Hodlers, Is It A Good Strategy For The New Traders?
Comprehensive Analysis of Hodling Strategy: Evaluating the Long-Term Investment Strategy for New Traders!
By reading the article which is published in Adaas Investment Magazine, you will get acquainted with the HODL strategy and the possibility of being useful for new traders. This level of familiarity can be enough for you when you need educational information about this topic.
Table of Contents
Hodlers And New Traders
Considering the overall hype created by cryptocurrencies and assets, it is pretty natural to think about holding cryptocurrency for the long term. But there is still a significant division even among the experts regarding investing in cryptocurrency for the long term.
The technology is relatively new. Because of this, there is still a major population around the globe that is not much educated regarding cryptocurrency. To conclude, here are some prominent dynamics of crypto assets you will need to deal with for long-term investment.
High Risks
Without a doubt, the risk involved in cryptocurrencies is far greater than other non-digital assets. This is a major reason why the community still thinks that non-digital assets are the way to the future. But that can’t be labeled as entirely true.
The commodities-based assets are not volatile; that’s a fact. But the handling of such assets is an issue on its own. Plus, higher risks mean that the profit margin of digital assets is far more than any other central investable unit. You just need the right strategy in the long run.
Blockchain Security
Blockchain was invented in 2008. Comparing it today, the platform hasn’t even seen two decades in the global financial market. But even after that, the platform is performing exceptionally well and practically revolutionizing financial systems with the help of crypto-based assets. After all of this, a bit of space left for error is quite natural.
The blockchain community and developers themselves acknowledge that the platform is not 100 percent secure yet. But this is one area that is constantly under R&D session for improvement. The platform will eventually cope with it all shortly.
Transparency
The level of transparency involved in crypto-based transactions is exceptional. When we talk about the traditional banking channels, there is a lot of space left in the model that we know nothing about. Crypto-based assets introduced transparency in this sector mainly.
As a crypto-based assets holder, you are practically in control. The transactions you will be making will have proper evidence over the blockchain. Even if you are willing to invest long-term, the blockchain transaction model will be left intact. This allows you to enjoy an exceptional level of transparency as a user.
Global Access
The major reason behind the hype of cryptocurrency. Throughout the globe, the access to cryptocurrency is similar. Let’s say you have invested in Bitcoin while residing in the US. If you want to draw or trade Bitcoin while staying in UAE, you are completely eligible to do so.
The only thing you need to ensure is that the region you are residing in allows you to access trade-specific crypto units. Countries like UAE have recently allowed crypto-based trade and you can even enjoy crypto trading online. But still, some countries are in talks about allowing such assets to be traded.
Anti-Inflation Model
The major reason behind investors getting so eager to invest in cryptocurrency in the first place. The whole model of central crypto units is anti-inflammatory to some extent. In other words, economic or regional crises don’t affect the price of a crypto unit in the long run.
But there are still some loopholes left to target in this model. For example, the pump and dump model is greatly responsible for affecting digital asset valuation. Approaches are still taken to prevent such massive changes in the valuation, which are yet to succeed.
Final Note
Holding a cryptocurrency for long-term gains is a real challenge itself. There will be times when the crypto asset will fluctuate massively between ups and downs throughout this time. But that doesn’t mean you have to keep the asset stored for a specific time. Make the transaction when the appropriate profit marks hit.
The End Words
At Adaas Capital, we hope that by reading this article you will be fully immersed in the HODL strategy and the possibility of being useful for new traders. You can help us improve by sharing this article which is published in Adaas Investment Magazine and help optimize this article by submitting your comments.
