Crypto Investing vs. Trading: Which Suits You Better?

Amateur investors and traders often look to the legends for inspiration. Warren Buffett and Ray Dalio are well-known for consistently profiting from their investments over the long term. Traders like George Soros and Paul Tudor Jones rely on more frequent buying and selling strategies, which defines trading. These professionals have made a living off the traditional stock markets and set standards that investors in newer markets, like cryptocurrencies, hope to emulate or beat.

Investors and traders are aligned in their goal of wanting to increase their investment value. However, investing and trading employ very different strategies despite some intertwining. Broadly put, investors buy cryptocurrencies with strong fundamentals, and believe the price will appreciate over the long term. Traders, on the other hand, hold onto cryptocurrencies for a short period, and leverage on the market volatility to generate profits.

We’ll look into major differences between investing and trading cryptocurrencies to help you decide which strategy serves you better.

What Is Cryptocurrency Investment? 

Investing in cryptocurrencies is a strategy to profit by buying and holding cryptocurrencies over a longer time horizon in the hope that the investment will appreciate in value. This is similar to the value investing method used by Warren Buffet, whereby investors look for underpriced cryptocurrencies.