Cryptocurrency is a great long-term investment if you believe in the potential of blockchain technology. Bitcoin is seen as a store of value, and some people think it could even replace gold in the future. Ethereum, the second largest cryptocurrency by market capitalisation, also has huge growth potential. However, there are several factors that make cryptocurrency not entirely safe at present, while other signs are emerging that it is here to stay. If you want to make a long-term investment in cryptocurrencies, it is best to keep your digital assets away from trading platforms as they are vulnerable to hacking.
The best option for preserving digital assets is to purchase a hardware wallet. Hardware wallets are offline wallets that provide cold storage for your cryptocurrencies, making them impossible to hack. Ledger Nano S is one of the best hardware wallets in the world that allows you to store a large number of cryptocurrencies securely and easily. It is also important to learn about the best cryptocurrency trading platforms to trade your coins. The rankings are based on ease of use, commissions and much more.
Another critical aspect of long-term crypto investing is storage. While exchange wallets are relatively safe, leaving your assets online is a risk that can be easily mitigated by storing them offline with a spare phone or dedicated hardware wallet. Bitcoin is the world's largest cryptocurrency and its valuation is on the rise. The large number of cryptocurrencies built on the Ethereum platform, combined with the open source nature of dapps, creates opportunities for Ethereum to also benefit from the network effect and create long-term sustainable value. It may be some time before it is a smart financial decision to spend Bitcoin on goods or services, but greater institutional adoption could bring more use cases for everyday users and have an impact on cryptocurrency prices. The BITO ETF is one way for professional and individual investors to manage and safeguard their cryptoassets.
However, it does not actually own the crypto directly. It is important to keep investments small and never put crypto investments above any other financial goals such as saving for retirement and paying off high-interest debts. Nothing is guaranteed, but if cryptocurrency is bought as a long-term store of value, the more real-world uses it has, the more likely demand and value will increase. Compared to traditional equities, cryptocurrencies are extremely volatile and require investors to prepare for all kinds of scenarios. Tether cannot be bought at a low price and sold at a high price to make a profit, but it can be used to hold funds that move out of other cryptocurrencies without converting them into cash. According to the Federal Trade Commission (FTC) website, cryptocurrency scams are a popular way for fraudsters to trick people into sending money.
These scams can appear as emails attempting to blackmail someone, online chain referral schemes or fake investment and business opportunities. This allows traders to exit or enter the markets at any time without having to wait for fiat to crypto conversions. While Bitcoin may be seen as digital gold, Ethereum is building a global computing platform that supports many other cryptocurrencies and a massive ecosystem of decentralised applications (dapps). The volatility of the market is why investment experts recommend keeping any cryptocurrency investment to less than 5 per cent of your total portfolio and never invest anything you are not willing to lose.