Experts have estimated the potential of long-term investments in cryptocurrencies and made recommendations on purchasing and custody of the assets.
In the last five years BTC has grown 7500% in price. Investing $100 in BTC in 2016 nowadays would have led to over $75,000 profits. Moreover, in April 2021, when BTC price reached its all-time maximum of $64,000, the profits could have run at $105,000. In this article we will try to explain how investment in cryptocurrency can become a good alternative to retirement savings.
As Nikita Soshnikov, the director of Alfacash crypto exchange, states, nowadays BTC is one of the most promising assets for long-term investments. Investors are attracted by BTC’s limited emission compared to quantitative easing on fiat. Besides that, the attractiveness of BTC is boosted by rapid digitalization of payment systems and support from large market players such as Tesla.
This view is shared by experts from Currency.com crypto exchange. They believe BTC is quite a new asset with great prospects which can significantly grow in price due to increasing demand and deflationary model.
How to invest in bitcoin
The most profitable way to purchase bitcoin seems to be during the crypto winter. Crypto winter comes after BTC realizes its full growth potential amid its halving. During such periods the price of the asset decreases to the minimum level. The last crypto winter took place in 2018: back then the price of the coin dropped to $3,000 after it had grown to $20,000 in the end of 2017.
For those who do not dispose large investing capital it is possible to purchase coins every month for small amounts of fiat. Thus, saving $10–100 every month to buy bitcoin, one can accumulate significant capital in 10–15 years.
However, if there is a huge sum one can invest in BTC, it makes sense to purchase coins during the correction.
When it comes to storing your newly purchased assets, there are different types of wallets one can use. Those who endeavor stock speculation, may want to use hot wallets — the ones that have permanent connection to the Internet. This type of wallet comes in handy when you trade frequently.
However, those who aim at long-term investments might want a cold wallet. Their advantage is higher security against hacker attacks and asset theft as these wallets store coins without Internet connection.
Besides that, experts make certain recommendation on how to store your BTC safely:
· You should connect your cold wallet to the Internet as rarely as possible — only to update the blockchain
· Divide your seed phrase that is used for getting access to the wallet into several parts
· Store your seed phrase in several places (and it is always good to have a printed version of it)
· Do not comment on having cryptocurrency, on its amount or means of custody