Is cryptocurrency a good long term investment
With their decentralised nature, cryptocurrencies are not only more secure but also more efficient.
Introduction
Cryptocurrency is a digital asset designed to work as a means of exchange for goods or services, or commonly referred to as a “medium of exchange”. In recent years, the popularity of cryptocurrency has grown exponentially, with many people investing in digital tokens in search of high returns. As a new investor to crypto, the question remains: is crypto good long-term?
While cryptocurrency has certainly gained popularity in recent years, it’s important to understand the market before investing.
The crypto market can be volatile, with prices sometimes fluctuating wildly and unpredictably. Despite this volatility, the overall trend has been upward, with the total market capitalization of cryptocurrencies growing steadily year over year.
That being said, it’s important to note that the crypto market is still in its adolescence and subject to a range of unpredictable factors, such as government regulation and competition from other digital assets. While there are certainly opportunities for high returns on investment, there are also risks that are important to be aware of before investing.
In this article, we will explore the crypto market and answer the question of whether crypto is a wise investment choice in the long term. We will also provide a brief overview of what to look for when investing in a token and how to maximize long-term growth.
Is Crypto a Good Long-Term Investment?
The world is changing and evolving at a breakneck pace. Traditional investment options are being challenged like never before. The rise of cryptocurrencies, such as Bitcoin and Ethereum, are a testament to that. These digital currencies have been gaining significant attention lately, and for a good reason.
Cryptocurrencies offer investors an alternative to traditional investments that are subject to government or bank control. With their decentralised nature, cryptocurrencies are not only more secure but also more efficient.
If you’re considering investing in cryptocurrency, it’s important to do your research and look for tokens with strong fundamentals, such as a dedicated community of users and a clear use case. You should also have a clear long-term investment strategy in place and be prepared to weather market downturns.
At the time of this article, the cryptocurrency market is valued at over $1.2 trillion as of March 2023 [1]. This indicates significant growth from the market’s value of $237.1 billion in January 2020 [2]. The report also revealed that Bitcoin has a market dominance of over 40%, with Ethereum following closely behind at around 18%. These statistics show that the crypto market has experienced tremendous growth in recent years.
Is crypto a good long term investment? We believe crypto is a good investment long term. Crypto is so new compared to the traditional stock or bond market, there is much more room for your investment to grow exponentially over time, especially with smaller amounts of capital. Some crypto tokens grow 5X, 10X, and beyond. That sort of “rocket fuel” growth doesn’t happen too often in the “regular” market, or at least not as quickly and definitely not with smaller amounts of investment capital. Not everyone has a hedge fund!
Also, with this flurry of investment and innovation, there will be many new inventions and powerhouse businesses that will change lives around the globe. Similar to the dot com boom in the 90s and 00s, once the smoke cleared from all the activity, the world was left with fibre optics, the internet, web search (Google), social media (Facebook), and mobile tech (Apple). Similar activity is happening now with crypto; positioning yourself in that next-big-wave is a good idea.
Which Tokens Should You Choose?
Here is a good rule of thumb for evaluating crypto projects. Think of this like a cheat sheet – not a complete list but definitely the high points that should be reviewed:
Founding Team
- Are they anonymous or “doxxed” – meaning their personal info is revealed as the owners and founders of the token? (Being anonymous isn’t necessarily a bad thing; there are plenty of excellent tokens that have anonymous management. Typically, it’s important to know the managers and founders in brand new tokens).
- Are they in an industry that they know well? Are they experts? Do they bring excellence to the token?
- Do they have a track record in crypto? If so, was it successful or a scam / rug pull?
- Do they communicate with their token holders? Are they available regularly with news and updates?
- How is their marketing? Engaging? Limp?
Industry
- What is the use case for the token?
- What industry are they focused on?
- How will the token make income? Fees, staking, interest payments, etc? Most of this info will be in the company’s whitepaper, usually found online.
- Do they have any high level strategic partnerships? Any Venture Capitalists / hedge funds helping them?
Tokenomics
- How will the token make YOU money? Just through appreciation? Do they pay part of their income to token holders?
- Do they have “buybacks and burns” (meaning they eliminate some supply from the outstanding token balance to increase prices)?
Security and reputation
- Is their code state of the art?
- Are they reviewed and audited?
- Do they have a history of being hacked?
Community
Most crypto tokens live and die by their community. Their current token holders are their loudest advocates or their most damning critics.
Are they happy token holders or is there strife in their community?
Well engaged communities can turn a “flimsy” token (ie Shiba Inu, Dogecoin) into an absolute monster.
In Summary
Now that you have a better understanding of the crypto market and some of the most promising emerging tokens, it’s time to take action.
If you’re interested in investing in cryptocurrency, we recommend ACTS Token, a new digital currency full of promise and opportunity. Jump in on the opportunity to be a part of the future of finance!
We can’t wait to be a part of your new crypto adventure!
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References
- tokenMarketCap. (2023). Global Cryptocurrency Market Cap Charts. Retrieved from https://www.coingecko.com/en/global-charts
- Statista. (2021). Cryptocurrency market capitalization from January 2013 to August 2021. Retrieved from https://www.statista.com/statistics/863917/worldwide-cryptocurrency-market-capitalization/
- CoinGecko. (2021). Cryptocurrency
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