For others, especially traders, the extraordinary volatility of the cryptocurrency market offers enormous potential since it may occasionally lead to substantial price movements that result in large rewards for both long and short positions.
However, if their hard-earned investment experiences a sudden and significant decline, it may be a major source of concern for many people.
From a long-term viewpoint, some investors choose to concentrate only on cryptocurrency ventures. This is an excellent method for minimizing short-term volatility and maximizing the earning potential of high-quality cryptocurrencies.
Nevertheless, not every project is designed to flourish over the long term, and some qualities, including original ideas, committed teams, and practical timetables, are necessary for success.
This article seeks to offer a list of the finest purchases for buyers who want to disregard price movement and volatility in the short term in favor of the best long-term crypto. If this sounds attractive, continue reading to learn more about the best long-term cryptocurrency investments for 2023.
Which Crypto to Buy Today for Long-Term Investment?
Bitcoin is often considered a great long-term investment for several reasons, like:
- Pioneering cryptocurrency: Bitcoin was the first decentralized cryptocurrency, created in 2009 by an anonymous person or group known as Satoshi Nakamoto. It introduced the concept of blockchain technology, which has revolutionized the way transactions are verified and recorded. Bitcoin’s first-mover advantage and widespread adoption have contributed to its prominence and recognition as a store of value.
- Limited supply: Bitcoin has a finite supply cap of 21 million coins. This scarcity makes it similar to precious metals like gold, which can contribute to its appreciation over time. As more people become interested in Bitcoin, the limited supply may increase demand and potentially drive up the price.
- Decentralization and security: Bitcoin operates on a decentralized network known as the blockchain, which means that no central authority controls or governs it. Transactions are verified by network participants (miners) and recorded on the blockchain, making it highly secure and resistant to censorship or tampering. This decentralized nature adds to Bitcoin’s value proposition and long-term viability.
Global acceptance: Bitcoin is now widely used as a store of wealth and a method of payment.
Major companies, including Tesla, Square, and PayPal, have started accepting Bitcoin as a means of payment. Additionally, countries like El Salvador have adopted Bitcoin as legal tender. The increasing acceptance and integration of Bitcoin into various industries and financial systems contribute to its long-term investment potential.
- Store of value and inflation hedge: Bitcoin is often seen as a hedge against traditional financial systems and potential inflation. With its limited supply and decentralized nature, it is considered a store of value similar to gold. Some investors view Bitcoin as a way to protect their wealth from the devaluation of fiat currencies caused by inflationary monetary policies or geopolitical uncertainties.
Cardano is a blockchain platform that aims to provide a more secure and scalable infrastructure for the development of decentralized applications (DApps) and smart contracts. It was founded by Charles Hoskinson, one of the co-founders of Ethereum, and has gained significant attention and popularity in the cryptocurrency community.
There are several reasons why some people consider Cardano to be a potentially good long-term investment:
- Strong technological foundation: Cardano is built on a unique, research-driven approach that emphasizes peer-reviewed academic research and formal verification methods. This approach aims to ensure a secure and robust platform that can support complex applications and smart contracts.
- Scalability and sustainability: Cardano aims to address the scalability issues faced by many blockchain platforms, such as high transaction costs and slow transaction speeds. The platform utilizes a layered architecture called “Ouroboros,” which separates the settlement layer from the computational layer, allowing for scalability and potential future upgrades.
- Emphasis on governance and regulatory compliance: Cardano has a strong focus on governance and aims to provide a decentralized and self-sustaining ecosystem. It incorporates a treasury system and a voting mechanism that allow ADA token holders to participate in decision-making processes. Additionally, Cardano aims to be compliant with regulations, which may be beneficial as the cryptocurrency industry evolves and regulatory frameworks develop.
- Growing ecosystem and partnerships: Cardano has been successful in attracting partnerships and collaborations with various organizations and governments. These partnerships can potentially lead to increased adoption of the Cardano platform and its native cryptocurrency, ADA, which may positively impact its long-term value.
- Continuous development and improvement: Cardano follows a roadmap that outlines its development stages, which are designed to introduce various features and enhancements over time. The project has a dedicated team of developers and researchers working on advancing the platform’s capabilities, security, and scalability.
Chainlink is a decentralized oracle network built on the Ethereum blockchain. It aims to bridge the gap between smart contracts and real-world data by providing reliable and tamper-proof data feeds. Here are a few reasons why some investors might consider Chainlink as a potential long-term investment:
- Decentralized Oracle network: Chainlink’s decentralized Oracle network allows smart contracts to securely interact with external data sources, APIs, and traditional banking systems. This feature is crucial for the development of decentralized applications (DApps) and helps to bring real-world data onto the blockchain, expanding the potential use cases for smart contracts.
- Market demand: As the adoption of blockchain technology grows, there is an increasing need for reliable and verified external data to trigger smart contract executions. Chainlink has established itself as a leading provider of decentralized oracles, and its technology is being utilized by various projects in sectors such as finance, insurance, gaming, and supply chain management. The market demand for Chainlink’s services could potentially drive the value of its native token, LINK.
- Partnerships and integration: Chainlink has formed numerous partnerships and integrations with prominent blockchain projects, enterprises, and data providers. These collaborations help to expand the ecosystem and increase the adoption of Chainlink’s oracle technology. A strong network of partners can contribute to the long-term viability and success of a cryptocurrency.
- Token utility: LINK is the native cryptocurrency of the Chainlink network. It is used for various purposes within the ecosystem, such as compensating node operators for providing data and services, staking in the network’s security model, and participating in governance decisions. The utility and demand for LINK tokens within the Chainlink ecosystem could potentially impact their long-term value.
Ethereum, the second-largest cryptocurrency by market capitalization, has several attributes that make it an appealing choice for long-term investment. Here are some reasons why Ethereum is often considered a great option for long-term investment in the crypto space:
- Established network and ecosystem: Ethereum has a robust and well-established blockchain network that has been operational since 2015. It has a large and active developer community, which has contributed to the creation of numerous decentralized applications (dApps) and smart contracts. The network effect and the broad ecosystem built around Ethereum contribute to its long-term viability.
- Smart contract functionality: Ethereum introduced the concept of smart contracts, which are self-executing contracts with predefined rules and conditions. This feature enables the development of of decentralized applications, enabling various real-world use cases like decentralized finance (DeFi), non-fungible tokens (NFTs), and decentralized exchanges (DEXs). The versatility and potential of smart contracts on the Ethereum network make it an attractive choice for long-term investment.
- Upcoming upgrades: Ethereum is undergoing a significant upgrade called Ethereum 2.0, which aims to address scalability and energy efficiency issues. This upgrade will introduce a transition from a proof-of-work (PoW) consensus mechanism to a proof-of-stake (PoS) mechanism, improving network security and transaction processing speeds. These upgrades are expected to enhance the overall performance of the Ethereum network, making it more appealing to long-term investors.
- Developer community and innovation: Ethereum has one of the largest and most vibrant developer communities in the cryptocurrency space. This community continually works on improving the Ethereum ecosystem, developing new applications, and exploring innovative use cases. The constant innovation and developer activity contribute to Ethereum’s long-term potential, as it is likely to remain at the forefront of blockchain technology advancements.
- Institutional adoption and recognition: Ethereum has gained significant recognition and adoption from institutional investors and major companies. This institutional interest helps validate Ethereum’s potential and increases its chances of long-term success. Furthermore, the integration of Ethereum into various financial services and platforms indicates its growing acceptance and utility, which can positively impact its value over time.
Polkadot is considered great for long-term investment in the crypto space for several reasons:
- Scalability and interoperability: Polkadot aims to solve the scalability issue faced by many blockchain networks. It achieves this by utilizing a unique sharding mechanism called “parachains.” Parachains are individual blockchains that run parallel to each other, enabling high transaction throughput and increased scalability. Additionally, Polkadot’s interoperability features allow different blockchains to communicate and share data securely, fostering a connected ecosystem of diverse blockchain networks.
- Governance and upgradability: Polkadot implements an on-chain governance model that allows token holders to participate in decision-making processes. This decentralized governance ensures that the network can adapt and upgrade itself efficiently over time, avoiding hard forks and potential network splits. This flexibility and community-driven approach make Polkadot well-positioned for long-term sustainability.
- Security and reliability: Polkadot employs a shared security model where multiple parachains can benefit from the robust security provided by the Polkadot Relay Chain. This model enhances the overall security of the network by pooling resources and reducing the attack surface. By relying on a common security infrastructure, Polkadot aims to provide a reliable and secure foundation for building decentralized applications (dApps) and blockchain projects.
- Ecosystem and development: Polkadot has garnered significant attention within the crypto community and has attracted a diverse range of projects and developers. The Polkadot ecosystem has grown rapidly, fostering innovation and the development of various decentralized applications. This expanding ecosystem indicates a vibrant and active community, which is crucial for the long-term success of any blockchain project.
- Polkadot’s native token (DOT): As the native token of the Polkadot network, DOT plays a vital role in the platform’s governance, staking, and bonding mechanisms. DOT holders can participate in the network’s decision-making processes, stake their tokens to secure the network, and bond them to support parachains. The importance of DOT in the Polkadot ecosystem, combined with the network’s promising fundamentals, can make it an attractive long-term investment option.
Benefits of long-term cryptocurrency investments
Long-term cryptocurrency investments can offer several benefits to investors. Here are some of the key advantages:
1. Potential for high returns:
Cryptocurrencies have historically exhibited significant price appreciation over the long term. Bitcoin, for example, has experienced substantial growth since its inception. By holding onto cryptocurrencies for an extended period, investors can potentially benefit from price increases and generate substantial returns.
Cryptocurrencies provide an opportunity to diversify an investment portfolio. By allocating a portion of your portfolio to digital assets, you can reduce your reliance on traditional assets like stocks and bonds. Cryptocurrencies often have a low correlation with traditional markets, meaning they can act as a hedge against market volatility and potentially enhance overall portfolio performance.
3. Technological innovation:
The underlying blockchain technology of cryptocurrencies has the potential to revolutionize various industries. Long-term investors have the opportunity to support and benefit from technological advancements. As blockchain adoption increases, cryptocurrencies with strong fundamentals and real-world use cases may gain value over time.
4. Accessibility and liquidity:
Cryptocurrencies offer a level of accessibility and liquidity that is not always present in traditional investment options. Digital assets can be bought and sold 24/7 through various online platforms, providing investors with greater flexibility. Additionally, cryptocurrencies can be easily divided into smaller units, enabling investors to participate in the market with even small amounts of capital.
5. Potential for passive income:
Some cryptocurrencies, such as proof-of-stake coins, offer the opportunity to earn passive income through staking or lending. By holding these cryptocurrencies long-term, investors can participate in network consensus and receive rewards for securing the blockchain network. This passive income stream can provide additional returns on investment over time.
6. Early adoption advantage:
Investing in cryptocurrencies early on can offer an advantage as the market matures. By identifying promising projects and technologies in their early stages, long-term investors have the potential to benefit from significant growth as adoption increases and mainstream acceptance grows.
7. Hedge against inflation:
Cryptocurrencies, particularly those with a limited supply, can serve as a hedge against inflation. Traditional fiat currencies can lose value over time due to factors such as excessive money printing or economic instability. Cryptocurrencies like Bitcoin, with their capped supply, are designed to be resistant to inflationary pressures.
It’s important to note that investing in cryptocurrencies carries risks, including price volatility and regulatory uncertainty. It’s advisable to conduct thorough research, diversify your investments, and seek professional advice before making any investment decisions.
The best long-term cryptocurrencies to add to your investment portfolio: How to make the right decision
Choosing the best long-term cryptocurrencies for your investment portfolio requires careful consideration and research. While here we have provided you with some general guidelines, please note that investing in cryptocurrencies involves risks, and it’s important to conduct your due diligence and seek professional advice if needed. Here are some steps to help you choose the best long-term cryptocurrencies:
- Research: Start by researching different cryptocurrencies and their underlying technology. Understand their use cases, the potential for adoption, and any unique features they offer. Read whitepapers, explore their communities, and follow reputable cryptocurrency news sources to stay informed.
- Market capitalization: Consider the market capitalization of a cryptocurrency, which is calculated by multiplying the total supply of coins by their current market price. Generally, cryptocurrencies with higher market capitalization tend to be more established and have greater liquidity.
- Team and development: Assess the development team behind the cryptocurrency. Look for experienced developers, active community engagement, and a history of delivering on their roadmap. Review the team’s credentials, previous projects, and vision for the future.
- Adoption and use cases: Evaluate the level of adoption and real-world use cases for a cryptocurrency. Consider whether it solves a genuine problem or provides unique utility within a specific industry. Cryptocurrencies with tangible partnerships and applications are more likely to have long-term potential.
- Technology and scalability: Examine the underlying technology of the cryptocurrency. Scalability is a critical factor, as it determines whether the network can handle increased usage and transaction volumes. Look for cryptocurrencies that employ robust consensus mechanisms and have plans for scalability solutions.
- Community and governance: Evaluate the size and engagement of the cryptocurrency community. A strong and active community can help drive adoption and provide ongoing support. Additionally, assess the governance model of the cryptocurrency to understand how decisions are made and whether there is a mechanism for community involvement.
- Security and auditing: Consider the security measures implemented by the cryptocurrency. Look for projects that have undergone third-party security audits or have a transparent and well-tested codebase. Security is crucial to protect your investment and the integrity of the network.
- Market sentiment and price history: Assess market sentiment and price history to gain insights into the cryptocurrency’s performance and potential volatility. However, remember that past performance is not indicative of future results, and market sentiment can be influenced by various factors.
- Diversification: It’s important to diversify your cryptocurrency portfolio to spread out the risk. Consider investing in cryptocurrencies with different use cases, market capitalizations, and levels of maturity. Diversification can help mitigate the impact of volatility and potential downturns in specific cryptocurrencies.
- Professional advice: If you’re new to cryptocurrency investing or unsure about specific projects, consider seeking advice from professionals with expertise in the field. Financial advisors, cryptocurrency analysts, and experienced investors can provide valuable insights and help you make informed decisions.
Remember, investing in cryptocurrencies involves risks, including the potential for capital loss. It’s important to stay updated on market trends, be prepared for volatility, and only invest what you can afford to lose.
More on what crypto to buy
An effective method for investors who are concerned about short-term market action and volatility is the argument for digital currencies as a long-term investment option. Even though it is typically associated with the speculating and market timing employed with short-term methods, this is true.
Disclaimer: This material has been prepared for informational purposes only, and is not intended to provide, tax, legal, or financial advice. You should consult your tax, legal, and accounting advisors before engaging in any transaction.