Are you planning on buying a cryptocurrency on a long-term basis or because it has picked a price momentum?
For any fast-developing market, such aspects and the general mood within the financial market are greatly emphasized. One reason is the absence of previous average data to use as the foundation for crypto values. Also, if matters went sideways, the market would witness a massive departure.
However, knowing how long you can hold a digital coin will depend on many factors, and they include:
You can purchase, hold, and flourish
Many price analysis and charts assist various traders in forecasting the crypto prices over the coming months or years, including the period they intend to hold on to their assets.
The reasons why investors purchase a cryptocurrency are manifold. A few of them include:
- Seeking an alternative store of value in the long run.
- Some consider cryptocurrencies, especially Bitcoin, as a revolutionary tech.
- A few investors acquire a cryptocurrency because their colleague or friend put them into the task.
- They found a low-trading cryptocurrency and expect its value to surge later.
- To enable international payments.
Nonetheless, all these reasons appear weighty, and investors who joined the race earlier can generate returns from trading off their crypto-asset after it has surged in value.
Expectations over the comings years
How do you view cryptocurrency prices over the coming years, and for how long are you ready to hold?
As per market info, several traders from many parts of the globe believe the cryptocurrency market will increase in value by a considerable percentage in the coming few years. Although a few traders consider selling their digital coins over the coming months, many others have brushed off the idea as they plan on holding onto their digital currencies for several years.
Are you worried about your exchange platform?
Exchange platforms such as Immediate Edge offer investors tools for trading digital coins like Bitcoin, Ethereum, or other Altcoins. Many factors can raise your anxiety over your preferred exchange platform, and they are:
- Increase in withdrawal fees.
- Complicated user-interface.
- Low liquidity levels.
- Unresponsible customer service
- Security-related risks such as hacking.
- The absence of many trading pairs.
Moreover, the security factor appears a significant subject matter for many investors. Well, it’s no surprise that hackers have managed to steal approximately $1.2 billion worthy cryptocurrencies from early 2017. Also, other factors like the sudden rise of service fees and transaction cost can propel one to trade off their crypto asset.
Can you trade cryptocurrencies?
Many people are new to the concept of trading digital coins. A few months ago, crypto traders found it hard to trade cryptocurrencies because the absence of credible info made it complex to analyze previous crypto trends. For many traders, it was a make or break moment as they traded cryptocurrencies during those days.
However, when investing, it’s wise to identify cryptocurrencies that are suitable for your course. This means knowing how to take calculated risks and identifying the appropriate moment to sell off your digital coins. To shed some light, nobody can tell you with much accuracy the right moment to hold or trade your cryptocurrencies.
Although the final decision falls on the trader, it’s considered an excellent idea to heed counsel or other trading strategies from skilled traders and learn about forces that drive the financial market.
Do you have quality time to track the crypto market?
The crypto industry has experienced various trends while some coins emerged and later vanished quickly, duping investors of their cash. In addition, some cryptocurrencies plunged, only to rebound days later and record all-time highs. The Bitcoin trend is seen during 2011 and 2013. The price increased by over 50 percent, and the following year it plunged by over 80 percent. However, Bitcoin price time and again has recorded a rollercoaster period over the years.
There are many mistakes crypto holders make. One, in particular, is not knowing the right moment to withdraw their winnings in the event of a price surge. However, the greatest error a trader can make is to purchase crypto at a higher price, while other traders are thrilled and later under-sell when the crypto price starts to plunge.
Have you invested all your capital in one crypto?
One of the reasons for knowing when to hold or sell your asset is recognizing that it’s never a good strategy to store your crypto assets under one wallet address. The market is encircled by several risk factors, while cryptocurrencies are highly volatile, meaning they can plunge or surge quickly.
Consider your investment tactics if you have invested all your capital on a single digital coin. Moreover, you can employ the right strategies that will see your digital currencies bring better results. You can hold a certain percentage of crypto and sell off the other amount, which will help you reduce the risk factors within the sector.
Does fear or anxiety affect your investment choices?
Although the crypto market has its own sets of risks, it’s not enough grounds to undersell your asset based on emotions. You can sell off only for the crypto to pick a price momentum days later.
As an alternative, you can sell a small portion of your digital coin if you experience a cash crunch and hold the rest of the amount. This move will allow you to maneuver the financial constraints and await your other crypto portion to pay off over the coming days or months.
Economic value of the digital coin
If your digital coin does appear to indicate any economic potential in the long run, it’s time to sell it. Some cryptocurrencies seem quite over-valued. If they don’t rank among the best coins or have excellent features, there is no point in keeping them.
Holding and selling your digital coin will depend on your investment target. If you undertake a short-term view, you can sell your crypto at a better price when they surge. However, when aiming at a long-term approach, ensure you have done your research well on your preferred cryptocurrency.