Buy and hold had been one of the main strategies people had back in 2017 but as we already know, that was a booming year for cryptocurrencies. Following the bear market of 2018, risk sentiment had been deteriorating and despite an impressive recovery, the fear of a new major selloff persists. Even this year we’ve had a brief bear market in March when most tokens got liquidated. With that in mind, we would like to answer the question of whether it’s worth investing in crypto long term.
# Crypto valuations on the rise
People that looked after crypto opportunities during the second half of this year could have banked important returns, considering the market had continued to recover, despite many worries and downside risks. COVID-19, an economic downturn, financial stress, and the speculative nature of crypto are still the main reasons why critics continue to be skeptical when it comes to the long-term growth of the market.
However, same as with any other major selloff in the past, cryptocurrencies are proving to be resilient once again, especially now when the investing community is looking for cash alternatives.
# Security threats still exist
In our last article, we’ve talked about the Alien Trojan and it was another security-related material in which we’ve wanted to make our audience fully aware that when dealing with crypto, safety measures should be ensured. For those that want to buy and hold, this becomes one of the main requirements.
As a result, it’s not outdated to use a hardware wallet, make sure that your devices are up-to-date with the latest software updates, and at the same time, keep private keys away from any third-party. Security vulnerabilities will continue to cast a shadow of doubt over crypto, but with the right measures, you can deal with them.
# A new crypto cycle?
The Bitcoin halving is generally regarded as the reference point for a new 4-years cryptocurrency market cycle. If that would be the case, we should expect to see a new major bull market during the span of the next 3 years, or even sooner.
We are confident that cryptocurrencies can continue their ascendency, but the pace of that occurrence will be highly-dependant on various fundamentals or high-frequency data. Timing is still the key to grab attractive valuations while also reducing the downside when markets are in a corrective mood. As with any other investment, we must face the fact that valuations can’t trend higher in a straight line all the time.