#HOLD , WHAT IS HOLDEAR?
It refers to the practice of buying cryptocurrencies and holding them for the long term with the idea of selling them when they have a higher price and thus obtaining profits or capital gains.
This investment strategy is not the simplest, lowest risk and most passive, but it does not mean that it is not profitable.
The first question would be why invest in the long term? Electronic currencies generally increase over time, a clear example is Bitcoin, it increases significantly in each halving, every four years, so the strategy of holding your coins should think that the same amount of time has to pass, given that there is a direct correlation between the increase in Bitcoin and Altcoins $BTTC .
Once you are fully involved in an informed manner with knowledge of how to trade and hours of experience, you will be free to consider other higher risk investment strategies or combine them with this one.
The main objective of holding is to obtain profits or capital gains, we buy cheap and sell expensive, however, the price of your currency may drop and we could have losses "if you sell them" the idea is to hold them until the price goes up again.
WAYS TO HOLDING
There are various ways to hold, the simplest is to make a large initial investment and let time pass until we decide to sell, called buy-and-hold.
Although it is an excellent strategy from a financial perspective, it can be more interesting if it starts with systematic increases so that the capital increases progressively. There are two ways to do this:
By averaging purchases, Dollar Cost Averaging (DVS), what you have to do is buy recurring purchases periodically, a similar amount each time, regardless of the asset price or the market phase, the idea is to significantly increase our assets. In this way, at the end of the period we have defined, we can average the global price.
Buying the dip is similar to the previous one, the difference is that every time the value of the currency drops by a percentage, you buy. For example, if the currency is worth 100 and it has dropped by 10 to 15%, you buy or invest in this currency, hoping for its recovery and of course a profit for the investor.
These two strategies are very noble, but if you are starting out in the crypto world, you must be very cautious to know how much the value of your chosen currency can fall and not buy in advance due to their high volatility.
DISADVANTAGES OF AVERAGE PURCHASES
The possibility of buying at large discounts is reduced, because when the market is bullish we will have less profit than if we had bought it all at once.
If we have a substantial amount of capital to invest, it will take us some time to have it in our portfolio, in one fell swoop.
COROLLARY
Although there are some theoretical disadvantages, Holding is about accumulating, it doesn't matter if it is the first or second strategy, the important thing is to accumulate and save, so you can make a combination of both until you are satisfied with having the number of cryptocurrencies you want.
The truth is that human beings are insatiable, always seeking to have more and more until infinity.
Beginners, start with the basics and mature your knowledge to become profitable traders.
Nice afternoon, enjoy ♥️.
