How to choose the right investment horizon for cryptocurrencies?

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Investment horizon refers to how long an investor will hold onto an asset before cashing in. It is critical in investing as it helps in determining the holding period to compensate for the risk of a particular security.However, setting an investment horizon for cryptocurrencies isn’t so straightforward.

This is because there are over 18,000 different tokens and it is difficult to determine which one will outperform others over a certain period.Moreover, rug pulls, and other financial scams in the recent past have led to diminished investor trust. In such delicate situations, investors find themselves in a soup when deciding whether they should remain invested over the long-term or look for short-term returns.Also Read| Whale holdings in Cardano's ADA token hit record high—what it means for the networkTo arrive at the ideal investment horizon, investors must first understand the fundamentals of the cryptocurrency at hand.

One should also look out for the market capitalisation of the cryptocurrency and 24-hour trading volumes, as they are good indicators of the currency’s performance.The investment horizon is up to the investors:In a conversation with CoinDesk, crypto analyst Armando Aguilar, who was also a former digital asset strategist at Fundstrat Global Advisors, said, “The crypto and blockchain space is still in its early stage. Holding periods depend on the investors.”If you are a trader, your goal is to leverage the market volatility and realise profits.

But, if you wish to make gains over six months or one year, you must engage in extensive reading and be updated with the current as well as upcoming developments. These include network upgrades, hard forks, forged partnerships, projects under development, and the