Are you looking to invest in something with the intention to get good returns irrespective of the period? Then, there is no better option for you than cryptocurrencies. If you see the historical charts, most of the good coins (cryptocurrencies) have produced magnificent returns over time. However, not all crypto investors have become rich. Why is that? Because they did not hold.
Why is holding so important in crypto investments?
The cryptocurrency market is highly volatile. In the short term, the price of your purchased cryptocurrency can go up or down significantly, leaving you with either huge profits or nothing. That’s a high-risk strategy, and not recommended for serious investors.
HODLing (or holding) a good cryptocurrency for a considerable period, however, can almost guarantee good returns in the long term. Here’s why.
Benefits of Buy-and-Hold Crypto Trading
Buying & holding cryptocurrencies for the long term is much better than buying & selling in short-term for multiple reasons, such as:
It evens out volatility
In short-term crypto trading, the volatility is very high. However, that gets evened out when you keep holding your assets for the long term.
For example, the price of Bitcoin has only moved upward if you see the all-time graph. So, in the long-term, the price has always increased.
But, if you look at the 1-month price chart of Bitcoin, the price trend looks very volatile. Between May 18 and June 15, the price has gone from $44,000 to $32,000.
The worst thing about short-term crypto investing is that it might force you to quit at a loss.
Doesn’t require you to time the market
The whole concept of short-term investing or day trading is based on how well you can time the market. But, in fact, it’s never possible to time the market. You can not even say for sure whether the market will go up or down the next day, let alone by how much.
In the case of crypto buying and holding, you are not required to time the market, as you are in it for the long term.
When you are day trading or buying & selling cryptocurrencies frequently, you are forced to spend considerable time on it, with no surety of profits. On the other hand, if you just invest in some good coins and leave them be, you’ll surely get good returns over time without having to spend much time looking at your portfolio.
Reduces trading cost
Frequent buying-and-selling means you are paying a fee every time for every transaction. It may look small amount-wise, but as a whole, you’ll end up giving a good chunk out of your profits. Holding does not require you to pay anything to anyone.
Peace of mind
The ultimate benefit of buying and holding is the peace of mind you get knowing that your money is secure and growing, slowly but steadily. We all know how stressful day trading can be. The fear of losing all your investments in just a blink of an eye can make anyone lose patience.
And last but not the least, to get the maximum returns from any asset class, you have to give it time. During the period you are holding a cryptocurrency, there may come significant upgrades and growth in the project linked to that cryptocurrency, which might increase the coin price significantly.
As for the best cryptocurrency worth buying and holding, my vote goes to the Libra Coin. Here’s why.
Libra coin is a digital currency backed by one of the best blockchain projects we have seen in the last decade. It aims to disrupt the e-commerce industry through the integration of a global, ETH-based payment system and a comprehensive and secure investment mechanism. The project has been built on the Ethereum blockchain. In the coming years, the value of the Libra project and coin is expected to rise exponentially.