It is only good to understand what a cryptocurrency means and know the dynamics of the crypto before deciding to invest in it. Do not invest in a cryptocurrency just because someone said all the sweet things he or she wants you to hear about how it is changing the face of technology, its rapid rise in popularity, or whatever.
Cryptocurrencies decrease or increase in price as a result of the forces of demand and supply. If there is an increase in demand more than the supply, then there will be a price increase. Always bear in mind that the value of cryptocurrency rises when demand is higher than supply.
The remaining part of this piece will show you how to invest $3000 in crypto. You will be exposed to the most intelligent ways to invest that $3000 in crypto. It does not matter whether you are new to the crypto ‘game’ or have been in the business for a long time; ensure that you read this article to the end.
Also, if you’re still on the hunt for a great crypto exchange, we’ve got 5 of the best to check out right here.
Congratulations on Saving $3000!
Applaud yourself for a job well done. Yes, you have done well for yourself by saving $3000. This also means you have saved a good amount of money to invest. Just forget about what you went through to get that money because I am sure you must have worked hard to get it. I know you are quite anxious to know what the next step should be.
It’s quite simple. Invest that money now. Go ahead and stake that $3000 in crypto, and I assure you it will be one of the best decisions you are making right there. Once you are able to follow through and implement the tested and trusted strategies, nothing can stop you from earning the best rewards from crypto.
Smartest Way to Invest $3000 in Crypto Safely – Long-term Hold
A long-term holding period or long-term hold is usually within a year. On the other hand, short-term holds are investments whose holding is less than a year. Payment of dividends into your account will also feature the holding period.
The entire return gained from an asset or different assets over a specific period of time is known as the holding period return. It is calculated based on the total returns gotten from the portfolio or asset (changes in value plus income). When making comparisons of returns between investments that are held over different time periods, then the holding period return comes in very handy in doing that.
Benefits to Long-term Holding
1. Lesser risk
When you move in and out of the market often, it only shows how unstable you can be with your investment. Cryptocurrency investment is very profitable, and only those who are patient and can commit themselves to long-term investments will be highly rewarded. The reason is not far-fetched; they are always in the market because they are never out. Long-term investors also have access to the profitable opportunity that comes at any time. When you check in and out of the market, you miss out on a lot of lucrative opportunities.
2. Lower fees
You attract transaction fees when involved in active trading, but the long-term method of crypto investment does not carry any form of trading fees. In long-term holding, your investments are left alone after purchasing, meaning you are not actively involved in trading from time to time.
3. Tool to Build Wealth
It is a pathway to building long-lasting personal wealth in the long run.
Top 3 Coins to Long-term Hold
1. Ethereum
Based on the market cap, Ethereum is the second-largest cryptocurrency in the world. It is widely known as one of the best crypto platforms for holding decentralized apps (dApps). Developers have indeed fallen in love with this platform due to its ability to host applications like smart contracts and NFTs. With the current upgrade of the platform ongoing, which is expected to result in what is known as the ‘Merge’, investors have been reassured of a tremendous increase in value.
Once the Merge is achieved, the wide gap between Ethereum and Bitcoin (the largest cryptocurrency by market cap) will be reduced significantly. This means Ethereum will begin running on a kind of technology that enables people to transact on the blockchain cheaper, faster, and better.
2. XRP
XRP has emerged as a leading real-time payment protocol, remittance network, and currency exchange being tried by over 200 financial institutions worldwide. Just by observing the slow decline in the performance of SWIFT in the crypto market, you’ll see why Ripple, with the native token name XRP, has come to stay and why you should invest in it for the long term. XRP has come to reform and remodel how global payments are made.
3. Cronos
Looking at historical trading patterns, Cronos rates high in terms of long-term evaluations. The resistance levels, token support, and price system make it a strong long-term hold investment opportunity. In allocating your assets, you should look out for a cryptocurrency that guarantees steady growth like Cronos. It’s your best bet.
Alternative to Long-term Holding – Swing Trading
Okay, we’ve been talking about the long-term hold since the start of the article, but there is also an alternative to this investment protocol. This alternative is known as Swing Trading. It is a type of strategy whereby a trader can seek to benefit from the movement of prices within a short or medium period of time.
Generally, we have two basic types of investors with different strategies of investments – the long-term investors and the day traders. As already discussed, the day traders will move in and out (while trading) of various cryptocurrencies every day, while the long-term investors buy cryptocurrencies and hold them for years. In evaluating assets, day traders depend largely on technical analysis, while long-term investors rely heavily on fundamental analysis.
There are different strategies a trader can adopt in the swing trading of cryptocurrency. They are:
(i) Buying the pullback
(ii) Catching the wave
(iii) Following the crowd.
Meanwhile, when investing using the swing trade, traders should check out:
(i) Swing lows: This happens in the case of a market dip and bounce, affording the chance to involve in a long trade
(ii) Swing highs: Here, a short trade opportunity is provided to traders in the event of a market peaking before pulling back.
Risks of Swing Trading
1. No doubt, the potential for huge returns is very high, but it is also the same with its reverse – so brace up but do not be afraid. Risks are meant to be taken, right?
2. Another risk involved in swing trading is the fact that this type of trade requires a large amount of time to come through or materialize.
3. It is far less exciting when compared with day trading, especially for those who love an entertaining method of trading. If a trader needs instant price action and relies on fast trends, swing trading may not be able to offer that because it is a more methodical and slower approach.
Top 3 Crypto Exchanges
1. Uphold
Uphold is considered to be one of the safest ways to buy cryptocurrency by many digital asset experts. Since launching in 2014, Uphold has maintained an exemplary reputation for security among its customers. The site is unique in the sheer amount of assets it offers. You can get started on Uphold here.
Pros
- Available in more than 180 different countries
- Transactions sent between Uphold users are completely free
- Huge list of cryptos available
Cons
- Fees are unclear in certain buy and sell spreads
2. Binance US
Binance US is a cryptocurrency exchange for U.S. residents that allows users to buy, sell, and trade supported cryptocurrency. Binance US also offers “staking,” or lending of several cryptocurrencies, paying users interest for lending their crypto assets. They have a wide list of cryptos available and super low trading fees. You can get started on Binance US here.
Pros
- Great looking interface on desktop & mobile
- Beginner friendly
- Low trading fees
Cons
- Fewer crypto-to-crypto currency pairs than global Binance site
3. Crypto.com
If you’re looking for an affordable, all-in-one cryptocurrency platform, Crypto.com might be right for you. The more Cronos (CRO) you’re able to stake, the more benefits you’ll get from this exchange. They also have a huge list of cryptos available. You can get started on Crypto.com here.
Pros
- Wide list of crypto available
- Low trading fees
- Staking available
Cons
- Lack of educational resources
Final Thoughts
Investing in cryptocurrency is a high-risk game and not a low one. This is because the crypto market is not stable; it fluctuates multiple times within a short period of time. However, we have come to realize from different researches, tactical analyses, and reviews that it is more likely that long-term crypto investors will accumulate more wealth than short-term ones.
Taking calculated risks cannot be overemphasized. If you need to understand what crypto and staking in crypto are all about, then you must research personally to keep yourself abreast of the latest information about it. You could even seek financial advisors who can help you understand better.
The Cryptocurrency world is very volatile, and without adequate knowledge and understanding of it, one could dive in and dive out almost immediately, albeit regrettably.
