Best Long-Term Cryptocurrencies to Buy for 2022
With more than 8,000 different coins and tokens in the market, investor interest is growing rapidly. But picking the right crypto mix to maximize your long-term return can be overwhelming.
If you’re wondering the best long-term cryptocurrencies to buy this year, keep reading to find out.
5 Best Long-Term Cryptocurrencies
Here are the top five cryptocurrencies with remarkable potential as long-term investments.
1. Bitcoin (BTC)
Bitcoin is one the largest cryptocurrencies in the world by market cap . You may use Bitcoin in the market to trade goods or services or view it as one of your buy-and-hold assets in your investment portfolio.
In fact, one of the leading electric vehicle manufacturers, Tesla , began accepting Bitcoin as a form of payment. The company recognizes the merit behind accepting Bitcoin as a high risk but high reward investment. Other businesses and retail investors are following this lead by adding Bitcoin to their investment holdings.
Bitcoin may be a volatile asset when looked at from a daily scenario. However, it has been the best-performing investment asset for the last ten years. It has become more of a safe-haven investment than a currency, and you need to have a significant amount within your long-term cryptocurrency portfolio.
2. Ethereum (ETH)
Ethereum ranks the second-largest cryptocurrency by market cap. It’s both a blockchain platform and a cryptocurrency. Ethereum has emerged as the best platform for decentralized apps, also referred to as dApps. For this reason, it has become a favorite platform for developers because of its potential applications, such as smart contracts. These contracts allow you to automatically execute a function when specific conditions are met.
3. Cardano (ADA)
Cardano is another cryptocurrency to invest in for the long term. While it may not have performed exceptionally in the last few months, some of its most promising dApps are about to see deployment. Significant demand for ADA tokens would be the result.
Transactions in the Cardano ecosystem are cheaper and faster compared to other ecosystems. Those traits rest on a network whose footprint is smaller while consuming less energy in completing transactions.
Furthermore, Cardano has an upcoming hard fork combination event in February 2022. These developments create a scenario for fireworks in ADA price in the coming years.
3. Polkadot (DOT)
With a market cap of over $25 billion, Polkadot has become one of the best long-term cryptocurrencies to buy since its launch in 2020. It’s not only a cryptocurrency but also a blockchain network where developers can build innovative, decentralized systems.
The coin is built to connect with various blockchains into a single unified network. The integration allows users to access the Polkadot network’s proof-of-stake validation of security and transactions.
5. Chainlink (LINK)
Chainlink ranks as the fifth-best cryptocurrency to invest in for the long term. The Ethereum-based network provides data from off-blockchain to on-blockchain smart contracts via nodes and oracles. Chainlink also has a token called LINK that people can use to pay for services on the network.
Benefits of Investing in Cryptocurrency for the Long Term
A cryptocurrency is a form of digital money without a central management system, such as a government. You may buy goods or services using cryptocurrency, but many people treat it as a long-term investment option.
Expectations of Long-Term Investments in Crypto
A profitable investment in long-term cryptocurrencies focuses on expectations that their prices will increase over time. Your long-term crypto investment involves maintaining it for a period based on your investing goals.
Typically, long-term investors hold their investments for several years or decades to grow their returns. So, if you believe blockchain-based technology will explode in the future, investing in crypto for the long term can be a great option.
However, it’s crucial to keep in mind that investing in cryptocurrencies exposes your investment to volatility and numerous risks, such as wallet hacking. Therefore, you must understand what you are putting your hard-earned money into before venturing into the crypto space.
5 Benefits of Long-Term Cryptocurrency Investments
- Buying and holding cryptocurrencies creates a path towards financial independence while helping you beat inflation over time.
- Younger investors who have faith in cryptocurrency technology think it will get wider adoption in the future, thereby increasing its value.
- As a store of value in the long-term, the more real-world applications it has, its value and demand will likely increase.
- The long-term crypto investment gives you direct control over your portfolio. That means lower fees and better access to your investment.
- Cryptocurrencies give you a tool to build personal wealth over the long term if you invest in a small but diversified group of coins.
How To Choose the Best Long-Term Cryptocurrencies for Your Investment Portfolio
Before you venture into creating a long-term crypto investment portfolio, there are four critical questions you need to consider.
1. What is Your Risk Tolerance?
To buy into or invest in cryptocurrencies for the long term, you need to have a high-risk tolerance. Crypto values rise or fall drastically. Furthermore, there are no guarantees they will not end up collapsing.
Take time to consider what would happen to you if all your crypto money suddenly became worthless. Again, putting your money in crypto is speculating and not investing per se. You can only hope that someone will pay for more than you bought an asset for some time in the future .
2. Why Are You Buying Crypto?
Let’s say you are years away from your retirement date and you decide that you need to allocate at least 20% of your investment portfolio to aggressive investments. If that is you, then long-term cryptocurrencies are your avenue into high returns.
There is a long-term value attached to cryptocurrencies due to blockchain technology. This has infinite potential to drive innovations within the financial and other industries. Therefore, investing in crypto for the long term is like investing in the jewel in the crown that is blockchain.
3. How and Where Do You Intend To Purchase Crypto?
You may see this as trivial, but you cannot walk into any bank or financial institution and buy cryptocurrency. Peer-to-peer platforms and crypto exchanges operate under little or no regulation. That means as an investor, you lack oversight and protection offered by mainstream crypto platforms and banks.
You have the added burden to assess and evaluate differing layers of security within your preferred platform. Part of your due diligence features is finding and securing the right wallet. Your wallet may be cloud-based or a physical device you can safely keep at home. There is the additional danger that once you lose your keywords, you lose your investment also.
4. Which Crypto Goes Into Your Long-term Investment Portfolio?
Thousands of token options are available in the crypto market.
Bitcoin has the advantage of being the firstborn, having the largest market share, and currently, the most popular. These traits allow Bitcoin to maintain and increase value, making it an excellent long-term crypto investment asset.
Conversely, you may do lots of research that arouses passion into a specific innovation driving crypto less well-known. Such innovations often have white papers spelling them out. Investing in such a token may rest on personal belief and its return on investment.
In the cryptocurrency world, almost anything can trigger excessively high returns from a crypto — Dogecoin , for example. It has seen a massive rise in value, yet people often forget Dogecoin began almost like a joke .
5 Tips for Investing in Crypto
Before putting your hard-earned money into crypto, you may want to consider these tips.
1. Invest with a Strategy
You’ve probably heard of the phrase, “failing to plan is planning to fail.” This also holds true when it comes to investing. Having a strategy that works well with your investing goals is the first step towards cutting down losses.
2. Have a Risk Management Strategy
Set a limit on how much you invest in a token and stick to it. Using stop losses to minimize your losses is also a great way to manage your risk. Additionally, don’t invest in crypto with money you cannot afford to lose.
3. Diversify Your Portfolio
Investing in single crypto in this highly volatile market is not a good idea. Diversifying your portfolio by investing in different tokens will reduce over-exposer if one or more coins plummets in value.
4. The Secret is Long Term
Prices tend to fall and rise dramatically regularly. Avoid panic selling after a fall in prices within a short period. Instead, hold your investments in the market for long periods to attain the best return on investment.
Good To Know
Cryptocurrencies are highly volatile assets. While investing in digital assets is one way to amass wealth quickly, your investment portfolio can plummet in as little as one day.
Is It Worth Investing in Cryptocurrencies for the Long Term?
The right answer to this question depends on your investing goal. If you have some spare money that you won’t mind investing for one to two decades, investing in crypto is a great option.