relevant to your life.
Time-based – give each objective a period to keep track of your progress.
Q: What should I consider in choosing a crypto asset for long-term investment?
There are several factors a cryptocurrency investor must check out while finalising which digital asset they would be investing in for a long period. During your research, assess your cryptocurrency by looking into its:
According to Bloomberg, the entire market capitalisation of all cryptocurrencies is currently $2.48 trillion, up from under $1 trillion at the start of the year. A big market capitalisation suggests that a certain crypto-asset has a stronghold on the market. Be careful to compare the cryptocurrency project to similar rivals, as not all cryptocurrencies are competitors.
Keep up with market news and trends to make educated and healthy investing decisions.
Customising technology to the goal increases the likelihood of it being implemented and so gaining market share against competitors.
A growing number of users doing transactions with a certain crypto-asset suggests that it is on its way to becoming widely embraced. This fact can make one crypto asset a smart long-term investment.
The utility of each cryptocurrency varies. They all have distinct founders with different perspectives on the future of cryptocurrencies. A crypto asset that is deemed to be helpful and meaningful by the majority can also make it a smart long-term investment.
Top Picks for Long-Term Cryptocurrency Investments
Getting ready? Here are the seven (7) best cryptocurrencies you may consider including in your portfolio:
Litecoin was established by Charlie Lee, a former Google employee, with the goal of making it a “lite version of Bitcoin,” with many of the same attributes as Bitcoin but a smaller size. It is a cryptocurrency that uses the unique features of blockchain technology to deliver quick, secure, and low-cost payments. Currently, Litecoin is placed 16th in the top list of cryptocurrencies by market capitalisation.
Chainlink was founded in 2017 by Sergey Nazarov. Chainlink is a blockchain abstraction layer that allows smart contracts to be shared across several blockchains. Chainlink was one of the first networks that allowed smart contracts to include off-chain data. Chainlink is a prominent participant in the data processing industry, with a large number of trustworthy partners. Currently, Chainlink is placed 15th in the top list of cryptocurrencies by market capitalisation.
Gavin Wood, one of the creators of Ethereum, the second most prominent cryptocurrency, launched Polkadot in 2017. The cryptocurrency operates on a network that links to other blockchains, which is one of its unique qualities. Currently, Polkadot is placed 9th in the top list of cryptocurrencies by market capitalisation.
Brock Pierce, Reeve Collins, and Craig Sellars developed Tether — called Realcoin at the time — in 2014. Tether’s claimed goal is to combine the unrestricted nature of cryptocurrencies — which may be exchanged between users without the need for a trusted third-party middleman — with the US dollar’s steady value. Currently, Tether is placed 5th in the top list of cryptocurrencies by market capitalisation.
Charles Hoskinson, one of the Ethereum network’s co-founders, established Cardano. Agricultural firms use Cardano to track fresh fruit from farm to fork, while other applications created on the platform allow for the secure storage of educational credentials and the detection of counterfeit items by merchants. Currently, Cardano is placed 3rd in the top list of cryptocurrencies by market capitalisation.
Ethereum has an unusually large number of co-founders for a crypto project: eight. Vitalik Buterin is the most well-known member of the group. Ethereum’s proclaimed objective is to create a worldwide platform for decentralised apps, allowing people from all over the globe to build and operate software that is censorship, downtime, and fraud-resistant. It is currently the second most significant cryptocurrency next to Bitcoin.
Last is Bitcoin – the world’s largest cryptocurrency. Launched by the anonymous Satoshi Nakamoto, the fact that Bitcoin was the first cryptocurrency to debut on the market provides it with a distinct edge. It has succeeded in establishing a worldwide community and launching a completely new business of millions of fans who develop, invest in, trade, and utilise Bitcoin and other cryptocurrencies in their daily lives.
Q: Where to buy cryptocurrencies?
There are many platforms available for cryptocurrency trading and/or investment. Some of which are eToro, Coinbase, and Robinhood. If you are new in the crypto industry, Btc Superstar is a great place to start your journey, thanks to its beginner-friendly and easily accessible app features.
IMPORTANT NOTE: This article is not intended to be a financial recommendation. The purpose of this article is to educate readers about long-term cryptocurrency investments. Also, bear in mind that the crypto market has a place for high volatility. Investing in cryptocurrencies is not 100% risk-free. Please conduct your research and make knowledgeable decisions.