Cryptos have hit the airwaves hard in recent years, thanks to the value surge of coins like Bitcoin and Ether. Although opinions vary from one party to the next, everyone seems to be taking part in the digital currency debate. Some say it’s the future and blockchain is the most revolutionary innovation since the internet, yet others remain adamant that the hype will pass and the world will hop on to the next new thing.
It’s not possible to read the future, but what is clear is that cryptocurrencies present a host of opportunities for technologists, entrepreneurs, and investors. If you’ve been thinking of exploring the crypto scene for some money, like many before you have done, here are four effective strategies.
Buying and Holding cryptocurrencies
Ask a bitcoin millionaire how they made their fortune and the will likely tell you they bought early and waited. You might find it hard to believe, but one bitcoin was worth less than ten dollars a mere six years ago. Those that believed in its potential and invested a few hundreds of dollars are now comfortably rich.
You won’t get a return on investment overnight but if you buy a coin has a promising use-case and hold it until it obtains a fair market share, you can make a lot of money. Bitcoins may seem expensive to acquire, but the world is only starting to warm up to the crypto idea. The few coins you buy from exchanges such as xCoins.io can become a fortune a few years down the road.
Cryptocurrencies have the reputation to fluctuate fiercely over short periods. The value of Bitcoin, in particular, has on multiple occasions shot up and then plummeted down by as much 20 percent within hours.
Buying and holding can yield excellent results, but if you don’t have the patience to wait years for meaningful appreciation, trading can be a better option for you. The idea is to study a cryptocurrency’s recent performance from a live trading website like Binance, buy when its value seems low, and then sell it after a few minutes or hours. If the coin is worth more than it was when you bought it, you will have made a profit.
Crypto-trading can work great if you understand financial charts and can make accurate predictions. On the other hand, making quick, inconsiderate trades will cost you dearly.
One of the most appealing aspects of cryptocurrencies is that it is entirely beyond the control of governments and financial regulatory bodies. Therefore, in addition to volatility, the price of cryptos also tends to vary across different exchanges.
Arbitrage is when you buy a coin from one exchange and sell it on another one where it’s going for a higher price. It might take some time to study the market, but if you know where to look, you can exploit spreads ranging from 5 percent to a whopping 40 percent.
Cryptocurrencies are a decentralized form of money, whose markets are owned and managed directly by their owners. So, while it’s a country’s government that regulates the production and distribution of traditional currencies, anyone can make cryptos.
Like real-world minerals, however, mining cryptocurrencies will require you to set up the infrastructure. Mining is typically done by using high-end GPU and ASIC machines to run lengthy computer algorithms repeatedly.
These rigs are expensive to acquire or build, which means it could take you a while before you recover your investment. Moreover, because they’re exceedingly power-hungry, you’ll also need to consider the enormous impact your activities will have on your electricity bill.
Nevertheless, if you’re able and willing to make the initial investment and you have access to cheap power, mining can earn you a good chunk of crypto money.
The world of cryptocurrencies is an exciting new venue for money-making. If you have the time, resources or the relevant expertise, you can successfully make use of its numerous opportunities. While there’s no guarantee that any of the methods above will work for you, you won’t know until you try.