When starting to invest in cryptocurrencies you will come across several terms that you probably won’t be able to understand, at least at first. One of the most common ones you will encounter are short-term and long-term investments.
In long-term cryptocurrency investment you should hold the investment for a minimum of 6 months to 1 year, since you should expect the price of the crypto asset to increase over time. In some cases, long-term cryptocurrency investors hold their investments for several years.
Since active trading increases transaction fees, by using this strategy and taking a long-term view, without moving your investments after the purchase, you will not incur any trading fees. Once the desired time has elapsed, you can choose to sell the cryptocurrencies in parts at different times or all at the same time.
However, some investors do not want to wait decades for an investment to generate results. Many of them prefer quicker results from short-term investments. Short-term investment means investing in stocks or other assets in a short time frame, but there is no standard definition of what constitutes short term.
Professional stock traders may consider a short-term period to last minutes or hours and they are often looking to make many small profits in a short period of time. Thanks to short-term investment you can make substantial profits in a very short amount of time and the money invested per transaction is usually substantially lower. Another advantage is that you have some flexibility, since you do not have to tie up your money for an extended period of time. You can also start small and see what works and what doesn’t work. This makes short-term investment suitable for those who have never invested or just started investing and want to discover the crypto world without taking too many risks.
Nevertheless, cryptocurrency trading is still a new concept. In fact, all crypto assets are relatively new: for example, bitcoin (BTC) was born in January of 2009, so it is only 13 years old. Because of this, fewer professional stock and currency traders are as comfortable trading cryptocurrencies as they are trading currencies and stocks. This is not necessarily due to the volatile nature of cryptos, which has both pros and cons, but to the youth of the sector. However, digital assets continue to gain traction and more and more people are currently choosing to invest in cryptocurrencies.
