What is the most important thing in long-term investment? The answer may amaze you. Have you ever heard of the survey which says that 45% of respondents are waiting for benefits in one year? And 12.5% of them are waiting for the return of their investment for four years. This is the opposite of the widely accepted view that crypto investors are receiving their profits just in a few minutes.
Most of the investors, 69%, were holding Bitcoin for the longest time. Despite the big age range, which is 26 – 50, most of the respondents have less than three years of investment experience. Almost half of thems’ income is $10,000 or less in a year. People think that they will get-rich-quick from the short term schemes but the truth is one must wait in order to have some knowledge and experience in this field. This is the long term game.
As a new investor, it can be confusing to follow any advice or survey. There is nothing wrong with any of the trading styles, it can be long-termed or short-termed. The thing is just, the investor should be careful with both of them. To make sure to invest the money that you can afford to lose and stay away from investing in borrowed money is the vital thing to consider.
Alright, now we can define their trading strategies.
What is cryptocurrency’s long-term hold investing?
When the investor decides to invest in the long-term, they really believe in this project. They think that using long-term investing will be more valuable in the future. This means that you are looking to hold on to this remarkable asset for at least a year. If a person is too busy to keep up with everyday news and the business market, or maybe is sick of the market’s ups and downs, then this is the approach for investing one will enjoy.
Yes, going long-term is not as exciting as short-term trades, but it is really better to do so in some cases. Why? Well, it helps you to evaluate your investments. It gives you time to make sure that you have a clear vision of the process. Is this investment really worth its money and time? Chasing short-term benefits may be very appealing for many people, but there are still more than half of investors in the world who prefer waiting for the profits. For most people, it is also good to invest in a long-term project because they pay a reduced tax. Every time one exchanges a cryptocurrency for another it will cost a tax. Every benefit needs to be reported in order to receive a tax from the government. On the other hand, there is a different treatment for those who use a long-term project of trading, and if a trader is using this project, he\she will receive some advantage from this.
Short term projects are generally treated as a regular trading system, so when a trader gets again from them, the tac rates are regular. Sometimes, if the income is too small, they can be tax-free. But, of course, it depends on the numbers.
- Less paperwork included for income reporting
- One needs to research more in order to find a project like this
- The tax rate will be reduced since in the long-term project there are capital rates of income
- Allowance of the cost equalizing
- More time to socialize and spend more time alone or with a family, then in the short-term trading
- Large gains are very rare
- Not as compelling as day crypto trading
- It is harder to make money on a daily basis
What is day trading?
When you are short trading, then you are trying to take advantage of every minute of it. Price fluctuations are happening every day all day. Even though this, one can do swing trades which can happen once in a week or several days. Often there are some gains on a daily basis, but they become big if the trader is trying to quickly add up. Many investors are interested in this kind of trading system because they see big profits in this project. That is because of the fact that it is exciting for a person to fight every day in order to gain daily profits. It goes without saying that the allure of fast money can be really intoxicating. Of course, this strategy is not as easy as it looks and if you are new in investing then you need to be very cautious here.
This strategy doesn’t suit everybody and before engaging with this project, one must be prepared to keep up with it. Many traders watch this market constantly and if it’s not fun for you, then you should find other ways of investing and trading.
Also, if you are afraid of market instability, and if it gives you anxiety just to think about the money you will lose, then you should also look for other versions of your income.
Don’t buy into the pump and dump groups. In most cases, you will be an easy way to make some money on you. Of course, there will always be the people who will try to make money on you, but you shouldn’t allow that. Educate yourself, take some steps in order to protect yourself, and don’t let anyone manipulate you, because if you let people, they will take advantage of you and you will be left with worthless coins.
Never invest your entire money in one trade. This is too much of the risk and it will lower your profit per trade. You only need to trade an average amount of money for your wins and losses.
- There can be big gains
- New income stream
- Extra impressive than a long-term holding
- High tax rates
- More paperwork
- More high-priced risk
- You could end up owning a worthless coins
Which cryptocurrency trading strategy is the best?
There is no right answer to that. It depends on a person and preferences. If you are interested in trading, then you should know that there is nothing wrong with both of these strategies, it depends on how you like your income to be.
Keep in mind that no matter the strategy, a trader needs to commit to swinging a trade with only 25% of its holdings. After that, if money is lost, one can still do some trades to their advantage.