The safest cryptocurrency investments are those that bet on the long term. This article explains how to maintain savings in digital assets based on a long-term investment strategy. We also discuss the best long-term investment strategies and how to identify the best cryptocurrency to invest in.
Saving in crypto is similar to what you do with traditional money: Indian rupees, euros, dollars or British pounds. Cryptocurrency trading makes buying, selling, storing/saving, exchanging and transferring digital currencies as easy as a click.
To start doing so, you need to open crypto savings account on a secure and reliable exchange platform in India. Then buy the cryptocurrency you choose to deposit into your crypto savings account.
Saving in cryptocurrencies is the easiest way to raise the rate of return on your money in the medium and long term. But first, you must map out a proven efficient cryptocurrency investment strategy. If you are getting into cryptocurrency trading, it is vital to do it with a professional.
The investment strategy is essential in increasing the chances of getting a better return on your crypto investments. It is critical to know that Crypto Currencies do not have sovereign backing and, therefore, can also turn worthless. Remember that these investments are not protected by law. Consequently, it is wise to understand the pros and cons of these venture investments before you start investing in digital assets.
Crypto exchanges offer cryptocurrency savings alternatives from Bitcoin and well-known newer Altcoins. The saver obtains a rate of return for their investments, depending on the cryptocurrency they choose to save.
The investor must learn to identify which cryptocurrency has the best potential for investment. Most of the money a fund generates is via its best long-term crypto investment holdings. They must be time-tested cryptos that have withstood depreciation and the volatility that the market generates.
Several cryptocurrencies have proven their strength over time. They are mature or consolidated projects that have significant financial backing behind them. Some of these cryptocurrencies have not stopped appreciating over time despite the vagaries of high volatility. But such projects are few, and the time scale of the investment matters.
You have to know how to identify the advantages and disadvantages of cryptocurrencies with each other to weigh a good investment. As part of the long-term cryptocurrency investment strategy, you should analyze several factors or elements when choosing the proper crypto for your investment. Over the last few years, some of the best long-term crypto investments have been into the infrastructure layer of the crypto space. Layer0, Layer1s and Layer2s like BTC/ETH/SOL/AVAX/POLYGON have generated massive returns.
Average investors in India do not have much money to spend on these investments. However, some of the most expensive ones are also the safest as an investment, esp BTC or Ethereum. Price on its own, however, is not an indicator of the coin’s potential. Some of the best long-term crypto investments could be BTC/ETH, which are already at high prices. For example, ones like Polygon/Matic are at much lower prices.
The cryptocurrencies with a growing volume of transactions have the best market prospects in the future. Volume is a valuable indicator to verify the interest of a digital asset at that moment and make future projections.
Growth and adoption
Crypto adoption potential and its performance since launch is another important indicator to keep in mind in long-term cryptocurrency investment strategy. Adoption is associated with the credibility generated by the digital asset due to its consistency and underlying technology.
It is critical to choose crypto because almost all digital currencies have a maximum supply. Upon reaching the emission limit, usually through mining work, it is assumed that there will be no more production of new tokens. Some cryptos have a built-in mechanism to burn or remove their cryptos from circulation. This action of burning a coin/token decreases the available supply and acts as tends to push up the price.
Other essential factors to consider to identify the best cryptocurrency are:
Community: Monitoring the cryptocurrency through its community shows the genuine interest of its followers in the asset. In the forums, there is much information and critical opinions about the solidity of the project. They are also a source of permanent consultation to know in which direction it is going. Some of the best long-term crypto investments tend to have a strong community aspect for the development of the protocol as well as its users.
Fundamental analysis: It is related to the technical bases of the investment. It is the analysis carried out by traders in the stock market to study an asset. It is used to calculate the behaviour and the theoretical price of the asset in the market.
The project team: Who is behind the cryptocurrency is a must to foresee its course—the team’s experience, philosophy, goals, ambitions, etc. The reputation of the project largely depends on this. Some of the best long-term crypto investments are made on the backs of legendary teams. For example, Polkadot (DOT) was a project by Dr Gavin Wood, also the co-founder of Ethereum. Early ICO investors made around 150x of their investment
Technology. It is a crucial factor that contributes to the success of a cryptocurrency project and leads to an effective cryptocurrency investment strategy. The technology behind crypto represents one of cryptocurrency’s most important advantages (or disadvantages) over its competitors.
White book. A white paper usually accompanies the launch of a new digital currency. There, the purpose of the cryptocurrency, technology, operation and general vision of the project are described. To successfully evaluate a cryptocurrency, it is imperative to read and analyze its white paper.
Until now, the best long-term cryptocurrency investment strategies are based on cryptos such as Bitcoin (BTC), which has proven to be a very profitable investment throughout its history. Similarly, Ethereum (ETH) is due to its versatile blockchain and the professional team behind the project. Along with other successful cryptos in long-term investment plans such as Chainlink (LINK), Polkadot (DOT), Uniswap (UNI), Solana (SOL) and Binance Coin (BNB), to name a few.
The key to maintaining a healthy and profitable investment portfolio is diversification. That raises the odds of profit if you’ve kept your portfolio balanced throughout the investment period. One of your goals should be to build a long-term crypto portfolio that outperforms other asset classes. By being conscious of your choice, you can invest in high quality crypto assets that can stand the test of time and appreciate to give you very good returns
Digital currencies are an excellent option to diversify the portfolio and capture sudden movements in the crypto market. But they are also for long-term gains by letting crypto with historical returns continue its growth cycle.
Of course, cryptocurrency is a more risky investment asset class than any other market asset class. Just as there is the possibility of losing the money invested, it is also possible to obtain high returns in a given period.
Diversifying the investment portfolio is as important as choosing a cryptocurrency that offers security and certainty for our investment. The long-term cryptocurrency investment strategy has the advantage that it is a safer investment, less expensive and easier to plan.
Having a long-term plan is a recommended cryptocurrency investment strategy. The investor expects an increase in the digital asset’s price for a reasonable period. This period usually ranges from six months to a year. But it could also be for several years, according to the strategy outlined by the investor. At the end of the period established for that investment, the investor sells the assets and strategically withdraws the earnings on the investment. You can then wait for the price of that or another cryptocurrency to drop again to buy low and roll over your investment, hoping the price will rise again.
The long-term investment plan can be developed in parts or successively. As long as they have their money invested, long-term investors can earn interest on the digital currencies they hold in their investment portfolio.
Some platforms offer high returns (12% and more) to the saver for accumulating cryptocurrencies and keeping them for a particular time in the contract.
The benefits of holding a long-term crypto portfolio can be summarized as follows:
Here are some of the most common long-term cryptocurrency investment strategies:
Buy in Initial Coin Offerings (ICO)
It is simultaneously one of cryptocurrency’s riskiest and most productive long-term investment strategies. They are very speculative bets made by professionals and more advanced crypto investors. This strategy requires a lot of experience and a remarkable ability to identify a diamond in the rough.
Buy the Dips and Hold
It is another very successful strategy that requires extensive crypto market knowledge. Any novice investor might believe buying when crypto is down is wrong. However, that is just the time to enter the market and start trading. A good strategy for your long-term crypto portfolio might be accumulating blue chips like BTC/ETH at lower prices and holding.
When it is a solid digital currency, drops caused by events, news or speculation do not last long. Savvy crypto investors buy when the market is down (undervalued) and sell when it is up (overvalued). The strategy of “buy the dip” does not require daily monitoring of the asset, nor does it cause significant expenses to the investor.
Dollar-Cost Average (DCA)
It is one of the most used cryptocurrency investment strategies by investors as it reduces the impact of cryptocurrency volatility. It consists of progressively investing a specific amount instead of doing it all at once. DCA is one of the best strategies to employ with your long-term crypto portfolio. Just be conscious of betting on the blue chips. Altcoins tend to crash faster than the blue-chip ones during a bear run.
This strategy also allows you to maintain a fixed investment in cryptocurrencies and withdraw profits periodically according to the returns. The investor invests his money in both rising and falling markets.
Finally, it is worth insisting that you should always consider the risk in any investment strategy in cryptocurrencies. But playing for the long term, as has already been explained, has more significant benefits for the investor and lesser risk. Therefore, it is one of the best long-term crypto investment strategies.
A cryptocurrency portfolio is a set of digital assets the investor has chosen as a part of their holdings for short, medium or long-term returns. It can be anything from a diverse group of cryptos to Bitcoin ETFs, NFTs, or real estate in the metaverse.
Before investing in crypto-assets and creating an investment portfolio, the investor should have studied the market in which he wishes to operate. Then you need to choose the best Crypto Asset Management Company and understand their performances and strategies.
This plan will depend fundamentally on the preferences of the Crypto Portfolio Management firm and its key fund manager. All investors must establish a plan, whether a beginner or an expert. A written plan with clear objectives helps avoid deviations along the way.
The strategic investment plan created by the crypto fund manager will indicate what you want to trade, how you will do it and at what points you will enter and exit if you sell.
A Crypto Portfolio Management firm needs to manage an investment portfolio correctly. Some Crypto Asset Management companies offer Crypto Portfolio Management and Crypto Wealth Management services.
Cryptocurrency portfolio management is all about creating and managing a basket of digital assets. Suppose the crypto portfolio manager operates exclusively with cryptocurrencies. In that case, he may have Bitcoin, Ethereum, Link, DOT, BNB, Solana, or any other digital currency of his preference with which he hopes to achieve returns.
Crypto portfolio managers must be clear about their assets’ return expectations. Are you looking for a basket of investments with less exposure to volatility? Or are you a more aggressive investor and take more risks to raise your bet for higher returns in the short term? Or do you prefer to buy and hold blue chips and not worry about short-term volatility?
They are two very different investment approaches. One follows a strategy with a very active system, and the other uses a passive system. The latter has the advantage that your portfolio will have much lower operating costs and commissions and reduce risk.
Instead, Crypto Asset Management firms who opt for the active approach must constantly keep an eye on the market. They are traders who trade crypto assets, perform technical analysis and track signals for profit opportunities.
Behind the crypto portfolio management process is usually a crypto wealth manager. A professional manager who is competent with the financial and operational knowledge of the market can help you make your investment achieve its objectives. Their function is to guarantee that the cryptocurrency portfolio is managed in the most profitable way possible while reducing investor risk.
Investments in crypto portfolios are not entirely risk-free. There will always be black swans (unexpected events) or situations that generate ups and downs in the price and performance of assets.
It is even more so when it comes to volatile assets that they generate higher returns than any other on the market, precisely because of their nature. In addition, cryptocurrencies are part of a rapidly developing industry sector.
Risk tolerance is simply the risk of loss you are willing to take. Measuring it is not easy because it involves the experience of the investor or crypto wealth manager operating in the market and their profile.
Experts affirm that without losing a certain amount of money in losses, it is tough for an investor to identify their risk tolerances. That is why most brokers or exchanges offer beginner training by carrying out operations on their platforms without real money in paper trading.
Although the truth is that when we invest real money in a trade or investment, we feel the emotion of the game. Once the person has determined their level of risk tolerance, it is essential to have clear objectives so as not to despair or make mistakes that can be costly.
When investors can accurately measure their risk limits and invest in a cryptocurrency portfolio that accurately reflects their risk tolerance, time horizon, and personal goals, they will better achieve their financial goals.
As you look to identify the best among the crypto portfolio management companies, you will need to ask the portfolio manager questions about risk mitigation strategies, the risk tolerance level at the portfolio levels, understand how they manage their crypto portfolio and get a good sense of the mental make-up of the fund manager. A good crypto portfolio management company will help you assuage your fears and show a deeper understanding of the market, along with sharing their strategies and temperament, which are essential in helping you make the right choice.
Some Crypto Portfolio Management companies believe that managing a portfolio means only going long on cryptocurrencies. One of the principles that the crypto portfolio manager should keep in mind is diversity. In maintaining a balanced portfolio, it is necessary to select a diverse group of digital currencies. A diverse portfolio also gives the investor the advantage of choosing a better-performing currency. Just as they don’t all rise simultaneously, they don’t fall together. Each of the 17000 existing cryptocurrencies is trying to outdo itself to compete, and it’s the role of the portfolio manager to ascertain and identify asymmetric risk and uncorrelated assets. Rebalancing portfolios and managing asset weights is a crucial responsibility of any Crypto Asset Management co.
Many Crypto wealth management firms use a wide range of portfolio trackers that allow you to gather all the assets in one place. This makes it easier for crypto portfolio managers to track investments more efficiently. When the investment portfolio is extensive, it becomes more challenging to track investment gains and losses.
Here are some of the best crypto portfolio tracking tools that top crypto asset management firms use worldwide.
It serves to track more than 300 crypto exchange platforms and multiple cryptocurrencies. It is a very secure platform that shows market fluctuations in real time. It offers performance charts and has a unique built-in tax function.
It is a handy free crypto portfolio tracker to monitor transactions. It allows you to create multiple portfolios but lacks certain premium features like other paid tracking platforms.
This premium tracker, available for PC and mobile devices, provides personalized crypto market news. It offers analysis and graphs on the growth of a particular asset or the entire portfolio. It also shows which cryptocurrencies are the most profitable and generates the most losses and exchange fees.
This investment tracker provides a bird’s eye view of the cryptocurrency investment portfolio. The tool is designed for diverse portfolios, including digital assets and other securities. It also has a news section that allows analysis of the transaction history.
It is considered one of the best tools for tracking free crypto portfolios, especially for crypto wealth managers whose trading frequency in the market is lower. You can make manual entries, and you can also set up multiple portfolios.
These four easy steps will help the crypto wealth manager to set up their crypto investment portfolio hassle-free:
1. Study and master the basics of investing in cryptocurrencies. Dip your toe and invest in cryptocurrencies based on your research. Investing in a business, you don’t know well or understand is an easy mistake. So, better get good advice on cryptocurrencies and how the crypto market works.
2. Analyze various types of crypto assets. In addition to Bitcoin and Ethereum, there are hundreds of altcoins. Many of them are projects with innovative proposals and very high growth prospects.
3. Choose cryptocurrencies according to their performance and investment prospects. Many start with known assets that have proven to be mature and safer investments over time. You can then move on to other newer cryptos, monitoring their performance, updates, and market capitalization.
4. Choose a popular cryptocurrency platform to store your assets and track your investment portfolio. Remember that the exchange is your bank of crypto funds. You know you have them because you trust them. If you trade with a professional crypto portfolio manager, he will tell you which one is the most suitable.
5. Divide your portfolio according to investment risk (high, medium and low). Whenever you invest in cryptocurrencies, let your risk tolerance be your guide. To help balance your portfolio, you can add stablecoins mixed with higher-risk emerging projects.
Since the crypto market is so volatile, it is advisable to rebalance the investment portfolio from time to time. Crypto wealth management firms have wealth managers whose sole function is to manage your crypto portfolio to deal with the volatility and asset allocation of each cryptocurrency in the basket. The modification or rebalancing of the portfolio is nothing more than the realignment of risks with the financial strategy by weighing the assets the investment portfolio holds. According to the risk objective and the investment goals set, it consists of buying or selling assets. Portfolio rebalancing allows the investor to average a better price when in losing positions—at the same time, preventing market movements from affecting the crypto wealth management firm’s strategy.
Knowing your investment style and understanding your risk tolerance levels are essential in the area of crypto investments. Knowing both can help you identify the right crypto portfolio management companies that can help manage your crypto portfolio.
Crypto assets are among the investments that need more frequent portfolio rebalancing. Trusting and working with the right expert and crypto wealth management firm will allow you to sleep better, knowing that your funds are safe in the right hands.