Long- And Short-Term Cryptocurrency Volatility Components

What is Cryptocurrency?

A cryptocurrency is a computerised instalment framework that doesn’t depend on banks to confirm exchanges. It is a shared framework that can permit anybody anyplace to send and get instalments . Rather than actual cash that is shipped and traded in reality, cryptographic money instalments exist exclusively as advanced sections coordinated to a web-based data set depicting explicit exchanges. At the point when you move digital money reserves, Defi smart contract development the exchanges are kept in a public record. Cryptographic forms of money are put away in computerised wallets.

Long-term investment in cryptocurrencies

In this type of investment, the price of cryptocurrencies is expected to rise over time. Typically an investment that must be held for a minimum of 6 months to 1 year.

Investments can be made in parts. Dollar cost averaging , for example, is a great strategy for investing.

 If you have Bitcoin, Ethereum or other cryptocurrencies, you can earn interest on them to accumulate more coins in the long run. Platforms like Hodlnaut make this possible, and you can earn up to 12% interest on your digital assets.

The benefits of long-term investment in cryptocurrencies

There are 3 key benefits of investing in cryptocurrencies for the long term:

Historically, it works. This happens almost every 5 years throughout history, as the markets tend to go up. In the same period of time, the cryptocurrency market has appreciated more than 10,000%. Although such returns are unlikely to be seen again, cryptocurrencies could outperform traditional investment markets in the near future.

Commissions are lower. Active trading increases the cost of transaction fees . Using the long-term strategy and vision (leaving investments alone), no transaction fees are incurred.

Long-term investment strategy

You must be clear about your investment objectives before investing:

Will you sell when the cryptocurrency reaches a certain price or after a certain time?

 For example, if gambling strategies change or new laws apply that could affect economic conditions and the long-term prices of your investment, you may need to reconsider the sale beforehand.

You should do a little research to decide which cryptocurrencies are the most convenient or the best to invest in the long term.

Another strategy that many crypto investors use for the long term is to earn interest on their digital assets. Instead of just holding your Bitcoin, Ethereum, or altcoin, you can stake them through a cryptocurrency wallet to earn 2%-10% annually on your cryptocurrency. The good thing about this is that the interest is paid on the cryptocurrency that is wagered, so you will be able to passively accumulate more cryptocurrency. Exodus wallet allows users to stake their crypto to earn interest, as well as securely trade and store crypto. Exodus is available on iOS, Android, and desktop, and is free to use.

How to choose a cryptocurrency for the long term:

Market share, utility value, transaction volume, technology development, and market news are some of the ways in which the long-term value of cryptocurrencies can be assessed.

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The Best Altcoins To Buy Today, Here are some questions to ask yourself when determining if the cryptocurrency you are considering may have long-term value.

Market share: How much market share does this cryptocurrency have compared to other cryptocurrencies?  Make sure to compare cryptocurrencies with similar competitors, as not all cryptocurrencies compete with each other.

Utility value: Does it have a utility? Is there a market for users? What is the underlying purpose that it intends to solve? Is it feasible? decentralised app developer The fact that it is a useful and purposeful product means that it is likely to be widely adopted and therefore a good long-term investment.

Value of transactions: How often are cryptocurrency transactions made? Has this amount increased over time? A growing number of users indicate that a cryptocurrency is in the process of being adopted and is therefore a good long-term investment.

Technological development: Do you have a positive technological development that makes sense for your purpose? Technology fit for purpose means that it is more likely to be adopted and thus gain market share against its competitors.

Market news: What does the market news say? Are there any issues that could affect your long-term profitability? Read market news and stay up-to-date with what’s new to make informed investment decisions.

Cryptocurrency network effects:

The digital currencies featured in the top 10 of the Coinmarketcap ranking are the most trusted among traders and investors.

  • High liquidity
  • Stable growth of the exchange rate
  • Prospects for further development of the ecosystem
  • The reputation of developers and team members
  • Tips for investing in cryptocurrencies
  • Start by investing little.

Prepare as much as you can. If you don’t know about blockchain technology and Bitcoin, circulating supply vs. total supply, inflationary vs. deflationary supply, wallets 

Cryptocurrency market vs. Stock market

If you are a cryptocurrency enthusiast and you know the fundamentals of the stock market, you will have noticed that there are many things in common between these 2 universes.

Related content: Bitcoin: What, How and Why?

In both cases, it is possible to buy and resell the personal property, to obtain a profit and invest in various projects. Before each exchange it is necessary that you carefully read the specialised press and inform yourself as much as possible about the markets.

But there are also fundamental differences between these two domains.

The stock market, for example, has been established for decades and its operation is institutionalised, surrounded by laws and well-defined organisations. A very important part of the economy works thanks to it.

Cryptocurrencies are still very young.

Bitcoin emerged in 2009, and the development of the sector is still in its infancy. Governments around the world have not thoroughly examined it. So it remains a universe where pyramid schemes and insider trading are common.

Some predict that cryptocurrencies represent the future of the stock market as we know it today. Many investors agree that the share of cryptocurrencies in the real economy will increase at the expense of the stock market.

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The best investments in cryptocurrencies for the long term

Bitcoin (BTC)

It is the largest cryptocurrency in the world, the first and the most popular on the market. It was created in 2009 by Satoshi Nakamoto, whose identity remains anonymous. Bitcoin can be referred to as “private money” Future in virtual world as opposed to fiat currency that is controlled by governments. There are no institutions or governments that control the supply of Bitcoin; instead, the parameters of the Bitcoin code control its money supply. Bitcoin has a maximum supply of $21 million coins and more than $18 million has already been minted. This finite supply makes Bitcoin the best long-term cryptocurrency on the market.

Related content: Bitcoin: Is It Really a Good Investment?

Ethereum (ETH)

It is the second largest cryptocurrency by market capitalization, created by Vitalik Buterin and 7 others in 2014. It is one of the largest decentralized application platforms also known as DApps. Ethereum is the platform, and Ether is the currency used by the platform. This currency works thanks to smart contracts, a set of conditions and actions that are executed by the network according to a series of defined rules.

Chainlink (LINK)

The project is still alive today and arouses the interest of retail and institutional investors alike. Why was Chainlink successful? Mainly thanks to a system of “nodes” defined as Chain Link nodes (CN), which are configured to monitor and report the progress of an event to smart contracts.

Polkadot (DOT)

Polkadot is called a layer zero blockchain . It will support 100 parachains on its platform, allowing different blockchains to communicate with each other. It is a proof-of-stake blockchain that aims to be a scalable solution for smart contract blockchains .

Uniswap (UNI)

It is a leading token on the Ethereum blockchain . Also, it is the token for the largest decentralised exchange (DEX) on the Ethereum network.Users can trade cryptocurrencies using Uniswap without the need to sign up for a cryptocurrency exchange account.

Are Cryptocurrencies Real Money?

The answer is yes! Money, or currency to use a more exact term, has 6 main characteristics, and cryptocurrencies fulfil all of them:

Durability: It must be strong enough to be used over and over again.

Portability: It is easy to carry.

Limited Supply – To maintain value, you need a limited supply

Divisibility: can be divided into smaller increments

Acceptability: it is an acceptable means of payment

It is durable in the sense that it can send and receive exact units of cryptocurrency between peers; there is no creation of new cryptocurrencies for each transaction per se. Digital wallets are used to transport currency, which is essentially a mobile app. Each and every complete cryptographic unit has exactly the same value as each unit on the network at all times (for example, if a Bitcoin is worth $60,000, all units are worth $60,000). All cryptocurrencies are in limited supply, which means that their value is maintained; if there were an infinite supply, there would be no value. It is not necessary to buy a whole unit of cryptos: they are divisible by even the smallest fraction and you can buy as many as you want.

Types of Crypto

There is a whole variety of cryptos, but they can be divided into 3 main categories.

Cryptocurrency coins.

When applied to buying, selling, and trading, currencies run on their own blockchain network, like Bitcoin (BTC) on the Bitcoin blockchain. They are managed and operated by their own network that validates and stores value, and uses their own currency for transactions on their blockchain.

Stablecoins

Stable coins or Stablecoins are cryptocurrencies pegged to a fiat currency or asset , meaning they have little to no room to fluctuate. Its main purpose is to hold funds on a market or exchange platform to facilitate exit and re-entry to the crypto market. For example, without having to move your funds to a wallet or withdraw money during a time of heightened volatility, you can purchase stablecoins to keep your funds on the exchange at the exact value you purchased them for. When you think it’s a good time to buy crypto again, you can quickly do so within the exchange.

Tokens

Unlike cryptocurrencies, tokens use network blockchains for infrastructure. For more detailed information on each of these tokens, read more here .

Answering the Remaining Questions:

Are cryptos magic? In reality, it is a perfectly structured and calculated network that has been designed to be impenetrable, anonymous and transparent at the same time, which could be likened to magic!

Are they taking over the world? Some believe so, others believe that one day it will happen, and others are waiting to see what happens to crypto; But one thing is for sure: it is the fastest growing consumer segment in HISTORY and its expansion has not stopped.

Is meme money a thing? And it is! Take a look at Dogecoin! Thank you, Elon Musk.

 Also if! Satoshi Nakamoto is the pseudonym of the anonymous person or persons responsible for creating Bitcoin, staying true to the anonymity of the cryptocurrency!

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