How does compounding yearly affect the returns on cryptocurrency investments?

1 answers

• Nov 26, 2021 · 3 years ago
  Compounding yearly is a strategy that can significantly boost your returns on cryptocurrency investments. It works by reinvesting your profits back into your investment, allowing them to generate additional returns. This compounding effect can lead to exponential growth over time. For example, let's say you invest $10,000 in a cryptocurrency that has an average annual return of 20%. If you compound your returns yearly, your investment would grow to $61,917.36 after 10 years. However, if you don't compound your returns and instead withdraw your profits each year, your investment would only grow to $32,000. So, compounding yearly can make a big difference in your cryptocurrency investment returns.
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