Image credit:independent.co.uk.
With the recent market dynamics in crypto, one will doubt whether it is really sensible to hold a coin especially for a long time. Holding of a coin with the hope that it will boom in a couple of days, months or even a year. Is it really worth it holding a coin for that long these days? Some people still believe that it is still good to hold for a long time. That a patient dog eats a fattest bone. But I don’t subscribe to the idea of holding a coin for too long to become a “millionaire”.
The following are reasons why I don’t buy into this belief of holding:
Firstly, you will be holding a coin for example a coin with a price below $1 with the hope it will appreciate to $1 or $2 while a trader will take a profit once the coin makes a considerable increase in price even if it is 2 cents increase.
You will still be waiting till the coin reaches your so called price target of $2 or $5. Meanwhile, the trader has taken a profit of more than $5 from the same coin you are holding.
Tell me now. Who is gaining more ? You or the trader?
You can now see why I don’t subscribe to the idea of holding a coin for that long. I also advocate that if you are in crypto you should have the idea of trading even if you don’t trade futures. Have the knowledge of trading. This will help you to take profits. When you take profits and compound it, it will increase.
Imagine taking a profit of $2 every week on a coin for a month that is $8. Do it for another month, you will have $16. You can see that if done for a long time , you will have more dollar to invest in another portfolio than holding a coin till that magic boom in price (which in some cases doesn’t happen).
Another reason why I don’t follow this belief of holding is that sometimes small and medium investors like us that invest in a coin and now wait for the coin to boom or appreciate. And if it eventually appreciate, will it make you a millionaire? Answer this question honestly. You will understand why am not a fan of holding a coin for too long.
In addition, there are some coins in my portfolio, that have not appreciated again in value since their first increase in value. Instead they have been stagnant at a price range and some have depreciated below the price that I bought it. Imagine that scenario where a coin has not appreciated in value for more than a year.
Furthermore,some projects/blockchains that you are holding their coins can have a major security hack, court issues or even rugpulled. This can affect the price of the coin for a long time. But as a trader that takes profit, you will trade it once you see any small increase and compound it or even sell it off and buy another coin.
Convince me otherwise from the above reasons why I should be a believer that holders are going to be millionaires. It is better I take my profits each time my coin appreciate reasonably than waiting for that value that will make you a millionaire and compound it steadily and slowly.