What is the right way to invest in cryptocurrency? This venture capitalist has something to say

Fred Wilson, co-founder of the renowned venture capital firm, has shared his investment tips for Bitcoin and Ethereum (ETH) traders in an article titled “The Selloff.”

His investment firm, Union Square Ventures, is based in New York.

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Since January, the cryptocurrency market and major cryptocurrencies such as Bitcoin and Ethereum have experienced corrections. In some cases, the corrections in Bitcoin and Ethereum have even caused price drops of up to 30%, but the prices of these two cryptocurrencies have always recovered quickly.

Wilson mentioned in his blog that, just as he advised his daughter (who was also an early investor in Bitcoin and Ethereum), he encouraged traders and investors to consider the price trend and value of Bitcoin and Ethereum in 5 to 10 years, rather than focusing too much on the short-term situation.

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It is undeniable that most traders in the cryptocurrency market expect to profit from small pullbacks and price rebounds of cryptocurrencies such as Bitcoin and ETH. Therefore, when the prices of these two cryptocurrencies create new highs or remain in an upward position, traders usually start selling, eventually causing price pullbacks.

Wilson has been investing in Bitcoin since 2013 and has been buying Ethereum since its inception in 2015. Like most early investors, he believes that most market pullbacks are of little significance to his portfolio. Wilson sees Bitcoin and Ethereum as long-term investments, focusing on their long-term price trends.

Wilson wrote:

I started buying Bitcoin in early 2013, and ETH last year. I kept buying, but not too much at a time. Just a little bit every week. This way, little by little, it will add up, but you have to be patient and stick with it.

More importantly, Wilson stressed that he never tries to predict price pullbacks and when the market will bottom, even though his predictions are often accurate. Because Wilson treats his cryptocurrency portfolio as a long-term investment, he explained that he does not evaluate the short-term price movements of cryptocurrencies.

He added:

I'm not going to try to predict when the market will bottom or peak, although I can feel it. I'm not going to predict the short-term performance of these assets, I believe they will be worth more in 5-10 years than they are now.

Many analysts in the cryptocurrency space have said that most traders would be profitable if they traded just once a month. Over the past few years, Bitcoin has risen monthly because it has been able to rebound quickly after each market correction.

I'm always wrong. But to be honest, I don't really care. I'll continue to buy on pullbacks and rallies, no matter what the final outcome is. Because the important question is what these assets will be worth in 5 or 10 years.