Best Long Term Crypto investments; How To Protect Your Investments

Jul 29, 2021
07:07
2 min de lectura

Equipo de Choise.com

Best Long Term Crypto investments; How To Protect Your Investments

It is veritably a heart-stopping situation when the value of the crypto asset you have poured your hard-earned money into is plummeting. Crypto investments are made of this: they can either make or break your capital. The flagship of all digital coins – Bitcoin – has lost nearly 50% of its all-time $64,000 maximum since April, while other top-performers of the cryptocurrency market, such as Ethereum and Dogecoin, have also dipped down by nearly 50%. It hurts.

Downturns at the stock market always rasp the nerves. But even the most volatile stocks do not often drop as quickly or as dramatically as cryptographic currencies. If you have already invested or consider investing in virtual coins, should you get in a tizzy when the price of your valuables is creeping down? Here is what you should be aware of when crypto rates go mad.

Why Are Crypto Rates Falling?

Cryptocurrencies are notoriously known for their unpredictable volatility, and no one can say for sure what and when will launch the next pullback. As for Bitcoin, its depreciation was triggered by Elon Musk’s announcement in May 2021 that Tesla would stop accepting Bitcoin as a valid payment for their exclusive cars. This caused a huge wave of panic in the cryptocurrency scene as investors were spooked by the probability that Bitcoin (and others of its ilk) would simply become useless.

Then the Chinese government began clamping down on cryptocurrency mining, which led to an even larger drop in cryptocurrency rates. IRS (the USA Internal Revenue Service) then announced that America would set more stringent taxes on revenues from cryptocurrency trading, which may have also contributed to the market disruption.

Cryptocurrencies by nature are highly fluctuating assets because many investors still do not see a true value in this type of product and buy it only with the purpose of further resale. No one knows for sure whether the cryptocurrency will still be around in a few decades, and when rates begin to slump, investors get into panic and hastily start clearing off their tokens, which eventually leads to even greater price drops.

Is it a Reason for Worry?

While the recent market crash may be daunting, the good news is that this is not a new phenomenon in the cryptocurrency space. Bitcoin has lost more than 80% of its value several times and has always succeeded to bounce back. Ethereum lost almost 95% of its value in 2018 but was strong enough to make a triumphal recovery.

While past performance cannot guarantee profits in the future, the practice has proved that the biggest players in the crypto world, namely Bitcoin and Ethereum, always have had what it takes to withstand the trial of aggressive volatility. Again, this does not promise that they will always be able to recuperate, but both of these cryptocurrencies have once faced even harder times and still managed to survive and (let’s face it) flourish.

As with any other investment instrument, the secret of protecting your capital and increasing your wealth is to hold your assets for the long term. Cryptocurrencies like Bitcoin or Ether are still lacking universe recognition and mass adoption, so it could take much time before tokens will become mainstream.

You should only wager real money on cryptocurrency if you firmly believe in its long-term profit potential. If you think that our future lies in crypto tokens, you should be ready to hold onto your investments for a long period, even if the coins are experiencing sudden volatility in the short term.

It is fair to assume that cryptocurrencies are likely to experience many more downfalls as years will go by. But if you are concentrated on the long-term potential, it does not matter much how well the coins are performing here and now.

How To Protect Your Personal Finance?

If you commit to investing in crypto, it is essential to make sure you do so wisely. Cryptocurrency is now so speculative and unpredictable right now that there is a chance to lose the dollars you pump into digital coins.

To begin with, you should only invest in cryptocurrencies as much as you can safely afford to lose, without compromising your financial wellbeing. Also, think about how comfortable you will feel if your assets start dwindling.

Imagine you invest five thousand dollars in a crypto project, but your hopes have not been fulfilled, and now, the coin’s value is tumbling. Will you safely endure that trial? Will your life quality worsen if you forever part with your dear five thousand dollars? If you are not sure, whether your financial stability will remain the same after the defeat, you should better scale back your investments or even hold off on putting your own money into crypto altogether.

Cryptocurrency is not a suitable investment for everyone, and it best fits those who have high-risk tolerance (an ability of an investor to withstand losses). Volatility is inherent in cryptocurrency investments. But if you believe in its potential for growth and are willing to hold onto your assets for several years or even decades, you can one day relish fat returns.

Why Crypto Investments?

Despite certain risks, cryptocurrency and decentralized technologies are continuously gaining ground. The industry is rapidly growing, delighting both investors and common people with amazing achievements. Companies behind these projects diligently supply the investors and users with tools to manage and safeguard their digital currency.

We can see how cryptocurrency futures markets are emerging and many businesses, as well as governments, are opening their doors to the sector of cryptocurrencies. Financial titans like Square and PayPal allow you to easily buy and sell cryptocurrency on their platforms, while other corporations also eagerly invest in Bitcoin, Ethereum, and other digital assets. While Tesla’s CEO is kidding about the acceptance of cryptocurrency, we all remember that the company wagered over $1.5 billion on BTC at the beginning of 2021, and still has not sold a single Bitcoin unit. They hold it!

While some other factors still affect the unpredictability of cryptocurrencies, the growing adoption is a tell-tale sign that the industry is getting stronger. Both individual investors and companies strive to gain direct access to cryptocurrency, considering it a pretty safe product to bet large amounts of cash on.

How To Invest In Crypto Currencies And Gain The Upper Hand?

Smart investment decisions can drive juicy benefits over a long-term horizon. But how to make these smart decisions and never regret your choice?

Despite the industry of cryptocurrencies is struggling through turbulent times nowadays, virtual coins continue to be one of the most appealing investment options. People, who purchased Bitcoin in the early days of its existence, are reaping massive benefits of their investment choices, even when the asset’s rates are swinging like a hell. So, if you are up to the challenge and not afraid of the possible risks, here are a few tips on how to invest in crypto wisely.

Start Small

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Similar to stock markets, the cryptocurrency environment is subject to volatility, which means prices may rise and fall in unpredictable ways. It is smart to invest in cryptocurrency only after you ensure you have enough liquid funds for at least 6 months without any debt.

Once you understand this, try to invest in stocks first (if you have not already) to evaluate your ability to tolerate risks. As you make sure you can accommodate yourself to highs and lows, allocate a small chunk of your budget for cryptocurrency investments. A good rule of thumb is to keep your investments as low as 5-10% of your monthly income.

Pick the Right Coin

best long term crypto investments

The crypto market is awash with various coins, each of which is performing in its own way. It is not a good idea to splurge on 5 random cryptocurrencies without a second thought. Choosing the perfect cryptocurrency requires a lot of homework. Keep tabs on the market trends: pay attention to which coins are less/more vulnerable to different events, determine who or what can take a heavy toll on the price dynamics, and then, make a list of the 5 most effective cryptocurrencies and monitor their growth graph.

At the moment, Bitcoin is the biggest and priciest decentralized currency in the world. Still, there are a number of other projects with a more or less good performance, including Ethereum, Ripple, Litecoin, Tether, Binance Coin, Cardano, Dogecoin, USDC, and XRR. Doing research is a key to success in this business. In the past few years, many cryptocurrencies that have entered the market have either flatlined or sank into oblivion without a trace. Decisions do matter when it comes to buying, selling, or holding the virtual finance, so try to make weighted ones.

Choose a Reliable Platform

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A crypto exchange platform is a website or a mobile application where you can buy, sell, or store your cryptographic assets. Just like bank and credit institutions serve to loan money, accept deposits, and offer various financial products, these cryptocurrency exchanges and apps are specifically designed to allow you to manage your digitalized holdings and their volatility.

Crypterium is your gateway to the whole world of cryptocurrencies. A free, yet powerful mobile app, Crypterium has an answer for all your cryptocurrency needs. An all-in-one wallet, Crypterium lets investors trade over 200 crypto pairs, as surely as purchasing the hottest coins with a debit card.

The absolute secure software, Crypterium ensures all your savings are safe and sound, no matter how many tokens you keep in your wallet.

A user-friendly interface enables you to perform an array of operations with the tokens in your possession. You can buy and sell, send and spend, withdraw, exchange, and even take loans against crypto funds.

If you do not want to waste your precious time scrutinizing the coins’ previous history and concocting predictions, you can buy some robust coins like BTC or ETH and put them in a professionally managed portfolio where all the risks are considered and minimized. The in-built AI-powered market prediction module will help you feel the market pulse and make informed investment decisions.

With Crypterium, you can invest in cryptocurrency like Bitcoin by establishing a high-yielding savings account and gaining up to 15,6% interest annually on your virtual capital.

If you are still skeptical about investing in cryptocurrency, you can spend your tokens straight after they buy, thanks to the Crypterium Visa Card. It is basically a virtual or plastic (or both) Visa card that you can top up using the units of your Crypterium wallet. This gives you the possibility to utilize digital assets like traditional fiat – you can pay with crypto globally, both online and offline, while the merchants will receive the payment in traditional money!

Crypterium is a great way not only to buy, sell, and store cryptocurrencies, but to make the most of your cryptographic possessions. No other crypto solution out there gives the control and flexibility to manage virtual tokens as Crypterium does.

Store Your Cryptocurrency Investment

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Platforms, where you can buy or sell tokens, generally provide a possibility to store the purchased assets, as well. If you opt for Crypterium to start your crypto investment journey, your virtual funds will be insured by the company’s partners, so you will not have to worry about the security of your digital assets– it is guaranteed.

If you use third-party services such as Binance or Coinbase to buy or sell crypto, it is in your best interests to transfer your tokens from there to a more secure place (crypto exchanges are infamous for their security issues).

There are several options where you can safely maintain your digital currency, including hot wallets (mobile, desktop, web-based software programs) and cold wallets (hardware gadgets with USB to connect to a computer).

A cryptocurrency wallet is meant to store the private and public keys that allow you to access the blockchain where your tokens are located. The wallets themselves do not store your coins but serve as an entry point to the distributed ledger using your public and private keys. In addition to being a gateway to the blockchain, a crypto wallet also records transactions and sends this data to the blockchain. The wallet also shows your current balance.

Main types of crypto wallets:

Desktop wallet is a program to be installed on your computer. Since the private keys are kept on your own device, these wallets are hard to hack.
Web-based wallet is a cloud-based service that you can access from any computer. Such a product is easy to use, but your private key is kept online and left at the mercy of a third party.
Mobile wallet is an app you download on your smart device. Such solutions allow you to store multiple coins and offer lots of nifty functions to manage your tokens.
Hardware wallet presents a physical device that stores your private key. These pieces are very secure because your private key is kept offline and could hardly be accessed by anyone. Still, hardware wallets are often very expensive.

Bottom Line

As you see, investing in cryptocurrency is not rocket science, but, nevertheless, requires a serious approach and properly done homework. No matter which coin you choose to pump money in, get ready for some instability and observe price alterations regularly.

A cryptocurrency is a digital asset that employs blockchain technology that defines the ownership rights of each token. The value of a particular coin depends on demand, while cryptocurrency units essentially have no intrinsic value.

Cryptocurrency is a high-risk investment product because it is an unstable instrument, and as an investor, you should buy and trade with caution. It is not difficult to start investing in cryptocurrency. Just create an account with an online cryptocurrency exchange or a specialized wallet, buy tokens with debit or credit cards, and store your digital assets for the long term, until the right moment comes.