LET’S TAKE A LOOK AT SOME LONG-TERM CRYPTO INVESTMENT STRATEGIES.
Okay, now that you’ve picked on a few crypto projects in which you want to invest for the long run, here are a few approaches you can take.
HODL
HODLing is one of the most basic methods of long-term crypto investment. This can be done if you have some lump-sum excess cash lying around that you won’t need right away and can possibly ignore for the following two to three years. This is the money you have left over after you have paid for or covered everything needed in life, from health to daily existence. And this should be a sum of money that will not cause you to lose sleep.
If you’ve covered those bases, you’re free to build a portfolio of your favorite cryptocurrencies and invest in them based on the crypto tax in India, anyway you see fit. There is a concept in traditional finance known as ‘coffee can investing,’ which simply implies that you acquire a bunch of assets that you are confident about for the future, pack them in a coffee can, and keep it in your closet. The goal is for you to virtually forget about it and then come across it several years later to see that your assets have increased in value many times over.
A SYSTEMATIC INVESTMENT PLAN IN CRYPTO (SIP)
HODLing is a perfectly good strategy, but the crypto market, like all other asset markets, will experience drawdowns on a regular basis. And because they are significantly more volatile, the drawdowns are far greater than in other asset groups. However, this is a strategy that will assist you in navigating such periods of decline by minimizing your loss while increasing your upside potential. It’s known as a “crypto investment scheme.”
You’ve probably heard of mutual fund systematic investment programmes, but have you heard of a crypto investment plan? Multiple CIP methods allow you to deposit a fixed amount into your crypto portfolio through a simple process that fosters discipline. Simply deposit an INR amount into your Crypto Wallet before selecting a weekly investment amount in your preferred selection of cryptos. This method is straightforward and allows you to profit from the crypto market’s ups and downs.
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WHY INVEST IN A VOLATILE MARKET FOR THE LONG TERM?
The main advantage of long-term investing is the link between volatility and time. Longer-term investments have substantially lower volatility than shorter-term investments. As a result, the longer you invest, the more probable you will be able to weather market downturns.
IS LONG-TERM INVESTMENT A GOOD STRATEGY DURING A MARKET DOWNTURN?
Long-term investment is a type of investment in which market dips or rallies do not matter. You will keep your chosen cryptos and will not sell them until you believe the market worth of those cryptos is greater than what you believe the crypto genuinely merits at that time.
So, until that happens, you will have the confidence to hang on to your cryptos regardless of what happens in the market.
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