Is Crypto a Buy and Hold Asset?
Bitcoin made headlines recently with the debut of a futures linked exchange trade fund (ETF) on the New York Stock Exchange last month. Now, anyone with a brokerage account will be able to buy and sell Bitcoin-backed financial products on the stock market. It’s an important step into the mainstream for the world’s most popular cryptocurrency, and an important step for crypto and crypto portfolio management more generally. Prices of Bitcoin seem to agree as well, with several new all-time highs being hit over the past few weeks.
With crypto products heading to the NYSE, many people are looking for new ways to manage and trade digital assets, especially with their financial advisors. One of the first questions people have about crypto is if it makes sense as a buy and hold asset. Today, we walk through what a buy and hold asset is, if it’s the right plan for many of the more popular cryptocurrencies out there, and how you can better manage digital assets while trading.
What is a Buy & Hold Investment?
At its most basic, buy and hold refers to an investment strategy where an investor buys stocks or investments, like crypto, and holds them, often for a very long time. As opposed to day trading, assets are purchased and expected to grow above inflation over a longer period of time. Most often, people use this strategy to keep their investment costs and fees down while investing for their retirement or long-term financial goals.
The strategy is popular for people who don’t want to have to worry about the ups and downs of a volatile market. It’s also great for anyone who isn’t interested in the major work and knowledge that goes into specialized investing.
Is Buy & Hold the Right Strategy for Crypto?
The past few years of news and headlines about crypto has only intensified its reputation for volatility and links to criminal activity. All the while, crypto (Bitcoin in particular) has become more and more mainstream, with many people attaching their entire financial future on the mining and trading of these unique financial products. But with all that volatility, is buy and hold a sound investment strategy?
Some financial experts think Bitcoin is too volatile for this strategy, and that changing approaches and regulations could make it a dangerous investment in the long term. Others, however, see its price changes as advantageous and, as long as someone pays close attention, cashing out on a good day of a year could be part of a sound investment strategy. If you are using professional crypto portfolio management, then it could be easier to hit that good day.
A Whole New Approach to Crypto Portfolio Management
HeightZero was designed to help people and financial advisors securely and simply manage digital assets with full compliance and regulation that keeps everyone protected. It’s a whole new approach to crypto portfolio management. Our technology grants exclusive capabilities for clients and their advisors to access and trade using the HeightZero platform. What’s more, it makes managing and viewing these assets easy and traceable, so everyone knows where things are going.
As the next step in crypto portfolio management, HeightZero is highly sought after by people looking to manage their crypto differently. Now, with Bitcoin hitting the NYSE, it’s time to look at crypto portfolios and trading not as a sideshow, but as the main event. HeightZero is here to make it happen in a way that’s simple and compliant.
Please note, this article is intended for informational purposes only and should not be considered investment, tax or legal advice. Consult your investment, tax and legal teams for definitive guidance on any digital asset.