crypto strategy

3 cryptocurrencies to buy and keep forever | The Motley Fool

When investing in cryptocurrencies, you need to understand that it is a very volatile asset class. Some would call the entire category “speculative,” and there are plenty of digital coins that fit that description for every investor. However, if you are willing to take this risk, it is possible to achieve significant returns.

One of the main differences between investing in cryptocurrencies and traditional stocks is that the crypto market is still relatively new and not as well regulated, which can make it riskier. However, this also means that there is potential for higher returns. More risk can equal more substantial rewards, assuming things go as planned. You are compensated for the risk you take.

Now you can manage crypto risk by sticking to the safest options. Much like how you wouldn’t want to put all your money in a single penny stock, you don’t want to put all your money in an unproven token, perhaps one with a cute dog mascot. (Ahem.) Instead, you want to diversify your portfolio by investing in a variety of different, established cryptocurrencies. Let me show you some examples that could provide a solid foundation for your crypto portfolio today.

These are the cryptocurrencies you can buy today and keep forever, for all intents and purposes.


No alarms and no surprises, right? If you’re just dipping your toes in the waters of cryptocurrency, Bitcoin (BTC -2.39%) should probably be the first and perhaps the biggest position to build.

It was the first cryptocurrency, it is still the most important in terms of market value and daily utility, and it was specially designed to retain its value over a long period of time. A tightly limited inflation system is built into the Bitcoin Code, and 91.7% of all Bitcoin that will ever exist has already been mined. A few nations already accept it as legal tender, and others are considering doing the same.

I cannot guarantee that Bitcoin will achieve all of its goals or gain value over time. However, it has the first mover advantage and indeed it will take a very special cryptocurrency to replace it as the gold standard of the crypto market.


Again, I’m not here to shock you with wild ideas. The smart contract platform Ethereum (ETH -3.81%) is more of a bet on blockchain-based financial apps and services gaining traction. If you think decentralized banking, insurance, and payment systems sound like a great idea, Ethereum would be the obvious place to start investing.

Over time, these new tools are poised to disrupt several multi-trillion dollar industries – and Ethereum is involved in more of these projects than any other cryptocurrency. Much like Bitcoin, Ethereum defends its dominant position in the market with the strengths of scale and experience.

3. Staking Tether or USDC

Okay, maybe this idea is less obvious. It should also be the most reliable and traditional option on my shortlist. You can grab many different stablecoins, such as the industry leader Attached (USDT) and finalist USD Coin (USDC 0.12%) — and then earn interest on those assets. Some of these coins, including USD Coin and Tether, are backed by cash and federal bonds, while others are based on less solid ground, but all are meant to reflect the intrinsic value of the US dollar, the euro, Japanese yen or other traditional currencies.

This idea comes close to mimicking the high-interest savings or money market accounts of decades past. It’s made by stake your stablecoins, which allows other investors to borrow against your assets and pay interest as you do for any serious loan. Yes, this is very similar to your old bank’s money market accounts, but the returns you earn from staking stablecoins tend to be more generous.

It is therefore the perfect choice if you are looking for ultimate stability, combined with generous interest rates and numerical flexibility. If Bitcoin and Ethereum are too rich for your blood, this is the most sensible way to manage your liquidity reserves on the blockchain. Just make sure your chosen stablecoin is on a solid financial footing and earning your staking rewards from an equally respectable crypto exchange. Things can get ugly when experimental stablecoins don’t live up to their name.

Don’t play a high-stakes game of Jenga with your crypto investments. Image source: Getty Images.

Why Safer Cryptos Matter

You don’t have to hold onto your crypto investments with diamond hands, ignoring every good or bad news because you’ve made a firm commitment. If anything changes in the core value proposition, you are always free to act. Instead, the key is to not get carried away by the hype and make impulsive decisions. Just like you wouldn’t want to sell all of your equity investments after a single bad quarter, you don’t want to sell all of your crypto investments after a bad day or a harsh crypto winter.

Successful investors take a long-term view and hold onto their investments for the long term. This is a great strategy to follow. Letting your winners run unlocks the magic of compound returnsthis is how master investors like Warren Buffett made their billions.

Investing in cryptocurrencies can therefore be a good idea if you are prepared to take the inevitable risk and focus mainly on safer options. There is a place for altcoins with promising long-term prospects. I could break your ear the unique potential of the cross-chain connector Peas (POINT -4.07%) or the frictionless international payments you get from Ripple (XRP -1.17%). I own both of these tokens, but with fairly low cash commitments. More speculative options may belong in your portfolio, but these investments should be smaller due to their additional risks.

Remember, only buy and hold larger stakes in the safest cryptos and avoid selling them based on short-term news. A sprinkling of more exciting opportunities keeps things interesting, but that shouldn’t be the heart of your crypto portfolio. This approach is similar to buy and hold stock market investmentand may apply whether your investments are digital or not.

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