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Long-term cryptocurrency investments can see profits over time that avoid some stressful market volatility. They are also an opportunity to back potential foundational technologies of the future. This article collates a few of the most talked about cryptos for a long-term investment strategy.
Bitcoin is the original crypto, the top cryptocurrency by market capitalization, and despite its immense volatility, is an undeniable store of value and asset likened to gold. Bitcoin hodlers hope the coin will reach new peaks in coming years, especially with wider crypto and blockchain adoption.
The second cryptocurrency by market cap, Ether (ETH), has also performed like an asset or store of value, with many expecting its price to rise again. Moreover, the Ethereum blockchain constantly innovates and remains the platform of choice for dApp developers and new coin launches.
Cardano is a competitor to Ethereum and already has over 1,000 dApps on the network. This blockchain network is fast, and its developers are also working hard to answer blockchain technology’s challenges to achieve broader use. Cardano’s ADA coin is in eighth place by crypto market capitalization, and it also has a stablecoin – DJED.
Chainlink, with its LINK coin, is a blockchain technology company hoping to answer a vital issue for any transition to Web3 and greater use of blockchain as a foundational technology: the issue of interoperability. The project aims to provide on-chain and off-chain interoperability with conventional applications, and in the last year, Chainlink has also developed a staking initiative.
Launched in 2020, Avalanche is another competitor to Ethereum with fast speeds and scalability and has made inroads in the asset tokenization market. The AVA coin didn’t have a great 2022 but is 22nd by market capitalization. The potential of Avalanche is recognized. The Bank of America listed Avalanche, Ethereum, and Solana as three protocols that could benefit from asset tokenization.
Another smart contract, programmable blockchain, working to answer interoperability (this time between blockchains) and scalability, Polkadot’s DOT coin is fourteenth in the crypto market by capitalization. Polkadot is an early innovator with high-tech teams and numerous partnerships, including with Chainlink to use its Oracle network.
The extreme volatility of crypto markets can profit traders willing to study infinite market moves and carefully buy and sell. Still, there is the same risk of substantial losses. Potential long-term cryptos also have significant risk, but long-term holding is a way to somewhat avoid volatility and the stresses of short-term trading. Long-term cryptos often have higher market capitalization with liquidity spread amongst investors and markets, lowering the risk of whale movements or pump-and-dump scenarios.
Time may allow smaller investments to gain substantial traction, particularly for early buyers, and if a potential long-term crypto or its native blockchain builds its use base over a period. There is a similar risk of losses, but there are also investors who have carefully picked “the next big thing” in crypto and profited.
Some investors seek a profit from a riskier strategy, say choosing an ICO coin or NFT, especially buying before a crypto is listed on exchanges. However, choosing cryptos with long-term potential and perhaps that have already become somewhat established can avoid some of the risk and stress of newer coins.
The first part of any strategy should be to identify investment goals and risk tolerance, deciding how much can afford to be lost and over what time period. Investment goals might range from preserving and growing wealth to supporting an innovative technology or particular project of interest.
A common strategy for long-term investment, which helps avoid investing more than can be lost, is to invest regular smaller amounts over time. This strategy also helps to avoid some of the impacts of market volatility and accumulates assets over time.
Holding potential long-term cryptos may be a strategy that sees investments span some years. This strategy is one of muting out a certain degree of short-term market volatility.
Cryptocurrencies, similarly to stocks, allow investors to support a technology or innovation with future potential, contributing to its success and with the hope of profits when the project gains traction.
Long-term investing still needs active portfolio management consisting of monitoring project performance, market trends, regulation, consumer sentiment, and competitor awareness. An informed investor can mitigate some market risk and make portfolio changes as required.
Managing risk is not only being thoroughly informed and knowing one’s risk tolerance but also diversifying investments and, in some cases, taking advantage of stop-loss orders.
If you want to explore other strategies to invest in crypto. You may enjoy this content:
There are numerous potential long-term cryptos that can be identified through crypto market research. A few are collated in this article. Cryptocurrency investment is high-risk. It’s not easy to choose which of many coins might become a future Bitcoin or even surpass Bitcoin.
There are thousands of cryptocurrencies and blockchain projects. Many show significant promise as assets and as technologies. Some are identified as having long-term potential, including those covered here.
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