Can cryptocurrency be treated as a long-term investment?
You can become obscenely wealthy by investing in cryptocurrencies. The blockchain sector is expanding, as are cryptocurrencies. Financial infrastructure that is desperately required is being created, and institutional-grade custodial services are becoming more accessible to investors. The resources required to manage and protect their cryptocurrency investments are progressively being made available to both professional and ordinary investors.
Seasoned investors are aware that becoming wealthy usually takes time. It frequently requires careful preparation over time and a systematic approach. Cryptocurrency may already be a solid long-term investment worth your attention despite being a relatively new asset class.
We'll go through how to invest for the long term and more in the sections below.
Is a Long-Term Investment in Crypto Beneficial?
Whether bitcoin is a wise long-term investment may be somewhat answered by looking at the very brief history of cryptocurrencies. Consider Bitcoin and Ethereum, the two biggest cryptocurrencies in market value. Since its establishment in 2009, Bitcoin has gained importance by around 12,000%. In contrast, Ethereum has had a value growth of over 92,000% since its birth in 2015. You would most likely be highly wealthy now if you had made an early investment in either digital currency.
Since Bitcoin started the cryptocurrency frenzy 13 years ago, numerous cryptocurrencies have generated spectacular profits. Hundreds of alternative currencies have been introduced as a result, and there have been billions of dollars spent in the market. Does that imply that cryptocurrency is a "good" long-term investment? Yes! The world is transforming digitally, and digitalization is boosting the use of digital currencies.
A few long-term investment strategies
- Dollar-cost averaging
The method of investing a given dollar amount over a predetermined period is known as dollar-cost averaging. Dollar-cost averaging, for instance, enables you to spread out your investment of $10,000 over a year by acquiring $833 of the asset each month.
The quantity of coins you buy each time you invest in cryptocurrencies via dollar-cost averaging relies on the coin's trading price. As a result, your regular investment will purchase you less of a cryptocurrency while its price is high and vice versa.
A crypto investor transfers coins from their digital wallet to the network by staking, which then utilizes them to verify more transactions. Investors who participate in betting may get benefits, such as extra coins or interest, similar to the dividends that some equities provide. Staking can be a successful long-term investing strategy, enabling you to gradually expand your assets or investment income through passive means.
- HODL the dips
One of the trickiest and riskiest investment techniques is market timing. Nobody can fully predict how a specific stock, asset class, or industry will do. However, if you can take advantage of cryptocurrency's volatility by purchasing at a discount, it's feasible that your investment might provide strong long-term returns.
A few crucial cryptocurrency statistics
- By 2025, global B2B blockchain transactions may reach $1.7 billion.
- 18% of college students in the US have cryptocurrencies.
- Restaurants that offer quick service and casual eating are more likely to accept cryptocurrency payments.
- Every week, 24 new cryptocurrencies are produced.
- Every 24 hours, users of Binance transact more than $14.39 billion worth of cryptocurrencies.
- The most recent closing price for bitcoin is $69,044.77.
- Over $59.6 billion worth of assets is managed by crypto investment funds.
- Globally, there are over 40,000 cryptocurrency ATMs.
Consumers, speculators, and miners make up the complex ecology of cryptocurrencies. There are no signs of a slowdown in this multi-trillion-dollar sector. Due to its expansion, related markets, including trading platforms, mobile wallets, and cryptocurrency ATMs, have emerged.
Although some potential users may be turned off by cryptocurrency's speculative character, general trust in the technology is growing. More companies are consequently considering using cryptocurrency in their selection of payment methods.
A volatile investment, cryptocurrency may be. Despite price fluctuations, the long-term trend indicates phenomenal growth.