Long
A situation where you buy a cryptocurrency with the expectation of selling it at a higher price for profit later.
What Is a Long Position?
Long positions are where an investor gains exposure to
cryptocurrency with the expectation that prices will rise at a later date, meaning that the asset can be sold for a profit.
It is the opposite of a
short position. Here, traders believe that a digital asset is going to depreciate in the near future, and they use strategies to try and capitalize on this downturn.
Indeed, some crypto enthusiasts have entered into long positions without even realizing it, after forgetting that they owned BTC for several years.
In some cases, long and short positions can be utilized without a crypto trader needing to physically own the cryptocurrency in question.
This is the case on
derivative platforms where financial instruments such as
options and
futures are offered. Both types of contract have become increasingly popular in recent years as the crypto markets matured.
Long positions are more common among investors and cryptocurrency traders when compared with short positions.
This is because more traders want to take advantage of
bullishness in
crypto prices for
fear of missing out.
If indicators suggest prices are about to rise, then market participants can purchase their chosen cryptocurrency on an
exchange.
Traders usually decide to go long on digital assets due to major developments reinforcing confidence in
blockchain and digital assets.
For example, BTC rose above its 2017 all-time high for the first time in November 2020.
The year saw many traders flocking to cryptocurrencies amid a backdrop of 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
fundamental factors can be crucial in the decision-making process for those who opt to go long.