How to Invest in Cryptocurrency Using Long-Term Strategies: Guide for Beginners [2021]

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In the short term, the value of cryptocurrency rises and falls drastically. But, using Bitcoin as an example, the trend over the years has been upward. Investing in cryptocurrency with a long-term strategy is a way to avoid the volatile cycle and fluctuations we see over a short period. This approach works on the assumption that the upward trend in value will continue over several years. 

This approach is known as holding in the stock market—you buy a stock and hold onto it for years or decades. In the world of crypto, the holding has been memeified, and is known as HODLing. The idea is the same. Buy and wait for it to grow. 

While you’re waiting 20 years for your crypto to rise in value, you can earn additional value through interest payments—platforms like Midas.Investments are intended to help people earn interest off their crypto while they hold it. 

If holding sounds a bit dull to you, there’s also an exchange where you can buy and sell a wide range of crypto for short-term investments. 

Like any investment, there are risks, and it’s important to do your research before diving in so that you can protect your investment.

Earning Interest

This is one of the easiest, and lowest risk, ways to earn money off your crypto investments. First, of course, you’ll need some crypto. You can buy in by depositing your existing bitcoin, or you can buy from the platform. Either way, you’ll need to set up an account before using a platform like Midas.Investments.

Once the account is set up, you transfer your crypto into the account. From there, you can choose which currencies you’d like to earn interest from. From this point, you can embrace the HODL mentality and just watch the interest payments roll in, or you can take a more active role by investing in various coins.

What Is the Interest rate? How Does It Work?

The interest rate varies depending on which platform you choose and which currency you choose on that platform. Depending on what you choose, you can see returns from 6% up to 24% or more. 

Earning interest in crypto is similar to the way banks pay out interest. The money you deposit is lent out to others by the platform for a set interest rate. In return, you are given a return on that interest rate. Your crypto is pooled together with other lenders, and funds are drawn from that pool to be distributed to approved borrowers. 

On Midas.Investments, you invest using the shares platform. Here, you choose a coin with favorable rates, invest using your deposited funds, and manage your portfolio. If you’d rather use the platform to buy coins rather than investing in them for an interest payment, you can do that too. 

About Assets: BTC, ETH, USDT 

The top three Cryptocurrencies by market cap are Bitcoin (BTC), Ethereum (ETH), and Tether (USDT). Each one is unique, with the only commonality being they’re all built on blockchain technology.

Bitcoin, the first cryptocurrency, is by far the world’s largest and most valued. Its value increased significantly between October 2020 and January 2021, when it broke $40,000. It then rose to $60,000 before settling back to its January levels in May of 2021. Due to cryptocurrency’s volatile and speculative nature, it’s hard to say where Bitcoin’s value will go from here.  

Bitcoin is purely currency and can be thought of like gold. It’s a store of value and can be used to buy things.

Ethereum, on the other hand, is more than just money. If Bitcoin is gold, then Ethereum is a diamond—also valuable as a store of value (in the form of the Ether (ETH) coin), with an additional industrial function. In this case, that function is the programmable nature of Ethereum, which has made it a popular choice for developers. An entire ecosystem of decentralized finance apps has been built on the Ethereum platform. 

The value of ETH tends to follow BTC, and similarly, has seen significant gains since October 2020, including a spike and readjustment.

Tether is what’s known as a stablecoin, with its value tied to the US dollar. It was created to minimize the volatility common in other cryptocurrencies. If you’re looking to invest in crypto but want to avoid the wild price swings that crypto is famous for, then stablecoins are a good option.

Interest-Earning Platforms:

Midas

Midas.Investments is the custodial crypto-investment platform focusing on producing passive income on the core assets, such as BTC, ETH, USDT, BNB, and DeFi market. started in 2017. They’ve made an effort to build a secure and safe platform that protects your assets and your privacy. 

What assets are available?

With more than 40 coins available on the platform, there’s a wide range of options for investing. The interest rates are particularly attractive, especially on the more popular coins. 

  • BTC – up to 17%
  • ETH – up to 23%
  • USDT – up to 17%

Binance

Binance is the largest crypto exchange. With its size comes security in the sense that it won’t just disappear overnight. But that size also makes it a target for hackers.

Interest rate payouts attract users or investors, which is why you often see less well-known exchanges offering higher interest rates. Binance doesn’t need to use this tactic to attract users, so its interest rates tend to be lower. 

  • BTC – 1.20%
  • ETH – 0.24%
  • USDT – 2.00%

Blockfi

The Blockfi platform provides many of the same services you would find at a traditional bank, except using cryptocurrency. You can earn interest on holdings, borrow, buy and sell crypto. It’s not a bank, though. 

With a Blockfi savings account, you can earn up to 8.6% interest. A trading account allows you to buy and sell crypto as well as earn interest. The interest payments vary depending on how much you’re investing, with rates declining the more you invest. This reduction begins at .5 a coin for BTC, and five coins for ETH, both of which represent a significant investment at current rates. 

  • BTC – .5-5%
  • ETH – .25-4.5%
  • USDT – 9.3%

Investing in Cryptocurrency for Long-Term Gain

Cryptocurrency is still in its early stages. Bitcoin, the most valuable and oldest coin, was released in January 2009. Ethereum, the second most popular, was released in 2015. 

With traditional investments, long-term investments tend to begin after ten years. Bitcoin is only just starting to qualify for the bare minimum of a long-term investment if you had the foresight to buy it in 2010. And if you did, you could have bought it for $0.08 per coin. Today, Bitcoin is trading at $40,000 per coin. In hindsight, Bitcoin was a very good long-term investment. 

The question no one can answer is whether or not it will continue to be a good long-term investment, especially if bought at today’s prices. Other coins have seen similar rises, although none to the extent of Bitcoins meteoric success. 

Cryptocurrency remains a highly speculative market, but there has been a general upward trend to the market. To date, a buy-and-hold approach has proven successful. Of course, in investments, past success is no indication of future returns.

Develop Your Own Strategy

Vigorous research – reading everything you can find – is essential with cryptocurrency. For each topic – such as investment strategy – you should seek out multiple sources of information. In other words, click on multiple links in your Google search. This way, you’ll read varying opinions. And when it comes to crypto, there’s a wide range of opinions on every topic. Armed with this information, you’ll then be able to draw your own conclusions. 

It helps to become familiar with commonly used strategies, such as the dollar cost average, and the golden cross. Starting with proven strategies will help you learn the market while developing your own strategy. 

It’s important to note that the definition of long-term varies. In trading, long-term is 18 months, whereas, with a hold strategy, long-term is measured in decades.

Choose Fundamental Assets

Many exchange platforms, including Midas.Investments, use Bitcoin as their base currency, meaning you buy in with Bitcoin, then use that currency to buy others. Other platforms work the same way but use ETH as their base currency. All this means is that you need to know which crypto to buy before you start trading on a chosen platform.

Next, you need to decide which assets you’re interested in buying. You could stick with the more popular coins or try to find the next Bitcoin among the upstarts.

Diversification Strategy

Like the stock market, having a diversified crypto portfolio will provide a buffer from losses by not investing too heavily in a single currency. In technical terms, this is called mitigating risk. 

Even with a diversified portfolio, the value of many altcoins follows the rise and fall of Bitcoin. To balance out your portfolio and provide a bit of stability against Bitcoin’s volatility, you can add stablecoins, such as Tether, to your portfolio. 

In addition to a variety of coin types, you can further diversify by investing in various industries or by geography, as well as time diversification, which involves slowly building your portfolio in small chunks over time.

Should I Invest in Bitcoin?

Bitcoin is a good way to diversify a traditional investment portfolio. Cryptocurrency is still relatively new, and although Bitcoin has seen a recent surge in value, these are still early days. Some analysts feel Bitcoin is destined for a value of one million dollars in the near future. Others feel it will be worthless in 10 years than it is now. The answer to whether or not you should invest in Bitcoin for the long term really depends on which side of the argument you feel is correct.

Will Altcoins Appreciate Long-Term?

Altcoins, aside from stablecoins, tend to be tied largely to the price of Bitcoin. But, with the crypto market being so young, that could entirely change in the mid to long term. With altcoins, the value tends to be tied to the project they are connected with. The better the project, the more valuable the coin. This is, in part, what has helped ETH rise in value – Ethereum has proven to be a robust platform on which many apps have been built, proving that it has value beyond the perceived worth of a coin.

What Are the Risks?

btc_volatility_risks

There’s no doubt that Cryptocurrency is a risky investment. There’s a good chance that you will lose everything. Of course, there’s a chance that you will turn thousands into millions, too, which makes it so attractive. There are three main risk factors facing crypto investors. 

Volatility. The price of Bitcoin and altcoins fluctuates wildly, sometimes losing as much as a quarter of its value in a day, only to regain it the next. FOr those looking for a stable investment, this is not the place to look. 

Speculative. The nature of cryptocurrency and what is pushing its rise in value is speculation. People think it will rise in value, and they are betting on that rise with current investments. 

Some analysts feel we’re in a crypto bubble. If so, the bottom will fall out of the market when it bursts, and prices will plummet. We saw the same thing happen with the dot-com bubble in the early 2000s.

Where Can I Buy Cryptocurrencies?

coinbase_website

Cryptocurrencies are bought on exchanges, like Midas.Investments or Coinbase. The popular coins are available on most exchanges. Smaller or more niche coins, however, are not. If you’re interested in any of these niche altcoins, it’s wise to first research which exchange offers them before signing up for an account.

What Crypto Should I Invest in Long-Term?

The top-performing coins are good bets for long-term investments, as are the coins based on systems with proven value, such as exchange platforms.

Bitcoin

Bitcoin has, to date, proven to be a good investment. For those who already hold Bitcoin, it will likely prove to be a good long-term investment. Because BTC is widely used to buy other altcoins on exchanges, there’s a good bet that it will retain its value.

Ethereum

The rise of DeFI and decentralized apps has shown Ethereum to be a useful platform. There is value in usefulness, making Ethereum another relatively safe bet for the long term.

Binance coin

The value in Binance coin lies in it being tied to the world’s largest cryptocurrency exchange. As cryptocurrency gains mainstream acceptance, there will be an increased need for exchanges. And, as exchanges are essential to the crypto market, they will be around for the long term, making Binance a good contender for long-term investment.

Midas coin

Midas Coin is also connected to an exchange, Midas.Investments, giving it value and providing investors assurance that it won’t fizzle out. As the Midas platform grows, so too will the coin. In terms of potential, Midas is worth keeping an eye on.

Solana

Solana is a scalable blockchain that supports app development and hosting. It has seen a considerable rise in value since January of 2021, rising to $3 dollars in late June 2021. Compared to Bitcoin, at $45,000, it’s not much. But compared to Solano’s value a year ago – less than $1 – the current price is great news for anyone who bought in early 2020. The current rise roughly follows the trajectory of Bitcoin. Whether it can maintain this new price remains to be seen. However, the adoption of Solana by developers points to it having a potentially strong future.

Conclusion 

Only time will tell if crypto is a good long-term investment. There are several signs, such as institutional buy-in, pointing to confidence in crypto, though. 

About opportunities in the crypto

There are definite opportunities to make money in crypto. From finding the next rising star to holding on as values rise over time to invest in a DeFi project, there are several approaches to crypto investing. 

Be careful choosing a DeFi solution

Thorough research is essential when looking for a DeFi project to get into. Pick the wrong one, and you could lose money when it shuts down. If security flaws are discovered, it could leave your crypto vulnerable to theft from hackers. 

Before transferring funds, be sure you are comfortable with the safety protocols the DeFi provider is using.

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