4 Ways To Invest In Crypto For Short And Long Term Investments

Buying cryptocurrency is easy than ever. But making real money on it. Well, that’s a different matter entirely.

Essentially, if you want to make money through crypto there are two ways of doing this. Either through a considered long-term ‘buy and hold’ strategy, or via a quick, short term ‘day swing’ approach.

In this article we’ll give you a quick rundown of what both involve. As well as showcasing 4 ways to invest in crypto for short- and long-term investments.

What to Know Before Investing in Cryptocurrency

Even though you might have heard stories of people who have got very rich from investing in crypto, it is important to recognise that cryptocurrency is a very high-risk investment.

In fact, these markets are so unpredictable and volatile that it is not uncommon for something like Bitcoin to experience a week where its value plummets by upwards of 25%, only for it to peak at record levels 7 days later.

If you do decide to buy crypto, it’s a good idea to only devote a small part of your portfolio to it for now.

It’s worth noting too that in many countries, cryptocurrency gains are taxable. 

Also, while your checking and savings accounts are insured for situations where you bank might collapse or get hacked. This is often not the case for crypto.

So, whilst this is a very rare chance of happening, there is a possibility you can lose all your investment through no fault of your own.

How to buy cryptocurrency

If you are to invest in crypto, one of the first things you need to do is decide on a creditable exchange.

An exchange is the platform on which you will be purchasing, selling and most likely, storing your crypto. Thankfully there are quite a few robust and reputable ones around.

This includes Crypto.com, which is one of the most popular global exchanges in the world. As well as Coinbase which is a very good platform for those just getting to grips with digital currency.

Other very good exchanges include eToro, which lets you invest in ETFs stocks and more than 30 popular cryptocurrencies, as well as Binance.US.

Choose which cryptocurrencies you want to invest in

While Bitcoin is probably the most famous of all digital currencies right now, there are in fact, more than 7,500 cryptos currently out there. 

This might seem like an overwhelming choice, but most exchanges only offer between 20 to 30 of them. 

As not all cryptocurrencies are not created equally, you will have to do some thorough research about each individual one you are interested in before investing.

However, some of the top rated and most often traded cryptos are Bitcoin (BTC), Ethereum (ETH), Dogecoin (DOGE) and Binance Coin (BNB).

Which ones you invest in, is of course. entirely up to you. But with cryptocurrency being volatile and speculative by nature, often it comes down to the simple matter of which one you have most faith in.

Decide on how much crypto to buy

After determining which types of cryptocurrencies, you want to buy, you will have to decide upon how much of it (or them) to purchase.

Opinion on this varies but sound advice could be to invest no more than 5 – 10% of your entire wealth on it. That way should crypto not work out as you hoped, you will still have enough money to comfortably retire with.

Another good strategy might be to only invest in crypto once you have accumulated at least $100,000 in safe investments. This is because it is generally acknowledged that currently, you can’t build a guaranteed future of wealth on it.

Safely Store Your Private Keys in a Wallet

After you have bought your crypto, you will then have to decide how you will store it.

Essentially you do this in what is called a ‘wallet’, of which there are two types – hot and cold wallet.

Hot wallets allow you to easily access and sell your reserves of cryptocurrency whenever you want. Whilst several security measures are put in place to protect them, hackers are getting more sophisticated in their attempts to steal crypto.

Therefore, many traders, and particularly those who intend to practice a long-term investment strategy, choose to save their private key to what is known as a ‘cold’ wallet. Typically, a USB or hard drive which they store in a bank’s safety deposit box or a home safe.

You probably don’t need a cold wallet if you are only going to invest in relatively small amounts. Although a storage option you might consider either way, is to set up a cryptocurrency savings account. As this will also enable you to receive interest on your investment.

Choose a strategy

When buying crypto you will need to work out what your end goal is.

Clearly it will be to build wealth. But you will have to determine whether this will be on a long-term or short-term gain basis.

Overall, there are two ways to invest in the cryptocurrency market. These are known as ‘buy and hold’ and ‘day swing’.

Buy and hold investors tend to buy crypto with the goal of holding them for an extended period. Banking on the fact that its value will naturally rise over time and ignoring short-term rises or falls. This would be the approach when incorporating cryptocurrency as part of a Self-Managed Super Fund.

Those who adopt an active trading day swing strategy will spend a lot of time on a daily, even hourly basis. Meticulously analysing trends and researching new digital currencies that are performing well. 

When they notice a slight downturn in their performance, they will then sell for as big a profit as they can.

Growing Your Investment

Having bought your first lot of crypto and stored it in your wallet, and with a clear strategy in mind, you can then set about growing your investment.

While buying cryptocurrency is one, albeit high risk, way to invest for long-term or short-term gains, there are some other lower risk methods you might consider adopting as well.

These are as follows:

Learn, to earn ‘free’ crypto

Several sites like Coinbase run schemes like their ‘Earn’ program which allow you to earn a small amount of free crypto just by learning about it on their platform.

This might involve earning, for instance, $2 in Stellar (XLM) just by watching a short video that lasts little more than two minutes.

If you have the time available, you could slowly add to your reserves in this way over a significant period of time.

Invest in cryptocurrency stocks and ETFs

Recently the Securities and Exchange Commission in the USA approved the first Bitcoin futures ETF. This allows you to invest in the crypto without having to buy any.

In addition, you can also choose to invest in the crypto industry itself through the purchases of shares in companies that are heavily invested in it.

The likes of Coinbase, Hut 8 Mining (HUT) and Nvidia (NVDA) could all be savvy investment options for you.

Invest in the Blockchain

Another way of investing in crypto without the need to buy any is to invest in the technology which supports it.  This is known as blockchain.

Back in 2014 only two of the world largest PLCs had any kind of investment in blockchain. Today that number is over 80.

In fact, so far has this type of investment strategy come, there are now even blockchain ETFs available.

Principally this revolves around the Amplify Transformational Data Sharing ETF (BLOK), which offers a terrific selection of blue chips and impressively performing start-ups.

Mine for crypto

If you have access to a fast and powerful computer that has a graphics card with gaming-capability, you can also mine crypto for free. 

Mining requires you to lease the processing power of your computer to participants within the blockchain. However, should you decide to do this, you would receive a few free cryptos for the privilege.

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