The Bitcoin halving event is almost here, and with it comes a theory of a potential bull run soon. Meanwhile, crypto investments have already become very popular in recent months, coming from better market sentiments, the US spot Bitcoin ETFs, and expectations of a post-halving rally.
Since the Bitcoin halving event will impact the supply of BTC, a long-term crypto investment strategy can be pretty important for trader. Just a little after halving, Bitcoin hovers around $66,000. Read ahead as we present a few long-term crypto investment strategies for investors at this point in the crypto market!
Bitcoin halving in the past
The Bitcoin halving event reduces rewards for Bitcoin mining by half. It occurs approximately every four years (after 210,000 blocks). Historical price patterns of Bitcoin directly indicate market rallies before and after the event.
As the above chart shows, the first Bitcoin halving event at the end of 2012 was immediately succeeded by a rally. Similar occurrences can be observed in 2016 and 2020 as well.
At the same time, Bitcoin’s price surged significantly in the years after each halving event. For instance, the 2017 and 2021 crypto bull runs were preceded by Bitcoin halving events in their previous years.
Although one can never be completely sure of a post-halving rally, investing in crypto before the Bitcoin halving event of 2024 does sound like a wise decision. A pre-halving rally has already happened, with BTC clocking around 50% returns this year.
Investing in crypto: long-term strategies
The following strategies could work for your crypto investments while navigating through the Bitcoin halving event:
Buy and hold:
The traditional buy-and-hold investing strategy could apply to you when investing in crypto. If you already hold crypto investments, especially in BTC, you will likely witness a price jump after the Bitcoin halving event. Hence, you could hold on to your investments for the long run.
Further, you could invest more in the crypto market at regular intervals for dollar cost averaging.
Exit strategy:
Although you should make long-term investments for the highest returns, an appropriate exit strategy should also be in place. Since the crypto market is highly volatile, planning your exits also makes sense if you invest to achieve your financial goals.
For instance, suppose you had set a ten-year target to achieve a crypto portfolio value of $100,000 to buy a house. Once your goal is in sight, you should make the necessary arrangements to book profits or shift your holdings to safer assets. Thus, it is very important to go through the Bitcoin halving event with proper research and an exit strategy.
Diversification/ risk management
As mentioned, the crypto market tends to show signs of high volatility. The Bitcoin halving event could also lead to a spike in volatility.
As a result, once you’ve decided your risk appetite, you could diversify your crypto investments across multiple tokens. It will lead to a balanced portfolio, and help you tackle any volatility in a specific token post the halving event.
Understand regulations:
Globally, crypto regulations have become an important subject for governments and regulators. As a long-term crypto investor, having a deep understanding of these regulatory rules and laws is important. Knowing these laws, you can avoid uninformed investment decisions and regulatory penalties or fines.
For example, in Europe, the Markets in Crypto-Assets Act asks for the tracing of crypto investments. If you’re planning to invest in the crypto market around the time of the Bitcoin halving event, you might want to read up on your country’s crypto rules and regulations.
Safeguard your crypto assets:
The crypto market has also seen a series of scams and attacks on investors, where many have lost their holdings. A bullish crypto market or large activity in the market has also attracted online scammers and fraud. Be mindful of them, and store your holdings in safe and trusted crypto exchanges or wallets.
Millionero is one such crypto exchange that adheres to the highest safety and privacy protocols! Moreover, our list of several useful features will make your crypto trading journey a smooth one.
Also, check out the Millionero blog, which tracks the global crypto sector and provides you with timely updates!
Disclaimer: Cryptocurrencies are an inherently volatile asset class, and investments can carry substantial risks. This information is for educational purposes only and should not be construed as financial advice. Always do your own research and conduct due diligence before investing in crypto projects.