Why is it better to hoard coins than to speculate in coins? When hoarding currency, should I buy spot or contract?

As we all know, hoarding coins refers to the act of purchasing and owning digital currencies (also known as virtual currencies), with the purpose of long-term investment and capital gains. Different from currency speculation, currency hoarding pays more attention to long-term value growth rather than short-term volatile transactions. So, why is it better to hoard coins than to speculate in coins? Should you buy spot coins or contracts when hoarding coins? Let’s take a look below.

Why is it better to hoard coins than to speculate in coins?

Although speculating in coins can carry out short-term transactions according to market fluctuations, relatively speaking, hoarding coins has certain advantages:

1. Long-term investment

Hoarding coins It is a strategy based on long-term investment in digital currency technology and industry prospects. By understanding the project background, team situation and technical development, investors can select and own coins with higher potential. This type of strategy is more robust than currency speculation and can withstand short-term market fluctuations.

2. Prevent losses caused by frequent transactions

Frequent transactions in currency speculation can easily bring greater transaction costs and the risk of market fluctuations. Hoarding coins avoids frequent trading operations, reduces transaction costs, and reduces uncertainty caused by market fluctuations.

3. Seize the opportunities brought by project development

According to the currency hoarding strategy, investors can select projects with greater potential and invest in them for the long term. As the project grows, investors can earn more capital gains, as the equity generated from the successful development of the project usually takes some time to reach.

4. Reduce emotions and stress

The currency hoarding strategy is relatively stable and does not require frequent trading decisions, which can reduce the emotions and stress caused by market fluctuations. Currency speculators must pay close attention to market trends and make timely buying and selling decisions. They are often easily affected by emotions, which in turn brings unnecessary risks.

5. Diversification of risks

Currency hoarding can choose different digital currencies for diversified investments to reduce investment losses caused by specific projects or market fluctuations. By properly diversifying investments, investors can gain a wider range of profit opportunities across the entire cryptocurrency market.

6. Invest more time and energy into project research

The strategy of hoarding coins is relatively simple. Investors will invest more time and energy into the research and analysis of different projects so that they can better understand their potential and Develop your future and make smarter investment decisions.

Should I buy spot currency or contracts?

Currently investing in spot currency hoarding is relatively safe. If you don’t touch the contract, the ups and downs are not particularly meaningful to investors. Firstly, the position will not be liquidated, and secondly, the investor will For long-term investment, it is not recommended to sell high and buy low. In fact, there are advantages and disadvantages to hoarding currency to buy spot and contract. Which method to choose to make money should be determined based on personal circumstances and risk preferences. The following editor will give you a brief introduction using hoarding Bitcoin as an example:

Hoarding currency in spot, as the name suggests, That is to buy one BTC and wait for it to rise. If the price of the currency rises, throw it away and use the price difference to make money. This means that whatever the current price is, we must buy it at that price. We choose to buy because of its future value, but there are only so many products. If there are more people buying the product, it will be worthless if it is not circulated. For example, the current price of BTC is 11100u (u is equivalent to the US dollar). If you feel that this is a suitable low point, you need to pay 11100u to buy a BTC, and then all you need to do is wait for the BTC to increase in value.

If the market does rise, for example, if you sell when it rises to 12100u, the net profit will be 1000u. This is the only way to make a profit on the spot, that is, buy at a low price and sell at a high price. However, if BTC falls after you buy it and falls to 9000u, you have only two choices. The first is to wait for it to rise back before selling, and the second is to lose money. Sold, similar to stocks.

Contract currency hoarding, that is, contracts can replace currency hoarding, save assets, and expand financial management: Now there is a "coin hoarding party". If they hoard 10 BTC, it will only cost tens of thousands. However, this group of people can choose to get it first 5 BTC, and then open a long order. Long-term investment in a perpetual contract with multiple orders completely replaces hoarding of coins; at the same time, you can save more than 200,000, and this money can be used for financial management.

The key feature of the contract is that it is leveraged and has a dual trading system, so it is more flexible than spot. At the same time, leverage can increase your capital utilization. Therefore, with the same principal, the number of shares held is more than that of spot, so the profit will be higher. It is faster than spot trading and is more suitable for customers with less funds to operate short-term. Two-way trading that can operate both long and short also makes the contract more flexible. However, the risk of contracts is indeed greater than that of spot. Since the leverage system is a margin-guaranteed transaction, there is a risk of liquidation if your position is too heavy or your investment direction is wrong and you suffer serious losses.

In general, hoarding coins pays more attention to the possession of long-term value than speculating on coins. It is less affected by short-term market fluctuations and has a more durable and lower-risk investment strategy. However, investors still need to consider carefully when choosing currency hoarding strategies and fully understand the risks and opportunities of the cryptocurrency market.

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