This year has been a tough one for long-term crypto investors. Inflation, high energy prices, and supply constraints have all put world economies in shambles, and the cryptocurrency market’s dip is looking like collateral damage. Anyone currently not feeling the heat either started investing in best crypto exchanges a few months ago or got out of the market during the peak mania.
Observing from another perspective, the crypto market hovering around the $1 trillion mark is a rare opportunity for long-term investors to average down and buy more cryptocurrencies before the next bull run.
This article will look at some of the best long-term cryptocurrencies to buy and hold in your long-term cryptocurrency portfolio and why you should buy them.
A Closer Look at the Best Long-Term Cryptocurrencies to Invest In
1. Bitcoin (BTC)
Bitcoin is not new to market corrections or crashes, but one consistent thing is that every single time, it has recovered. Introduced in 2009 to be a way to foster cross-border payments, Bitcoin has effectively done that, and its position as the top cryptocurrency by market cap puts credence to its popularity. Bitcoin is far from its all-time high of $69,000, and while many analysts predict further downtrends, buying some BTC or Bitcoin futures at this current price range of $18,000 to $20,000 is a fair deal. You can wait to see if it will fall lower, but it is just as effective as trying to catch a falling knife.
2. Ethereum (ETH)
One of the most discussed topics in the crypto market this year is Ethereum’s switch to the proof-of-stake. While it has been clarified that this will not reduce gas fees, the switch to the PoS is proven to make Ethereum more environmentally friendly and suitable for layer 2 blockchains. Ethereum, like Bitcoin, is trading way below its all-time of $4,891, and at this price, it is increasingly looking like a bargain, but fears of a PoW fork and post Merge fears keep the crypto market reluctant. Much more than its low price, Buying Ethereum now might mean investing a part of your money in a robust blockchain ecosystem, one with the potential to host Dapps and other blockchain features.
If you are looking for a cryptocurrency to buy now, irrespective of what macroeconomic factor is out there, Cardano is your best bet. The blockchain developers are working on an update that theoretically increases the blockchain transactions count per second from 250 to 1 million. Moreso, the attention of the crypto space has been drawn towards Cardano’s use for record keeping and authentication, as new brands like New Balance, and countries like Ethiopia seek to use the technology’s record-keeping features. Cardano might not be the best long-term crypto investments 2022, but in a few years, it will be near the best.
4. Polkadot (DOT)
Optimism around the Polkadot blockchain has primarily been because of its parachain offerings, but that does not remove the fact that the some circles prefer to wait and see how Ethereum’s switch to the PoS would play out before deciding on PolkaDot. The cryptocurrency is over 80% of its all-time high, and with strong fundamental analysis, it might turn out to be the best long-term crypto investments during the next bull run.
5. Chainlink (LINK)
Like PolkaDot, Chainlink is on the elite list of cryptocurrencies that have lost over 80% in this bear market. Even though it is not always good to gauge future performance with past records, Chainlink’s astronomical rise between 2019 and 2021 shows the market’s perception of the cryptocurrency. Its primary relevance comes from dataset integration between blockchains, and its oracle has been touted as a much-needed feature for cryptocurrencies. If the hype is anything to be listened to, Chainlink is one to hold for years to come.
Benefits of Investing In Cryptocurrency for the Long Term
Why should you make a long-term crypto investment? Why not day trading or swing trading?
1. Long-term Horizon
Most new asset classes take time to develop. While it is good practice to have an account dedicated to trading the market, having another one dedicated to investment means you can have a long time horizon for the growth of your assets, even if volatility is against you in the short term.
As cryptocurrencies mature and develop, as we’ve seen with Bitcoin and Ethereum, we also see the emergence of such assets as a new asset class. To be sure, we’ve seen large professional fund managers, such as Cathy Wood from Ark Investment Management, creating dedicated investment funds solely investing in Bitcoin and other cryptos.
2. Upside Potential
Cryptocurrencies are recently gaining attention from institutions and the government. El Salvador and the Central African Republic are two countries to have legalized cryptocurrencies, but they definitely won’t be the last ones. Most governments are discussing stablecoins and CBDCs, and the ripple effect will spill onto cryptocurrencies.
Traditional Institutions, too, are getting into the crypto mania. Several brands have launched NFTs, several hedge funds hold cryptocurrencies in their funds, and even venture capitalist funds are pouring into cryptocurrency projects more than ever before.
Expectations of Long-Term Investments in Cryptocurrency
Every investor’s goal is to make a profit, and buying long-term increases the chance of profiting from the crypto market. With the current downtrend causing a lot of cryptocurrencies to lose most of their value, the crypto market is offering a once-in-a-blue-moon opportunity to buy cryptocurrencies at a discount.
There are two ways it can go. First, many mainstream companies are looking to incorporate crypto or crypto-related features into their offerings. AMC, Paypal, Square, and several other companies have experimented with the idea of crypto payments. Also, institutional involvement in cryptocurrency – both venture capitalist investments and large funds holding crypto- has increased in 2022. Large companies and banks have also started giving their customers some crypto exposure, and the general optimism is that this exposure is just starting.
Also, with many countries undecided on their stance on crypto mining and crypto trading, we will see lots of volatility ahead when they start to take sides. Crypto went on one of its most dramatic runs to date when China banned crypto activities, and another world power doing so could spur another run.
How to Choose the Best Long-Term Cryptocurrencies for Your Investment Portfolio
1. What Is Your Risk Tolerance?
Are you risk-averse, or do you embrace risk? This decision will help you choose a cryptocurrency to invest in for the long term. Since you have a longer horizon, you won’t want to tamper with your investments.
2. Why Are You Buying Crypto?
Every investment must start with why. Why are you buying bitcoin instead of Solana? Why Cardano at this price? Knowing your ‘Why’ helps you sail through the bad times with a sense of focus and reason.
3. How and Where Do You Intend To Purchase Crypto?
After solving your ‘why question’, the next thing to answer is where you intend to secure your crypto. Is it in a cold wallet? A paper wallet? Or would you leave it in your custodial wallet? Knowing how and where you want to buy helps clarify your decision.
4. Which Crypto Goes Into Your Long-Term Investment Portfolio?
Finally, you need to know which cryptocurrencies go in your long-term portfolio and which ones stay in your trading accounts.
Is It Worth Investing In Cryptocurrencies for the Long Term?
Yes. Historically, buying when the crypto market is low has proven to be a successful strategy. How low is low enough is another question that needs to be answered but with most cryptocurrencies at more than 80% off tier all-time high, buying with a 5-10 year horizon is bound to be a profitable strategy.
The duration of your long-term investment relies solely on your choice, but it is expedient to give your assets room to grow. The end of the current bear market is unknown, but if Bitcoin’s four-year cycle is to give a hint, we might be on the way up in the next three years.
Like legendary investor Warren Buffett is known to say, ‘patience is 80% of the skill any investor needs. Your long-term crypto investments 2023 might take a while to play out. It is also important to say that the best long-term cryptos might be out of the list we have made, but the cryptocurrencies highlighted above have a track record of truth and market acceptance.