Going Long in Crypto: Betting on Price Increase
Long is a situation where you buy a cryptocurrency with the expectation of selling it at a higher price in order to make a profit later.
What is long?
A long position is a position in which an investor buys a cryptocurrency with the expectation that prices will rise later, meaning the asset can be sold at a profit. Such a position is the opposite of a short position. In this case, traders believe that the digital asset will depreciate in the near future and use strategies to try to capitalize on this decline. Some crypto-enthusiasts, indeed, enter into long positions without even realizing it, forgetting that they have owned BTC for several years.
Compared to short positions, long positions are more common among investors and cryptocurrency traders. This is because more traders want to take advantage of the bullish growth in cryptocurrency prices for fear of missing out on profits. If indicators indicate that prices are about to rise, market participants can buy their cryptocurrency of choice on an exchange. Typically, traders decide to go long on digital assets due to major events that build confidence in blockchain and digital assets.
For example, in November 2020, BTC rose above its 2017 all-time high for the first time. That year, many traders flocked to cryptocurrencies amid increased institutional interest, and some investors saw digital assets as a way to hedge against stock market volatility. Meanwhile, PayPal introduced a new crypto service that allows its users to buy, hold and sell Bitcoin, Ethereum, Litecoin and Bitcoin Cash. These fundamentals could be decisive in the decision-making process for those who choose to go long.