Why are long-term investments more profitable than short-term ones?
Friends, we decided to continue the series of educational articles. Today we want to cover a very important topic that any investor in the cryptocurrency market should be familiar with. By the way, we already wrote about the investment horizon in this article — octopuscc.medium.com/26307391ca3a. We advise you to read it!
The pros of investing for the long term
To begin with, let’s figure out what are the pros of investing for the long term (from 1 year) exactly in the cryptocurrency market. They need to be understood, because the cryptocurrency market is very different from the traditional ones.
Firstly, you don’t have to constantly follow the market and the news. This is very relevant lately, as there are too many sources of information. Traders and investors who open deals in the short and medium term have to constantly absorb an endless stream of news and data, which takes up a lot of time and often nerves.
Second, as practice shows, the cryptocurrency market grows in the long term, but local falls can be very large. This can be seen in the cryptocurrency market capitalization chart below this paragraph. If you invested in the short- or mid-term, you would have every chance of unloading at the bottom of the market in the famous crypto-zima or any other short-term drawdown. It is important to remember that the cryptocurrency market is extremely volatile, but in a strong uptrend.
Thirdly, in the cryptocurrency market there is an absolutely clear list of instruments, investing in which you will definitely profit from the market growth. First of all, I’m talking about buying Bitcoin. In traditional markets, like the American market, we can also buy index funds. However, this adds additional risks and commissions associated with the management company.
Fourth, in the long term there is a better chance of making a profit. This is confirmed by statistics and market laws. The less actions an investor performs, the higher is his chance to make a profit. This simple truth has been voiced by many respected people from the investment world.
Long-term investments in the DeFi, NFT, IDO, GameFi sectors
Long-term investments are most effective in the highest-yielding sectors of the cryptocurrency market. Here are examples.
- In the IDO market, you can make excellent profits by buying tokens at an early stage of funding and selling them at the time of going public. This strategy almost always brings enormous profits, but takes time.
- In the GameFi market, it is extremely important to properly structure your assets. We recommend to invest in this market for at least 6 months, and preferably for a year. For a few months it is realistic to have time to form a pool of the right assets that can bring excellent passive income within the project. However, it takes time to get a sufficient profit from the “infrastructure” you have formed.
Tools for long-term investing
The cryptocurrency market is quite extensive. There are so many coins and tokens. We distinguish for ourselves 3 major investment tools that are excellent for the long term:
- Bitcoin. This coin is the locomotive of the entire market. Investing in it, you will definitely take part in further growth of cryptocurrencies.
- Our investment pools. We, Octopus Crypto Capital, have already proven our ability to make money in GameFi, NFT and IDO markets. As history has shown, long-term investments in our pools outperform investments in ordinary coins.
- Ethereum. “The second cryptocurrency shows better dynamics than Bitcoin, while being more stable than many altcoins.
Conclusions
It follows from our reasoning that in the cryptocurrency market you should not be subject to emotions of fear or greed. Statistics show that in 1–2 years your investment is almost guaranteed to bring you a huge return. Do not give in to irrational impulses in any case, otherwise you will miss out on your profits. Remain calm and invest for the long term, it will help your capital grow.
