Cryptocurrencies are seen as short or long-term investments. However, this is because cryptocurrencies backed up by great projects surge and survive the test of time, thus, giving investors long-term profits.
Even though investors look to trade cryptocurrencies through short-term strategies to take advantage of the market’s volatility, holding long-term is the best way to approach the crypto market.
There are more than 10,000 cryptocurrencies today, but crypto experts argue that as the crypto industry matures with time, 90% of these coins will collapse. The few that will survive the crypto apocalypse will go on exponential growth, making long-term holders very rich.
This guide takes a detailed look at the best long-term cryptocurrency investments and help you decide which ones to include in your crypto portfolio. Happy hunting!
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A closer look at the best long-term crypto investments
We looked at the coin’s past price performance when searching for the best long-term investments. Furthermore, we analyzed their fundamentals, market capitalization, how established the cryptocurrency is, when it was launched, and the number of token holders. With that in mind, here are the best long-term cryptocurrency investments you need to know.
1. Bitcoin
It is no surprise that Bitcoin (BTC) is on our list. Also, this is by far the best long-term investment. Bitcoin, the pioneer cryptocurrency, was created to replace fiat currencies. Furthermore, it is widely accepted as a store of value and hedge against traditional cryptocurrencies. Many businesses worldwide accept Bitcoin as payment, making the crypto asset an excellent long-term investment. For instance, Visa, Microsoft, and PayPal already transact in Bitcoin. Stripe will also let customers accept BTC as payments soon. In addition, larger banks have begun to incorporate Bitcoin as a means of payment.
Tesla briefly accepted Bitcoin but stopped. However, it might continue once mining becomes environmentally favorable. It is essential to know that Blockstream and Block, formerly known as Square, are launching a bitcoin mine in Texas that will be fully powered by Tesla’s solar array and Megapack battery, according to a report by CNBC.
Furthermore, the BTC’s supply cannot be manipulated like fiat currencies. Also, this implies that Bitcoin can never witness the same fate as Euro, British Pounds, the U.S. Dollar, and other currencies regarding inflationary practices.
Risks of investing in Bitcoin
Like all cryptocurrencies, the value of BTC fluctuates due to market volatility. Furthermore, this is evident this year as BTC’s price has correlated to the NASDAQ, thus, questioning if BTC will be able to hedge against inflation.
Nonetheless, if price fluctuations affect you, you may want to avoid investing in this cryptocurrency. But, you shouldn’t be concerned if you think cryptocurrencies can be a long-term investment. Another reason you need to consider is BTC’s price. A single Bitcoin is worth over $20,000.
2. Ethereum
Ethereum was launched in 2015 and morphed into one of the most robust smart contract networks today. However, the network allows developers to create digital assets and deploy smart contracts on its network. Ethereum has become the de facto internet of blockchains; therefore, this cryptocurrency is on our list.
Ethereum is the second largest cryptocurrency after Bitcoin and is currently the most popular blockchain. The ETH blockchain stands to gain more ground once its upgrade, “The Merge,” is fully completed. The upgrade is scheduled for the third and fourth quarters of 2022. This upgrade aims to move the Ethereum blockchain into a proof-of-stake consensus, reduce the number of coins on the platform, and decrease Ethereum’s energy consumption.
In anticipation of this upgrade, the price of ETH surged to almost 50% in the last two weeks of July, but the price has dropped since the previously anticipated August launch date has passed.
It is crucial to remember that thousands of projects are built and utilize the Ethereum network; these tokens are known as the ERC-20 tokens.
Risks of investing in Ethereum
Even though Ethereum uses blockchain technology, the platform experiences clog and overloads, allowing transactions to take a more extended period because the network uses just one route for every transaction. Again, transaction fees are high on the Ethereum blockchain network. Transaction fees (or GAS fees) on the Ethereum blockchain rose 13% in March due to the high demand for block space.
Even though The Merge update aims at solving this problem, many investors have grown tired of waiting. Again, security hacks have constantly been an issue on the Ethereum blockchain network. In 2016, a hack occurred on Ethereum, resulting in the loss of more than $50 million worth of ETH. The Merge is expected to resolve these issues.
3. Binance Coin (BNB)
BNB is the native coin of the Binance smart chain. However, Binance is the biggest crypto exchange in the world. This crypto exchange has a smart contract network that competes with Ethereum’s technology. Even though it only began operations in 2017, Binance has the most successful smart contract blockchain network. This growth level is why we included it in our list.
Like most blockchain networks today, the Binance smart chain works tirelessly to improve its network. The platform has also added many crypto technologies such as Dapps, DeFi protocols, decentralized exchanges, and Web3 apps and programs. Again, the Binance smart chain has the largest and the most liquid centralized exchange, and we expect this to continue with the platform’s inflow of users.
Risks of investing in Binance Coin
Even though BNB is the native coin of the largest crypto exchange in the world, it makes the currency vulnerable to regulatory issues. This cryptocurrency lost about 7.3% of its value in June when news broke that the Securities and Exchange Commission started investigating whether Binance followed proper procedures in its 2017 initial coin offering.
5. Cardano (ADA)
The Cardano network is one of the fastest-growing blockchain technology in the world. However, this network is arguably one of the most secured blockchains in the crypto industry. This level of security future-proofs Cardano’s blockchain and affirms its sustainability; this is why we listed this crypto-currency on our list.
Furthermore, Cardano (ADA) blockchain network is more energy efficient than other more extensive networks like Bitcoin and Ethereum, which means transactions on this network are cheaper and faster.
Cardano launched a “hard fork” last year, an upgrade to increase its functionality – enabling smart contract deployment. The platform has another update called the “Vasil” update. But once it launches, it should be able to scale the Cardano platform.
Cardano also launched a test platform called AdaSwap, where developers can build decentralized finance applications. AdaSwap could improve the blockchain’s status and boost the price of ADA.
Furthermore, Cardano is on a mission to add more technologies to its ecosystem. The blockchain platform has already integrated smart contract technologies, launched an algorithmic stablecoin, and is aimed at adding Web 3 technologies through AdaSwap.
Risks of investing in Cardano (ADA)
Although Cardano has a stable ecosystem with powerful functionalities, it may not be able to battle with more extensive crypto networks. The platform has plans to increase its adoption rate, but it remains to be seen whether the blockchain can live up to that expectation.
6. Polkadot (DOT)
Polkadot (DOT) is a newer cryptocurrency than other coins. This blockchain network offers basic abilities compared to Ethereum. This blockchain is considered Ethereum’s alternative. It offers parachains- a series of connected blockchains running alongside to speed up transactions.
Furthermore, Polkadot features protocols that allow its network to interact with other blockchain solutions. Polkadot has attracted the attention of Europe’s largest telecom company, Deutsch Telekom, which has a history of supporting blockchain technology. Furthermore, Polkadot’s ecosystem is more interactive and helps developers create new blockchain networks.
Crypto experts see Polkadot as an inevitable progression in the blockchain industry. Also, it is the next step in improving blockchain technology.
Risks of investing in Polkadot (DOT)
Gavin Wood, the Ethereum co-founder, created Polkadot in 2016 via a whitepaper. As a new blockchain network, Polkadot has a little track record for comparison, which makes it a bit riskier. Polkadot’s prices are volatile like other new cryptocurrencies, and a tangible asset does not back coins. Again, government regulation could also affect the coin.
7. Polygon (MATIC)
Polygon (MATIC) is arguably one of the most popular cryptocurrencies in the crypto market. In addition, this platform is the most successful Layer-2 scaling protocol for Ethereum. The platform has also made significant contributions to the Ethereum blockchain. Binance and Coinbase back Polygon; its token MATIC is used for payment and settling transaction fees.
Last month, Polygon announced in a press release that it launched Polygon zkEVM, “the first Ethereum-equivalent scaling solution that works seamlessly with all existing smart contracts, developer tools, and wallets.” This program performs well through a type of cryptography called zero-knowledge proofs, which helps decrease transaction costs.
Furthermore, Polygon currently has more than 19,000 Dapps on its blockchain platform. Polygon also supports the tether stablecoin, which might boost the growth of the Polygon network. Another great feature of the Polygon network is its support for carbon neutrality, which positively affected MATIC’s price in recent months.
Risks of investing in Polygon (MATIC)
Polygon has been a victim of hacks. Black-hat hackers had already stolen more than 700,000 tokens. Late last year, the network announced that it had patched a vulnerability that put about $20 million worth of its coins at risk. A hacker discovered the vulnerability and notified the Polygon team to fix it, which they did within two days.
8. Avalanche (AVAX)
Avalanche (AVAX) is a layer-one cryptocurrency that rivals the Ethereum blockchain network. Avax is the native cryptocurrency of the Avalanche network, and, like Ethereum, it uses smart contracts to support different blockchain networks.
Ava Labs created Avalanche and computer scientists at Cornell University, one of whom, former professor Emin Gün Sirer, is a veteran in cryptographic research.
The Avalanche network differs from the Ethereum blockchain – its three individual blockchains validate transactions independently. Again, this makes the Avalanche network scalable faster than the Ethereum network. The network can handle larger volumes of transactions – up to 6,500 per second.
It is also essential to know that Bloomberg reported on April 7 that the Avalanche network outclasses ether as Terra’s reserve currency for its UST stablecoin. Hence, a non-profit organization that supports Terra, Luna Foundation Guard, intended to acquire $100 million worth of Avalanche as part of their initiative.
Risks of investing in Avalanche (AVAX)
The Avalanche network was introduced through a whitepaper in 2018, and its launch began in 2020. With such a short history Avalanche does not have a track record for comparison yet.
9. Terra 2.0 (LUNA)
The Terra Classic blockchain uses stablecoins to power global payment systems. Furthermore, the CEO of TerraForm Labs, Do Kwon, proposed the Terra Luna fork to rebuild the Terra ecosystem. The existing Terra blockchain would be split into two blockchains. Following the hard fork, the old chain was renamed Terra Classic (LUNC), and the new chain is referred to as Terra (LUNA).
Before the launch of Terra 2.0, the Terra blockchain crashed and was spurred by the stablecoin’s volatility. Again, this halted the cryptocurrency’s strong year.
After the crash, the Terra ecosystem launched Terra 2.0. It rebranded the original network (Terra Classic (LUNC)) through its hard fork to stabilize the Terra ecosystem and help investors who lost money recoup some of their investment. Again, LUNC tokens are traded separately from the LUNA coins that come with Terra 2.0.
Risks of investing in Terra 2.0
The launch of Terra 2.0 spurred a lot of controversies, and many crypto experts are undecided over its long-term availability. With that in mind, several projects have already launched on the Terra blockchain network, and its native coin (LUNA) is worth watching if you have a high tolerance risk.
10. Chainlink (LINK)
Chainlink is a decentralized oracle network that enables universally connected smart contracts. Chainlink allows blockchains to securely interact with external data feeds, events, and payment methods, thus, providing critical off-chain information needed by complex smart contracts to become the dominant form of digital agreement.
Chainlink partners with Google, under which Google uses the platform to connect to its cloud services. Furthermore, the project advisors include former Alphabet Chairman Eric Schmidt, DocuSign co-founder Tom Gonser, and former LinkedIn CEO Jeff Weiner, according to Securities.io.
Chainlink Network is driven by a large open-source community of data providers, node operators, smart contract developers, researchers, and many more. In addition, the Chainlink network focuses on ensuring decentralization for all node operators and users who want to contribute to the network.
Furthermore, Chainlink is also the choice of a new inflation index from Truflation, a decentralized company created to serve as an alternative to the Consumer Price Index.
Risks of investing in Chainlink
Despite Chainlink’s utility and support from big industries, Chainlink is highly volatile like other cryptocurrencies in the crypto market. Its price dropped from $20 on January 1 to $6.56 by September 1. The platform also has new competition from NEST, an Ethereum-based token.
11. Decentraland (MANA)
Decentraland is also one of the best long-term crypto investments. However, Decentraland offers a virtual world that enables users to create their digital avatars. These avatars are virtual versions of individuals. They are customized and represented via unique NFTs. Users can also explore the Decentraland virtual world – they can be able to buy virtual lands. To explore the possibilities of Decentraland, users need to connect their wallet to Decentraland and pay for their purchase with MANA tokens (the official token for Decentraland). Up till now, many plots of land have been purchased for significant sums. In addition, these plots of land can be used to build virtual projects such as hotels, casinos, and apartments.
Many crypto enthusiasts see virtual real estate in the Decentraland world as the next big thing and possibly an excellent long-term investment. It is projected that as the metaverse and Decentraland become more mainstream, the value of virtual lands will increase.
Risks of Investing Decentraland (MANA)
Decentraland faces stiff competition from The Sandbox and Axie Infinity. The Sandbox (SAND) is somewhat like Decentraland because it’s a virtual reality world built by users. Axie Infinity, on the other hand, is a blockchain-based trading and battling game inspired by games like Pokemon and Tamagotchi. Users can collect, raise, and battle creatures within the platform.
Besides facing stiff competition, Decentraland is extremely volatile like most altcoins. Its profit potential is immense, but so is its possible downside. Decentraland (MANA) is a good investment if you have a high-risk tolerance.
12. Ripple (XRP)
Ripple is one of the most innovative projects in the blockchain industry. The project serves as a payment solution, and we believe the company can serve as a long-term investment. Ripple has created an innovative payment network that allows big banks and financial institutions to make cross-border transactions.
Even though there are lots of services that offer cross-border payments or transactions, Ripple is much faster and cheaper. For example, if a European bank wishes to transfer funds to an institution in Asia, this will typically go through a third-party service like SWIFT. However, the SWIFT network- which has dominated the interbank sector for several years – is expensive and slow. On the other hand, Ripple enables banks to transact with a minimal fee, and the transfer size does not matter.
Furthermore, transactions on the Ripple network take a few seconds before they are validated. Ripple can handle up to 1,500 transactions per second; not only that, but the network also ensures that cross-border transactions have sufficient levels of liquidity.
Risks of investing in Ripple (XRP)
Ripple has attracted lots of controversies because a private company runs it, and because of the SEC lawsuit, it is under scrutiny. Furthermore, Ripple’s consensus protocol is arguably less secure than other methods of processing cryptocurrency transactions.
Furthermore, many Ripple banking partners only use RippleNet (a decentralized global network of banks and payment providers using Ripple’s distributed financial technology) and not XRP cryptocurrency.
13. Solana (SOL)
Solana is regarded as the fastest-growing blockchain network. The network has been around for two years and within this period. Its user base has increased, and developer activity has also skyrocketed. SOL token price surged by more than 13000X. Its market cap peaked above $78 Billion. Again, the network hasn’t shown signs of slowing down anytime soon, and it aims at overthrowing Ethereum as the most valuable and preferred smart contract platform.
Furthermore, Solana also aims to prove its blockchain’s sustainability, which is one of the reasons we added it as one of the best long-term crypto investments. The platform has created lots of projects and developments to expand its ecosystem. So far, Solana has onboarded virtually all the emerging and fast-growing cryptocurrency projects.
Again, Solana also hosts lots of metaverse projects, DeFi protocols, and Dapps. The platform also allows developers to create and launch Web3 applications and programs and hosts different decentralized exchanges.
We expect Solana to continue attracting lots of investors to its blockchain. Again this will help expand its network and push its price past $1000 by 2025.
Risks of investing in Solana (SOL)
Solana has a shorter track record than Ethereum, and investors are still undecided on the network’s stability. In September, Solana’s reputation hit when the Solana Foundation tweeted that the Solana blockchain was experiencing “intermittent instability.” The company blamed “resource exhaustion” for the problems.
14. DeFi Coin
The DeFi Coin is also among the best cryptocurrency investment in the long term. It is also worth noting that DeFi is an alternative to standard financial services. Furthermore, this blockchain is a type of financial product governed by smart contracts. Peer-to-peer transactions are the bedrock behind the DeFi ecosystem.
The DeFi Coin has an exchange known as DeFi Swap. This decentralized exchange includes the ability to earn interest on idle crypto tokens via staking and yield farming. DeFi Swap allows P2P transactions, and this feature attracts more crypto enthusiasts to its network.
Additionally, the solid optimistic approach to the token makes it reliable long-term crypto to buy. Investors and analysts expect the token to hit the $1 mark soon. DeFi also has a burning program that reduces the supply effectively, which helps to manipulate the price upwards due to decreased supply.
Crypto investors can purchase this token on PancakeSwap for just $1. You can buy this token on DeFi Swap.
Risks of investing in DeFi Coin
The DeFi Coin protocol runs on the internet with little oversight, and millions or billions of dollars often flow through them. Like all blockchain protocols, DeFi protocols have two main security risks: coding errors, “bugs” that may cause the software to malfunction, and security vulnerabilities that allow thieves, “hackers,” to break in and steal funds from the protocol.
The DeFi coin also faces regulatory risks as they operate with almost no government oversight or regulation from any government entity. With that in mind, situations may change, and it is impossible to predict how any new government regulations of DeFi protocols might affect your investment.
15. Yearn.Finance (YFI)
Yearn.Finance is a decentralized lending service with huge potential. This service is expected to play a significant role in the future of finance. Yearn.Finance allows users to take out loans without needing a centralized operator such as a bank. In addition, loans in Yearn.Finance are approved as soon as the lender deposits a security deposit, meaning there is no need for credit checks. Furthermore, Yearn.Finance is also considered one of the best utility tokens in the crypto industry.
When it comes to financing, crypto loan agreements are funded by investors. Anyone can invest through loans just by depositing funds into the Yearn.Finance platform. However, an interest rate is paid once you have deposited the funds on the platform.
Yearn.Finance also uses various custom-built tools to act as an aggregator for DeFi protocols such as Curve, Compound, and AAVE. The platform also has built-in mechanics to shop interest rates, thus, bringing those who stake cryptocurrency the highest possible yield.
Yearn. Finance’s native token is YFI, which is an attractive investment if you believe in the DeFi sector. Again, YFI allows investors to grow and engage investors interested in earning a passive income on their cryptocurrency holdings.
Risks of investing in Yearn.Finance
Yearn.Finance faces stiff competition from decentralized lending platforms such as Aave, dYdX, Compound, Maker, InstaDApp, Dharma Protocol, bZx, KittieFight, and Mainframe. Besides these, there are also yield farming applications and protocols such as Tron Network and Binance smart chain.
Again, unlike other Decentralized finance coins with more tokens left to mine, YFI has a circulating supply of 36,638, which is the same as the total and maximum supply. Also, this means there isn’t an element of scarcity to look forward to. In addition, the laws of demand and supply can’t take hold of the crypto asset.
How to decide whether to HODL a cryptocurrency
Now that you know sustainable cryptocurrencies abound, how do you tell if a cryptocurrency is worth HODLing on to?
You need to know that there are many factors you need to consider before deciding if a cryptocurrency is worth investing in today. Without further ado, here are the most critical factors you need to consider before investing in a cryptocurrency in the long term.
1. Sustainable blockchain project
Before investing in a crypto project, you must peruse its whitepaper. The whitepaper should give you a clue on whether it solves a real-world problem or not and the urgency of the need for the solution it proposed. Again, read through the reviews and critical opinions – and only invest in cryptocurrencies that solve real-world problems.
2. Distinctiveness or competitiveness
Another factor you need to consider is how unique the crypto project is. Today, it is difficult to see a blockchain network that doesn’t have competitors. Check if the crypto project has core/unique features that give them an advantage over its peers.
3. Resilience
Also, check the crypto project’s past price action, especially its performance during a major price crash. Also, look at how deep it crashed to Bitcoin or the general market. Furthermore, confirm if it was able to rebound better when the market recovered. Again, avoid crypto projects that dip way below the market level and take forever to rebound.
4. Prior all-time high
Check the altcoin‘s previous all-time high. Again, this correlates to its resilience. Looking at Bitcoin, for instance, the cryptocurrency sets a new all-time high with virtually every crypto rally.
How to buy a long-term crypto investment
You can buy long-term cryptocurrencies on different trading platforms such as eToro and Binance. These platforms have simplified how investors can buy good crypto assets such as Lucky Block and the ones we stated in this guide. Here is how to buy a long-term crypto-asset using eToro.
Step 1: Open an account on eToro
The first step is to open an account on eToro. Go to the eToro website and complete the registration form by entering your personal information, such as your name, email address, country of residence, income sources, etc.
Step 2: Verify your identity
The next step is to verify your identity on eToro. You need to know that a regulated crypto-exchange such as eToro will demand your government-issued document such as a passport, I.D., or driver’s license.
Step 3: Deposit funds
Log in to your approved eToro trading account and click on the “deposit” icon on your user dashboard. A funding tab will pop up, giving you different options to pay/deposit funds to your eToro account. Choose one of the options and follow the prompts to fund your account.
Step 4: Search for the cryptocurrency
Once you have deposited money to your eToro account, go to your dashboard, click on the “Discover” button from the list of asset classes supported by eToro, and choose crypto. Use the search button to find your preferred cryptocurrency.
Step 5: Buy the long-term crypto-asset
Once that is done, click on the “Buy” option. A trading menu will appear. Use this to indicate the number of tokens that you want to buy. Click on the “Open Trade” menu to complete the transaction.
Conclusion
So that’s it. We have revealed long-term crypto investments and revealed the risks involved in cryptocurrencies. If you aim to invest in the long-term, you should be able to accommodate the risks involved. But only invest in projects that have a sustainable project behind them.
Don’t be discouraged by fluctuations in the market. Your investment may lose money one day and make a profit the next. Instead of getting caught up in these changes, look at the big picture.
Again, if you are strictly looking to invest without transacting on the network, always know that cryptocurrencies aren’t a get-rich-quick scheme. Instead, you should consider it a long-term investment.
Source: https://www.cryptopolitan.com/best-long-term-crypto-investments/