Is Long-Term Crypto Investment Worth it?

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Long-term investing entails putting money into the market and earning interest or selling when the price rises. Long-term investors should have a clear understanding of what they are undertaking. Long-term crypto investment, often known as HODLing, refers to investing in cryptocurrency for more than a year. 

Any investment choice that is not based on a systematic method may become obsolete.

Long Term Investments

The phrase “long term” relates to the duration that an asset is kept. A long-term asset might be kept for as little as one year or as much as 30 years or more. People are regularly advised to “invest for the long term,” yet assessing whether or not an investment is long term is very subjective. Meanwhile, long-term investing is a trading strategy that attempts to benefit by keeping an asset for more than three years.

“HODL” is a misspelt form of “hold” in the cryptocurrency market, and it became a joke after being posted on the Bitcointalk Forum in 2013. In the context of the cryptocurrency market, HODL generally refers to the buy-and-hold investing strategy. Some investors sarcastically take it as “hold on for dear life.”

Ways to Invest in The Cryptocurrency Market

  • HODL

“I AM HODLing,” a drunken, semi-coherent, typo-filled diatribe about his terrible trading abilities and resolve to keep his bitcoin, was posted by GameKyuubi. The message rapidly became a popular meme, with memes from 300 and Braveheart serving as the initial inspiration. He then admitted to having drunk some whiskey and briefly pondered the spelling of whisk(e)y.

Bitcoin’s long-term volatility defies logic: the price increased by 52,000% from 2011 to 2013, then dropped by more than 80% the following year. HODL is a cryptocurrency investing strategy that avoids trading based on short-term price movements. The reasoning is similar to GameKyuubi’s: inexperienced traders fail to predict the market and lose money or gain less than they would by just holding onto their currency.

Cryptocurrency enthusiasts HODL, which means to wash their hands of volatility and forecasting. HODLing assists individuals in combating two frequent harmful tendencies: FOMO (fear of missing out), which can lead to overbuying, and sell low or FUD (fear, uncertainty, and doubt). The latter is also referred to as SODLing. They believe that cryptocurrencies will eventually replace fiat currencies and serve as the foundation for all future economic institutions. As a result, they regard the currency exchange rate as meaningless.

  • Active Trading
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Active trading is the practice of purchasing and selling assets for a rapid profit based on market fluctuations in the near term. The goal is to just maintain the post for a limited time. Day traders that make tens or hundreds of deals each day are trading very aggressively. Many people consider a swing trader who opens and closes positions every few days to be an active trader.

 Active traders specialise in high-volume equities, foreign currency trading, futures, and options, allowing them to enter and exit positions easily. Limit orders can be used by an active trader to catch a good price. They may also employ stop orders to limit their losses if the price goes against them.

Three Types of Active Traders

  1. Day trading is the practice of purchasing and selling a security on the same trading day, generally in an attempt to capitalise on a specific event that is predicted to impact the stock’s price.
  2. Scalping is the use of a high volume of transactions to profit from price discrepancies in the very short term.
  3. Swing trading entails holding positions for a few days to a few weeks.

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Is Long-Term Investment Ideal During Bear Markets?

Buying the dip is acquiring a crypto asset when its price has decreased with the expectation that it will rise in value. This chance arises from studying the price chart over a lengthy period and seeing when it suddenly collapses to a significantly low price. The success of purchasing a dip is determined by the cryptocurrency’s potential for future growth. Investors that purchased the dip and HODLed are now profiting in the triple digits.

Closing Notes

It is to be noted that this article is in no way financial advice, rather just a suggestion to those who are lamenting over long term crypto investments. Investors are advised to research diligently and choose which strategy works for them as there are plenty of strategies to choose from. One’s strategy may not necessarily work another so it is important to choose from the available options.