The best digital currencies for long-term investment
There are thousands of different cryptocurrencies out there from Bitcoin and Ethereum to Dogecoin and Tether, which can leave you feeling a bit confused about the best cryptocurrencies for long-term investment.
To help you search for the best cryptocurrencies for long-term investment, we will share with you through this article the best cryptocurrencies for long-term investment.
Before nominating the best cryptocurrencies for long-term investment, let us give you our perspective on cryptocurrency and the investment philosophy of most successful investors.
Reduce the risks
Risks are an integral part of investing in cryptocurrencies, so it is best to always be prepared. Before we tell you about the best cryptocurrencies for long-term investment, let’s take a look at some ways to protect yourself from risks.
Don’t invest money you can’t afford to lose: cryptocurrencies are volatile, so you can make or lose your assets in just one week. There are many currencies that are destined to fail, so do not invest the money that you need so that the consequences are not dire if the market crashes.
Start with the emergency fund first. You should not treat the investment as a one-time opportunity. Make sure you save for priorities and emergencies before you think about investing.
Do not invest more than 5% of your total portfolio: Make sure that your digital assets are only a small part of your balanced portfolio, so that they are not affected too much by market volatility.
Use a good digital transaction app: Find the most secure platform to store your assets. An offline cold wallet may be the best option in terms of providing additional protection against hacking.
Do your research: You are not required to become a blockchain expert, but you do need to know the basics. How will you be able to choose the best digital currencies for long-term investment?
Invest for the long term: Don’t look for quick wins, take a long-term investment approach to avoid panic buying or selling, and focus on currencies that have a real interest and are likely to perform well over time.
If you only allocate a portion of your total portfolio to invest in cryptocurrencies, you have to be prepared for a loss.
You must first look at the basics of the digital currency and understand it well before investing in it. No one will want to invest in a currency with a short life cycle.
Best cryptocurrency for long term investment
1- Bitcoin (BTC)
It is not surprising that Bitcoin heads the list of the best digital currencies for long-term investment, as it is the pioneer of the blockchain technology itself. It currently hovers around 750 million market capitalization and this is due to it being the oldest digital currency.
2- Ethereum (ETH)
Ethereum is a smart contract platform and it is the second choice in the list of the best digital currencies for long-term investment, as it is the second largest currency in terms of market value with more than 400 to 450 billion dollars. It is worth remembering that Ethereum is the platform while the currency you may invest in is called Ether. This coin is usually used to pay gas fees on the Ethereum network. What sets Ethereum apart from Bitcoin is the fact that it runs smart contracts, where developers make applications on the Ethereum network to run smart contracts. Ethereum is currently trading around 2,500 to 2,750 coins, which is pretty insane considering it was trading for $150 to $200 a coin a year ago. The current market cap of Ethereum is around $250 to $300 billion at the moment.
3- Cardano (ADA)
Cardano is another smart contract platform that aims to be slightly better than Ethereum in terms of size, speed, and power efficiency. Cardano was founded by former Ethereum co-founder Charles Hoskinson, and the project was launched in 2017.
The main differentiating factor between Bitcoin, Ethereum, and Cardano is that Cardano operates using a proof-of-stake consensus model. This means that it allows the investors in it to verify the transactions. So the more Cardano you have, the more it becomes possible for you to actually redeem these tokens through what is called Proof of Stake which incentivizes people to stay on the network.
Cardano seeks to connect different blockchains, allowing you to transfer assets from one blockchain to another. Currently, over 70% of all ADA tokens are stored in the Cardano network, which has resulted in lower supply and lower price volatility for Cardano in general. Cardano is currently trading at 1.55 per coin which means it has a market capitalization of around $45 to $50 billion.
4- Internet Computer (ICP)
The fourth cryptocurrency that we nominate in our list of best cryptocurrencies for long-term investment is the Internet Computer, a cryptocurrency created by the Dfinity Foundation, a non-profit scientific research organization that has raised $121 million from high-profile venture capitalists.
Dfinity has been silently working on this coin for the past five years. The initial coin went live on May 10th of this year and was immediately traded on Coinbase Pro which is very difficult, coins usually exist for a while before coinbase adopts them.
Dfinity and Internet Computer are looking to decentralize developers and entrepreneurs and reduce risk. Let’s use an example app in the Apple App Store. You can put your app on the Apple App Store and every time you make a sale it will take 30% of your earnings. But if Apple wants to change this rule and make it 35% or more, you have no say in it. Likewise, if you are a content creator or if you are working on a platform like Tiktok and then something goes wrong, your entire business will shut down.
ICP coin is currently trading at $60 a coin, but it is very volatile. It is now considered one of the twenty largest cryptocurrencies by market cap, 469 million coins have been created, but so far, only 26% of them are actually in circulating supply, for a total of about 123 million.
5- Chainlink (LINK)
The last digital currency The best digital currency for long-term investment is Chainlink, which seeks to connect smart contracts with the outside world. Let’s say you have a smart contract between you and a friend who you bet on the NBA championship. You think the Golden State Warriors are going to win the NBA championship, and if that happens, your friend will owe you a thousand dollars with this smart contract. The problem here is that the smart contract does not know who will win the NBA championship. Chainlink looks to connect those dots and feed that data from the outside world into the smart contract, where your smart contract will automatically execute when the Golden State Warriors eventually win the NBA championship.
This currency is very volatile, it can go up 20 times and also down 80% in one day, so keep that in mind before you invest in this currency.
How to search for the best digital currencies for long-term investment
There are 5 steps you should take as you prepare to find the right cryptocurrency for you:
1- Read the white paper
If you are interested in a currency, you should read its white paper. This will give you the bases and goals for that coin.
2- View the website
A cryptocurrency website will usually list its roadmap, what it is trying to achieve, and its general vision.
3- Understand the offer
You should look at the ceiling of the supply offered by this currency and also how it is created and depreciated.
4- Find the backgrounds of the founding team
You have to know how good the founding team is, their background and how much confidence they exude. Just like investing in a company’s stock, you have to know who is leading the company to ensure its progress and success.
You have to know what people say about this currency in terms of the pros and cons, then weigh it to make sure of its validity and quality.
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