To start with, before investing, one should set their financial goals and clarify the difference between long-term and short-term investments. Therefore, be sure to study the technical part in-depth before entering the crypto market.
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Long-term Vs Short-term Investments
Long-term investments are also called “investments in the future”. The bet is placed on time. The investor has to develop the correct personal strategy. Most often, one gets the expected market return. The longer you don’t fix the profit, the more you earn, as a rule. For example, if you bought Bitcoin five years ago, your investment would increase 72 times. And if you bought BTC ten years ago, your investment would increase 36,000 times. This is how time and patience work.
Short-term investment is “investment in the present”. Playing in this unpredictable market, the investor relies on the correctness of their assumptions and becomes dependent on market fluctuations. One constantly monitors unpredictable fluctuations to make a profit on time.
Speculating Exchange Rates Is Not For Everyone
The short-term investor “rides on a roller coaster” of emotions and adrenaline, reacts to every slight movement of the rate. While an investor with a long-term strategy checks the market situation only occasionally and looks at the general trend. In the second case, you will spend much less time and nerves adjusting your investment portfolio.
Besides, only 5% of traders are ahead of the market. The rest are losing their funds on crypto trading. If you are not a professional trader, then trying to profit from the fluctuations in the Ethereum rate is not a good idea.
Diversification Is The Main Rule Of The Investor
If you want to truly succeed at investing, you should definitely store multiple assets at once. Fortunately, you can perform BTC to ETH exchange in a couple of clicks. Start with 3-5 coins and expand this list as you dive into the digital economy. This will significantly reduce risks, as well as increase the chances of finding a real diamond — a coin that will grow by 100-1000 times.
Why Is The Cryptocurrency Market Not A Bubble?
- Blockchain is the technology of the future, which has already actively entered our lives.
- Cryptocurrencies are becoming more expensive every year. In the long term, their capitalization will increase, breaking all records.
- Ethereum has a limited emission, embedded in the program code, and it can`t be changed in any way. This asset is well protected from inflation, which fiat currencies are subject to.
- Liquidity matters and, currently, the daily trading volume of the ETH cryptocurrency is $50 billion.
- Many business owners have already begun to accept cryptocurrency for payment both offline and online. In practice, it is convenient, fast, and minimizes fees. In this regard, more and more new financial instruments appear for the convenience of using and storing digital money. The number of businesses with integrated crypto payments is growing every day!
2021 will bring even more popularity to the cryptocurrency industry as many experts suggest. This should attract even more people to the digital economy.
Compared to usual investment solutions, cryptocurrency offers many more opportunities. If you are not a professional trader and are not ready to spend several years on training, it is better to consider long-term trading. And remember the main rule of an investor: always invest only the amount that you can afford to lose.
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