There are many cryptocurrencies out there like Bitcoin, Ethereum, Dogecoin, etc. The investors are confused as to which one to rely on. All of these have launched with many lofty objectives to be achieved over a longer term. Even though there is no long-term success assured for any cryptocurrency, it is for sure that crypto is here to stay, and if a cryptocurrency project achieves its goals, the investors could be rewarded highly over time.
Crypto investing for beginners
For any crypto projects beginners are exploring, it is essential to wait until it achieves widespread adoption to consider it will have long-term success. It is not easy to predict the same while trying crypto investing for beginners. First, you need to be aware of the functioning of cryptocurrencies and the fundamentals of crypto transactions to gain any benefits. Let us explore Bitcoin and Ethereum in light of long-term returns.
Long-term investment in Bitcoin
As we know, Bitcoin is one of the top-grossing cryptocurrencies, which works based on its network effect. More investors are attracted to Bitcoin primarily because a larger number of people own it. Investors now consider Bitcoin as digital gold, and it is also being widely used as a digital form of cash.
Investors on the Bitcoin market believe that cryptocurrency will surely gain value over time as the supply of the same is fixed. You can see that the supply of fiat currencies like the U.S. dollar or UK Pound is not fixed. The overall supply of Bitcoin is capped to reach a maximum of twenty-one million, whereas the agency-controlled currencies may be printed to any number based on the political decisions of the state. Many of the investors believe that Bitcoin will gain more value as the fiat currencies depreciate.
Long-term investment in Ethereum
Ethereum platform offers a native crypto coin as Ether, which investors can purchase to secure portfolio exposure to the Ethereum project. Bitcoin is viewed as digital gold, whereas Ethereum is a software project which tries to build a computing platform with global coverage, which may further support various cryptocurrencies and create a massive ecosystem of ‘dapps’ or decentralized applications.
There are many cryptocurrencies built on the Ethereum platform, and so there are plenty of opportunities for Ethereum to benefit from the same network effect to generate long-term sustainable value. Ethereum also enables smart contracts to execute based on the terms agreed upon by both parties automatically. There is no need for an intermediary to oversee the contract abidance by the parties.
On consider crypto investing for beginners, it is surely beneficial to own cryptocurrency, which will help diversify your investment portfolio and offer you some better returns over the longer term. We can assume that the crypt usage may become widespread over time, which surely makes some sense for the investors to buy some crypto and keep hold of it. Other than directly buying cryptocurrencies, you may also consider some ways to profit from the surge of cryptos by considering the stocks of crypto companies, too, like Coinbase, PayPal, Square, etc.