Is cryptocurrency a good long term investment?
According to CoinMarketCap, the total crypto market valuation is approaching $300 billion. Global investors and traders are rushing into digital coins. The future is extremely bright for making a long term investment in crypto.
Since its launch in 2009, Bitcoin has distinguished itself as a trendsetter with a current market capitalization of $217.81 billion. Even with the infamous 2017 crash, investors have made money hand over fist from a five-year BTC investment.
There are thousands of coins to choose from and include in your investment portfolio. But some have more potential for long-term ROI than others. While cryptocurrency loan is volatile, it may be a very good investment in the long term. Here’s why.
Why is cryptocurrency likely a smart long term investment?
While it’s hard to be sure of an exact number, reports estimate there are over 40 million cryptocurrency users globally.
A growing number of these holders use crypto for daily transactions. More and more retailers across the globe have begun to notice the growing niche and have begun to accept payment in cryptocurrency. Even countries like Venezuela are discussing cryptocurrency as a viable currency of the future.
As crypto becomes more desirable it seems likely that flagship cryptos like BTC that have a finite supply might keep increasing in price.
Every crypto transaction made is recorded in a public ledger known as a blockchain. The blockchain cannot be easily tampered with or changed once it has been completed. This makes cryptocurrency increasingly desirable for record-keeping.
Organizations like financial institutions that need an indisputable record of transactions may find it beneficial to keep transactions on the chain. In places like China, the transparency of the blockchain has made them increasingly consider it as a way to scrutinize transactions and prevent financial crime.
Unlike stocks, bonds, and forex, which are controlled by the government and banks, many cryptocurrencies aren’t managed by any institution. Their prices are affected by only the forces of supply and demand.
The decentralization of crypto allows most coins to be borderless. They do not have any direct influence from one particular country’s government or monetary policy (although that could change soon).
Since there are no intermediaries, transactions are usually quicker, and the costs are very low. This is very beneficial to the global economy since fast and cheap transactions are highly desirable for international business.
Lower inflation risk
Investors will often look for safe assets that can hedge against inflation and avoid the destructive impact of inflation. Many cryptocurrencies, such as Bitcoin, Litecoin, and Dash, have a limited supply. There can only be a certain amount of them in existence ever, making them a commodity like rare minerals.
Just as gold is used to protect your portfolio from natural value deterioration. Many use crypto to protect their investments from losing value.
Best practices for using cryptocurrency as a long term investment strategy
Diversify your portfolio
As with any investment strategy. To create a significant amount of wealth and avoid risk, you shouldn’t invest in only one crypto. It’s wise to diversify your investments. Ethereum and Bitcoin are some of the best cryptos for long term investment as most systems are currently being built around them.
And if you plan to invest in cryptos for lending purposes, you should also hold a portion of your portfolio in stablecoins. These coins are much less volatile and tie to the value of the USD.
Choose the right trading platform
Depending on the type of cryptocurrency investment strategy, you’ll need to shop around to find a platform that suits you. Some platforms you can try are MyConstant, Coinbase, Binance, or Gemini.
Start smart crypto investing with MyConstant
Through our crypto lend feature, you can earn up to 9% APY when you deposit your crypto assets with us. We don’t charge fees, there are no fixed investment periods, and you can withdraw anytime.
If you don’t own crypto yet, you can still invest. We let you easily transfer your USD into some of the top stablecoins on Constant and start trading or lending at 7% APR to start your cryptocurrency.
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