The network often publishes ratings of cryptocurrencies, assessing their potential profitability in the short and long term. No matter how authoritative the name of the author of the analysis is, you should not take his opinion as an immediate guide to action and urgently change the LINK to USDT or vice versa.
Before you create a long-term investment portfolio and choose the best coin, you need to analyze not only the market. Equally important is your personal readiness.
How risk tolerant are you?
The cost of cryptocurrencies often grows rapidly and falls no less lightning fast. The young digital asset market is very sensitive to a variety of events and news.
Investing in cryptocurrencies is more likely to fall under the definition of speculation. Think carefully about what will happen if your coins suddenly depreciate and whether this will turn out to be a financial disaster for you.
For what purpose do you plan to buy cryptocurrency
Suppose you want to save money for a relatively long-term perspective: as an increase in your pension, for the education of your children, and so on. At the same time, you think that part of the money should be allocated for aggressive investment. If this is about you, long-term investment in cryptocurrencies can be a completely justified decision.
In the near future, mass adoption of cryptocurrencies and the expansion of the use of blockchain technology in various sectors of the real economy are expected. This circumstance gives grounds for optimistic forecasts about the stabilization and further growth of the cryptocurrency market.
Where, how and in what quantity do you plan to buy cryptocurrency
Buying cryptocurrency from a bank or other financial institution is still not available. Cryptocurrency exchanges and peer-to-peer platforms are largely unregulated. For you, as an investor, this results in additional risks.
You will have to scrupulously compare the conditions offered by different platforms and pay special attention to the security of each of them.
You also need to take care of organizing the storage of your coins. It is not worth keeping large amounts on an exchange wallet for a long time. For security reasons, for long-term investments, it is better to get a third-party wallet. Will it be a hardware device, whether it is paper cloud storage – the decision is yours.
What kind of coins do you include in your long-term portfolio
There are thousands of coins and tokens available on the market. Some of them already deserve the title of market veterans, some are new projects, about which almost nothing is known so far.
Bitcoin is considered the most trusted of digital assets. He was the first chronologically, he is in the lead in almost all market indicators and he is certainly not in danger of extinction. Analysts are optimistic about the long-term prospects of #1 cryptocurrency.
High price and upside potential are not the same thing. In the crypto world, the story of the rise of young innovative projects is not uncommon. It will not be possible to repeat the success of early Bitcoin investors by investing in BTC. For example, a tenfold increase in the king of the market looks quite fantastic, although it does not seem impossible.
At the same time, there are dozens of inexpensive coins nearby, potentially capable of growing by several thousand percent. Many of them are available for purchase on LetsExchange. Among the most striking examples is Dogecoin. Of course, what rises suddenly can fall just as sharply, which is what the price of DOGE has demonstrated. Therefore, do not be too lazy to get as much information about the coins you are interested in.
A few tips for the novice investor
No matter how boring it may sound, but you can not do without planning and strategizing. Paradoxically, the ability to get off with minimal losses is often much more important than making super profits.
Manage risks
Set a limit for investing in a particular coin and stick to it. This can be a fixed amount or a percentage of the total investment. It is important that the loss of this money does not become your personal financial disaster.
Diversify your portfolio
Investing in one coin is extremely imprudent. Pay attention not only to the growth rates of different cryptocurrencies, but also to the rates of decline during periods of general recessions. It is possible to reduce risks by combining high-risk, medium-risk and stable assets in different ratios.
Get ready for the long game
Prices rise and fall periodically. Do not give in to panic and hastily react to every market movement. Just be patient and wait.
There is simply no single answer to the question of the expediency of investing in cryptocurrency. If you believe in the triumph of cryptocurrencies, are ready to risk a certain amount and you have enough patience for 5, 10, 15 or more years, then why not?