Holding and trading are two very different methods of trying to make a profit in the cryptocurrency market. Both holding and trading investors seek profits through cryptocurrencies or tokens.
In general, holding investors seek higher returns over an extended period of time by buying and holding tokens.
Traders, on the other hand, take advantage of bull and bear markets to enter and exit positions in a shorter period of time, earning smaller and more frequent profits.
5 main differences between these types of investors
Trading is a method of holding cryptocurrencies or tokens for a short period of time. It could be for a week or even for days, the trader holds shares until the short-term high yield, while the person who does holding works on the principle of buy and hold.
These profiles invest their money for a few years, decades or even for a longer period. Short-term market fluctuations are insignificant in the long-term investment approach.
Traders observe the price movement of shares in the market. If the price rises, traders can sell the shares, it is the ability to time the market. On the other hand, when you make a holding you contribute to the art of wealth creation by accumulating interest and dividends over the years by holding those tokens or cryptocurrencies in the market.
Undoubtedly, both trading and investing involve risk to your capital. However, trading continuously involves a higher risk but higher potential returns as well, as the price can go up or down in a short period of time.
Since investing is an art, it takes time to develop. That is why long-term investors have lower risk and lower returns in the short term, but could generate higher returns by combining interest and dividends if held over a longer period of time.
The daily market cycles of cryptocurrencies or tokens do not affect long-term investments much, it is not the goal.
Traders put money into a short-term stock. They buy and sell fast to achieve the highest possible market returns. Missing the right time can lead to loss and that is why they watch the constant market trends and factors that can influence their assets to reach the highest price and record short-term gains.
Holding investors stay away from trends and invest in value. They invest over a longer period of time keeping an eye on the project they have invested in. They wait patiently until the token reaches its highest potential.
The InnovaMinex community is made up of thousands of investors who are holding their MINX because it is the most profitable action until all the developments come out and the price starts to rise.