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Holding crypto as long term investment

  • 02-10-2020 10:33pm
    Registered Users Posts: 279 ✭✭ Mucashinto

    Maybe a bit of a too open-ended question, but just wondering if people think it's reasonable to hold a small general bag of crypto and let it sit and expect that it will/could go up in the by and large?

    Just asking as the changes in value are still a little jarring to me. Bought some link @6, hit 15, now 8 or whatever and I'm wondering if I had to cash out that profit. Like that's how the whole thing works. Not expecting people to make decisions for me or whatever, just wondering if maybe people think the crypto market is not really for my current kind of investment. Too volatile/immature/unknown or whatever.

    I don't actually check the prices as much anymore (tbh I'd hazard a guess I'm almost bang on even in total P&L after about 5 months of doing nothing much, but Sep 1 was when I peaked), but wondering if there's a view that maybe the idea of storing money in crypto for the medium/long term is maybe not appropriate? It's more about trading etc.

    Really hard to know for me, total newb really. So many points working in its favour that seem plainly valuable, but then I looked at the top gainers on Coinbase a while ago and I had to scroll past the first 100 to see a coin I recognised so maybe if I don't know what I'm doing, gtfo or be prepared to lose everything.

    EDIT: Sorry, could it maybe be it's about the 1 big winner covering 99 losses as well. So you really need to invest in that way also?



  • Registered Users Posts: 11,195 ✭✭✭✭ Lex Luthor

    really depends on what you want out of it
    trade, short, med or long term hold
    different strokes for different folks

  • Registered Users Posts: 82 ✭✭ Straight Flush

    Just my 2 cents but I really like BTC as a long-term investment, kept in a safe place (i.e. an offline wallet). On the other hand I only fancy altcoins for very short-term holds.

  • Registered Users Posts: 691 ✭✭✭ jmlad2020

    Yes coins like Link can make insane gains, and it is your choice and risk to cash out. No one can predict the market so if you want to buy low sell high then buy back in go for it. I've done this with success but also some failures. If you are a noob I wouldn't recommend it til you understand this highly volatile market. Majority of ALTS are going to 0 in my opinion, bar a few such as Ethereum, Ada etc.. do your research for long term holds.

    As for holding BTC longterm, many view this is a sensible and smart investment. best way is to not check the price eveyday and instead see it as a 3-5 year initial investment and weigh it up then, which is my plan for holding BTC longterm. If Bitcoin goes to zero tomorrow my finances would not be majorly impacted and I won't be crying about it. Don't invest your life savings in it but have a nice long term bag.

  • Registered Users Posts: 4,655 ✭✭✭ makeorbrake

    If you have an investment/savings portfolio, then crypto would be the high risk portion. Many say don't put more than 5% of your overall funds in crypto - others max at 10%. I've done quite a bit more than that but I'm aware of the risk (and not that it matters, it's all $ that has been generated through crypto in any event).

    If you diversify in that way - and then work on the basis that you lose 100%, naturally that's not the best of outcomes but you're not going to destroy yourself. On the flipside, it's a case of asymmetric risk so it's high risk but the upside potential is pretty big.

    Then on the long/short game - that's really down to you, your interests, your risk appetite, etc. Personally, I've simply never been able to get my head round trading on a short time basis. I'd love to - but I simply have not been able to get comfy with it. I tend to take a position and hold - and to be quite honest, I'd sooner prefer to hold it long term. However, I try to heed a couple of things;

    - Market sentiment: If you follow this market closely it's possible to determine if we're heading into irrational territory OR conversely if the doom and gloom doesn't match whats actually happening in the space. You need to have your head in it - to appreciate this.

    - Long term thesis: I'm not a fan of buying into anything that I simply have no fundamental belief in. There are a couple on here who actively ridicule crypto but buy in as they think (and maybe they are) they're in front of it - in before the stupid money and out before the stupid money. I mean, if you can gauge that - that's fair enough. I can see a logic to it. My view though would be that it's very possible that you get left holding the bag - and in that instance, I can live with holding a bag of something that has something tangible going for it. In fact, I've been under water several times and I held through to see it flip upwards.
    If you're going to prepare for this scenario - everyone has a plan until they get punched in the face! It feels a lot different when you're sitting there nursing a significant loss - with market doom and gloom and the suggestion that you're going to face further losses. We all have a plan on paper but real life is quite different. What I've learned from this is not be be greedy and to leave room with position size. Don't oversize it or that psychology will go against you when/if the market takes a drop.
    I've also failed to dollar cost average in/out - even though I know it's the right thing to do. I've gotten away with it/benefited from it - a couple of times - but that's been pure luck. On one trade, I've paid the price for it - albeit that trade will remain open probably for a few years - I still think it will fix itself over the longer term.

    - Figuring out the price: I mention it, I always think about it - but I've never really gotten to grips with this. I've also got caught with this - in that on taking one position, I researched the shít out of it - and was happy that the project was tangible. I questioned the price - but couldn't figure how the hell to price the bloody thing.
    Tokenomics is an entirely different beast to pricing an equity share. The latter has a neat little formula. I remain interested in this but I've never figured it out. There are indicators - but for me they're indicators of direction - they can't clearly define the price per se. For example the number of actively used btc wallets, stuff like that.

    I'm sure you know this already - but trading btc is risky - but when you get into alt coins, then your level of risk multiplies. In that case, there's probably a need to have a few smaller pots - as you're unlikely to figure out the winners in every case. The losers will be 100% losers.

  • Registered Users Posts: 279 ✭✭ Mucashinto

    Thanks to all for replies. I am actually adhering to most of this advice already in fairness, just very 3 weeks or so I get the usual anxiety that I’m just letting it all drift aimlessly and should do something.

    I bought only BTC originally and told myself only BTC. Then ETH started getting stronger and I thought ah that’s established enough, so a small bit of that. Then in the other thread someone (Lex?) made me curious about LINK so bought some as a risk. That went well so when someone said the same about ZCASH went in on that. Then DOT came out and I thought that looks like it could be a big player. An on and on...:pac:

    I’m still 75% BTC/ETH but was telling myself a limit of 85% BTC minimum at the start.

    Funny thing is, I can see a use case for almost every coin! Surely this can’t be so I get a bit worried I’m not considering enough factors. I bought some BAT as that makes a lot of sense to me. There’s obviously huge money/industry in online content/creators etc but they’re all at the mercy of giant corps who could end their whole business at the click of a ban button. Surely something like this could remove all that and place control back in the creators/subscribers without needless middle men. But I don’t go and read the white paper or anything and wouldn’t be able to evaluate it anyway so it’s back to a general hunch.

    I guess that’s why I feel just BTC may be simplest and best for me. Like I can see crypto/decentralisation/blockchain is coming in some form and BTC seems like a fairly general way to track that. But I can see why you’d go down a rabbit hole of alt coins as well :D, all very interesting stuff.

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