Cryptocurrency is virtual money that is decentralised, which means it is not managed or controlled by any central agencies. It is based on blockchain technology, and Bitcoin is considered the best cryptocurrency to invest in as it is the firstborn and most popular choice. While you can use Bitcoin to make purchases, knowing what you are getting into before investing is essential. Coming to the question of whether it is a short or long-term investment, most people consider it as a long-term one. Read below to know more.
What is a Long-term Investment in Bitcoin?
Long-term investing means you hold on to a certain asset for a period longer than a year. Usually, long-term investors are passive investors, which means you are not trading actively. You do not buy or sell within a short period and choose to invest in products that have value in the long run. Overall, this is a type of investment where you buy and forget.
What is a Short-term Investment in Bitcoin?
It is a type of investing where the asset is held for less than a year. It is an investment option for active traders and investors as there is a lot of buying and selling. The trading by short-term investors can be typically done several times a week or many times a day. Investors who look for short-term investments try to make a quick buck and do not plan on holding the assets and are trying out the market. Since there are many risks involved in this option, most short-term investors have portfolios with long-term assets to balance out their goals.
Benefits of Investing in Bitcoin for a Short Term
- There is greater flexibility for investors as they get money in hand when needed.
- An investor can make great profits in a lesser span of time and meet the financial requirements.
- The losses can be minimised as traders operate with stop loss and money invested will be substantially lower.
Benefits of Investing in Bitcoin for Long Term
Here is what you can expect from investing in Bitcoin for the long term.
- It creates a path for financial independence while helping beat inflation over time.
- Bitcoin is seeing great traction as there is wider adoption by investors and big companies, so there will be an increase in its value. Thus the market has seen a great opportunity in BTC to INR conversions in recent years
- As more real-time applications are built, the demand and value will increase, so it is a store of value in the long run.
- Long term Bitcoin investment gives you more control over your portfolio, better access to investment, and lower fees.
- Invest in a small way so that you can build your personal wealth over a period of time and make use of it for your future goals.
Is Bitcoin legal in India? Buying and selling Bitcoins on platforms like Coinswitch is not banned. The profit expectations are based on the prediction that the prices will increase and there will be no harsh regulations. But, Bitcoin is volatile and needs to be held for a period of time. Typically, investors who look for long-term profits have it for several years. So if you are optimistic about blockchain-based technology, investing in Bitcoin for the long term is a good option. However, bear in mind numerous risks like scams and hacking. So before venturing into this space, understand the risks involved.