People enter the cryptocurrency market to make money, but not all manage to achieve their goals. Many give up during this journey since the fluctuations can be quite overwhelming and losses may occur. Others fall into scams and send their digital assets to fraudsters, which is also a real danger to those who aren’t familiar enough with the space.
One of the greatest misconceptions is that should have serious technical background in order to deal with cryptocurrencies. The truth is that there are people who’ve already made millions of dollars without even understanding how the blockchain works. And if you register on an exchange such as Binance, you’d see that dealing with such digital assets has been made as simple as playing a game. Let’s dive right into it.
1. Just buy crypto for the long term
This is among the most common ways of making a profit in this hectic market. Most investors buy well-established coins such as Bitcoin, Ethereum, Ripple, and wait till their value increases. Some even look at cryptocurrencies as their savings account for retirement. Oftentimes looking less regularly at this volatile market is better for one’s mental health.
The baskets of these investors are usually comprised of Bitcoin and Ethereum as they have stood the test of time (especially since 5 years can be considered an eternity in the world of crypto), which is why they can be considered to be a relatively safe investment in this regard. Some people also put aside some money for the coins with smaller capitalization that they feel have a lot of upward potential – these decisions are usually taken upon a fundamental analysis of the asset’s strengths and not upon technical analyses. Then all you’d need to do is actually commit to hodling (a popular misspeling of the word ‘holding’).
Consider diversifying your portfolio through a mix of all coins that have a promising future value due to their fundamentals. You don’t need to buy only the cryptocurrencies that are in the top 5 in terms of market capitalization.
2. Day Trading
Most people who’ve heard of the cryptocurrency market believe that the only way to earn in this space is through buying and selling digital assets on a daily basis. This is a gross misunderstanding, however, there are a lot of people who make a decent living out of it.
Let’s get things clear – day trading can be both rewarding and excruciating. Not only do you need to be skilful in analyzing market charts, but you also need an iron mindset. Price crashes shouldn’t bother you, nor should price spikes excite you.
Anyone can try out day trading, all that it requires is for you is to analyze the market, decide where a coin’s bottom or top are expected to be and start buying and selling. As easy as it may sound, it could be a full-time job, which is often associated with a lot of stress.
Trading via an automatic trading platform (utilizing a trading bot) is also a possibility, however, their success rate can be considered to be dubious.
3. Stake Cryptos
Staking is essentially the ‘mining’ of networks using the PoS (Proof-of-Stake) consensus model, meaning that it is used for validating transactions. Investors can stake their holdings (lock them up for a certain amount of time) to forge new blocks on the blockchain. This way transactions are validated, with the provider receiving rewards proportionate to their participation.
Among the coins that can be staked are ADA, DOT, KSM, Decred, as well as many more. You can do that through a cold wallet or directly on some exchanges (such as Binance). When staking crypto, you should pre-set the period for which your assets will be locked. The standard options are 15, 30, 60, 90, or 180 days. The longer you stake, the bigger ROI (Return on Investment) percentage that you receive.
The world of cryptocurrencies presents enormous opportunities. Each of the methods presents has its ups and downs and is suitable for different types of people. Choose the one that best suites you according to your risk tolerance.
Nothing on this website should be perceived as financial, investment or trading advice. We urge you to do your own research prior to investing and we highly recommend that you consult a certified financial advisor.
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