A protracted-time investor is somebody who, because the identify suggests, adopts a buy-and-hold technique. These buyers aren’t on the lookout for short-term income—they’re in it for the lengthy haul.
The technique of shopping for and holding a cryptocurrency is also known as “HODL,” quick for “maintain on for pricey life.” This technique reduces threat for buyers as a result of they’re not affected by short-term volatility.
As for the way lengthy it is best to maintain on to your crypto, I hesitate to reply this as a result of everybody’s monetary scenario is totally different. However usually, folks deal with bitcoin (BTC) like gold and maintain on to it for years.
Enjoying the lengthy sport
Lengthy-time crypto buyers imagine endurance and time are their greatest property. In distinction to inventory merchants, for whom fixed effort, ongoing analysis and lively administration are obligatory, crypto buyers targeted on the long run are inclined to do their analysis up entrance, buy their cash, place them of their wallets and let time improve the worth of their cryptocurrencies.
For instance, if an investor had bought a single bitcoin on March 16, 2020, they might have paid US$5,000. That very same bitcoin was price US$40,900 on March 16, 2022. By doing their analysis up entrance on the potential worth of the coin, buying it and leaving it alone, the investor would have loved a return of greater than 800% in two years.
After all, there aren’t any efficiency ensures for bitcoin—or another cryptocurrency—so it’s essential to know the dangers and make investments inside your threat tolerance.
Methods for crypto buyers
Now, as I discussed above, there isn’t only one reply as to how lengthy it is best to maintain on to your cryptocurrency. However there are strategies that would offer you a possible edge in maximizing your returns.
First, as an alternative of shopping for your chosen cryptocurrency in bulk, you may make use of a method known as dollar-cost averaging. This entails making small purchases of the cryptocurrency over a time frame, quite than shopping for a big quantity without delay. This technique spreads out threat and helps forestall an investor from mistiming the markets.