How to Build a Long Term Cryptocurrency Portfolio

Long term crypto investment might be a good strategy for increasing the initial capital. There are over 5,000 crypto assets on the market that can potentially make you rich. Every experienced investor knows the investment essentials: portfolio diversification, long and short-term instruments, constant market research, etc. But how can a crypto novice build a long term cryptocurrency portfolio? 

Changelly has gathered the basics of building a crypto portfolio. We are going to provide a list of the best coins and altcoins for long term investment. Here we go!

Long-Term Investment: Pros & Cons

Long-term investments mean that you are going to acquire assets with an intent to sell them later (for example, in a year). A special term was invented in 2013 that refers to holding crypto assets regardless of the market situation: hodling. It might be synonymous with long-term investment. The most significant difference between these two terms is that hodling is a belief that a particular cryptocurrency will reach the moon. In contrast, long-term investment is a strategy with many reliable facts behind it. 

Long term investment approach works perfectly with conventional investment instruments like bonds, stocks, etc. When being involved in the crypto industry, one should remember that the crypto market has a highly volatile nature. The industry is changing very rapidly, and this implies some risks: the asset you buy today can be invalid in a year. However, the same volatility factor, along with other crypto events, may dramatically change a particular asset’s value and bring considerable profit. 

Besides, holding cryptocurrency long term is less risky than day trade (especially if these are your first steps in a crypto investment). It is essential to admit that DeFi coins for yield farming probably don’t fit into a long term crypto portfolio as they require constant trader’s involvement.  

Long term crypto investment: ProsLong term crypto investment: Cons
The crypto volatility can increase the value of your crypto investments multiple timeOn the opposite, volatility might devalue long term investments 
The project behind stored cryptocurrency may become an important player on the market. An early holding of a crypto coin can bring considerable profit (like it was with BTC)Since cryptocurrencies are digital assets, there are always a threat of wallets’ and portfolio trackers’ hacks
There is no central authority over cryptocurrencies. You are the one who can control it. Crypto assets are decentralized, which means no government can inflate or deflate them Access to a wallet that stores funds can be lost (forgotten password, hack, etc.)

Building a Long Term Cryptocurrency Portfolio

Once you’ve decided to invest in cryptocurrency and hold it for a long time, some basics points should be checked.

  1. Choose a cryptocurrency you want to invest in. Do your own research about digital assets that are suitable for long term investment. Pay attention to the coin’s reputation and don’t forget to check its social networks;
  1. Research the idea behind the project. Does it offer a brand new approach to resolve blockchain issues? Perhaps, it provides a new vision on the following blockchain development? Decide whether the project has a solid base to become an industry’s standard or, in short, – does it worth your attention?
  1. Check a cryptocurrency’s market capitalization. The market cap represents a market share of a particular digital asset. The higher is the market cap, the lower are the risks for investors;
  1. Every experienced investor knows that the key to successful investment decisions is portfolio diversification. An old and irritating proverb that claims “not to put all eggs in one basket” works perfectly for long-term crypto investments. It is wise enough to purchase several crypto assets to put them in the long run. In this way, there are more chances that some of them will increase in value, thus bringing profit. 
  1. Choose a cryptocurrency portfolio tracker. There are certain tools that are tailored to provide investors with insightful information about his/her assets. Services like Cryptocompare or Cointracker give comprehensive tools to track your long-term crypto investments. However, one can keep their funds in multi-currency digital wallets. Don’t forget to choose the one that is safe and secure.

Which Cryptocurrencies to Choose 

To build a crypto portfolio, one should analyze the market to choose promising and potentially good investment options. We’ve put cryptocurrencies into several categories that help you determine your preferences in building a long-term crypto portfolio. 

Core Cryptocurrencies 

Core cryptocurrencies are the type of crypto assets that essentially are the pillars of the industry. Obviously, the first and the leading cryptocurrency (in terms of market cap and influence) is Bitcoin (BTC). Having BTC in a cryptocurrency portfolio is a rational and smart decision. 

The second place belongs to Ethereum (ETH) by right. Most decentralized applications (dApps), decentralized exchanges (DEXs), and rapidly evolving DeFi applications are built upon the Ethereum blockchain. This fact maintains ETH value making it an indispensable instrument for running a long term crypto portfolio. 

Anonymous Cryptocurrencies 

As long as the crypto industry promises to secure your identity and provides every user with transaction privacy, anonymous cryptocurrencies will be in great demand. The world of blockchain and cryptocurrencies is moving towards mass adoption. It is crucial to be prepared for the day when anonymous digital assets will be a vital part of our daily routine.  

The most well-known cryptocurrencies that ensure your privacy are Monero (XMR) and Zcash. Both of them allow for untraceable and highly encrypted transactions.

Protocol Cryptocurrencies

Many ‘bright’ projects promised to make the world a better place back to the Initial Coin Offerings (ICOs) age. Most of them are currently deactivated or announced a scam exit. However, those projects that had a breakthrough technological solution behind them managed to make it in 2020. 

Decentralized oracle network Chainlink (LINK) is a hot trend in the industry at the moment. In an attempt to bridge real-world applications with smart contracts, Chainlink continues its ascending to the top of the crypto charts. 

the list of top cryptocurrencies by market cap for long term crypto investment

Polkadot has been on the market for long enough to prove its credibility. The platform offers a solution for cross-chain transfers, scalability issues, etc. Having a DOT coin in a long term crypto portfolio might be a good idea.

Cardano (ADA) is another solid project that aims to resolve core blockchain issues like lack of scalability, transaction speed, security, and transparency. With a flawless reputation, high market capitalization, and great potential for releasing truly advanced solutions, ADA coin should be a part of the crypto portfolio strategy. 

Why do long term investment strategies include buying MIOTA? This is a very attractive asset for traders. The peculiarity of the IOTA cryptocurrency is that it operates without commissions and miners. The project developers managed to launch a fully self-sustaining and infinitely scalable network where users confirm the transactions of other users. Moreover, the project is not based on blockchain: instead, it uses the unique Tangle consensus method. 

Possessing all the main features of digital currency (decentralization, cryptographic encryption methods, lack of control by the state), NEO also has strong competitive advantages thanks to which it confidently established itself in the top currencies by total market capitalization. 

Other Cryptocurrencies

There are other altcoins that are worth your attention. Coins like Tron (TRX) and EOS (EOS) might be a nice addition to the cryptocurrency portfolio. These assets were created to sustain a proper environment within the ecosystem of their native blockchains. However, there is no need to remind you that the market situation may change within hours, not to mention long periods. Having these assets in a portfolio might be in order.  

Stellar works to accelerate payments and reduce fees on cross-border transactions. XLM is widely used by companies with multi-million capitalizations and is one of the leading cheap cryptocurrencies. The company shows a clear development uptrend. 

Litecoin is a faster version of BTC. It stands firmly in the top-10 list of the leading cryptocurrencies and intends to keep its position this way. If you are interested in purchasing LTC to keep it as a long term investment, then our Litecoin price prediction might be coming in handy.  

Another giant cryptocurrency is Bitcoin Cash. This is a truly perfect example of the fact that life after hardfork does exist. BCH is currently in the top-5 cryptocurrencies by market capitalization.

Bottom Line

As the industry provides access to more than 5,000 cryptocurrencies, one can choose any digital assets he/she likes. We want to admit that all cryptocurrencies provided in this article can be seamlessly purchased with a credit card (Visa, Mastercard), bank transfer, or Apple Pay on Changelly. Invest wisely, and may the lucky side of volatility be with you. 

Disclaimer: You’ve just read one of the author’s opinions on the Changelly blog. Here is a thing: in this article, we do not recommend or insist on buying any particular cryptocurrency. Remember that the crypto market is extremely volatile so invest in crypto on your own risks.