Investors can employ a variety of different investment tactics in the unpredictable cryptocurrency market. The phrase “buy and hold” refers to the practice of buying Bitcoin and keeping it in your possession for an extended period of time.
A rising amount of research indicates that the “buy and hold only Bitcoin” approach beats altcoins over the long term. In a recent study, Messari examined the five-year performance of Bitcoin and many alternative currencies. With an average annual return of 144%, the analysis discovered that Bitcoin surpassed all of the study’s alternative currencies.
The “buy and hold only Bitcoin” strategy was also found to be less volatile than the altcoins used in the study. As a result, Bitcoin was less likely to see significant price fluctuations, which might make it a more appealing investment for long-term investors.
The “buy and hold only Bitcoin” strategy may outperform altcoins over the long term for a variety of reasons. The most well-known cryptocurrency and one with the biggest market capitalization is Bitcoin. As a result, Bitcoin has several advantages over alternative cryptocurrencies, including liquidity and security.
Second, compared to altcoins, bitcoin is a scarcer asset. While there is no cap on the creation of alternative coins, there will only ever be 21 million Bitcoins created. Due to its scarcity, Bitcoin has a longer value proposition than alternative cryptocurrencies.
Third, compared to altcoins, Bitcoin is more widely acknowledged. Businesses and institutions are starting to accept Bitcoin as payment in greater numbers. Future growth in this acceptability is probably in store, which might raise the value of bitcoin even more.
Naturally, there is no assurance that the “buy and hold only Bitcoin” approach will outperform altcoins over the long run. The price of Bitcoin could change due to a variety of variables in the unpredictable cryptocurrency market. The evidence does, however, point to this method as a viable option for long-term investors looking for a safe and lucrative investment.
Additional thoughts on the “buy and hold only Bitcoin” strategy are provided below:
- This tactic is easy to put into action and doesn’t require any active management.
- Since this method does not require investors to time the market, it is less dangerous than actively trading altcoins.
- Over the long term, this technique has a higher likelihood of generating steady returns.
However, there are certain dangers connected to this tactic as well:
- In the near future, the price of Bitcoin may drop dramatically.
- Another cryptocurrency that is more modern and creative could take the place of Bitcoin.
- It can be more challenging to trade Bitcoin if the cryptocurrency market is more strictly regulated.
Overall, for long-term investors searching for a safe and lucrative investment, the “buy and hold only Bitcoin” strategy is a good one. Before investing in Bitcoin, however, investors should be aware of the hazards.
