Bitcoin reaches another all-time high. The market cap is now over a hundred billion dollars. Altcoins or alternative cryptocurrencies are also on the rise. With all the hype about Bitcoin and other altcoins, it’s easy to forget that cryptocurrency is a volatile market. Investing in cryptocurrency can be profitable, but it’s also risky.
However, it’s also true that you can make a lot of money in cryptocurrency only if you know where and how to invest in cryptocurrency the right way. Even though there’s no single guaranteed strategy to make money from cryptocurrency, there are still some smart strategies that you can use as a guide.
Here’s a list of seven smart strategies to make money from cryptocurrency:
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Start Mining
Mining is how some cryptocurrencies are created, which anyone can do at home. Mining involves compiling transactions into blocks, solving computational puzzles, and adding them to an immutable public ledger—all by using computer power. Miners receive rewards in the form of coins for their efforts.
If you have the resources, you can start mining even at home, on your own. However, keep in mind that mining crypto requires a lot of computing power, which can be expensive to maintain. The electric bill alone can be quite costly, so ensure that you do your research and weigh the pros and cons before mining.
There are also mining pools for those who want to pursue mining, but don’t have the resources. Mining pools are groups of miners who work together to mine coins and share the rewards. Joining a mining pool might not give you as much profit as mining solo, but it’s definitely a more affordable option.
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Launch Your Own ICO
If you have an excellent idea for a blockchain marketing agency, you can launch your own ICO (initial coin offering). This is a way to raise money for your project by selling tokens or coins. The best way to get started is to create a whitepaper explaining your project in detail. You can then use social media and cryptocurrency forums to build up community interest in your project.
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Invest In ICOs
Initial coin offerings or ICOs are a way for companies and projects to raise capital. Sometimes, the projects would even give away free tokens or coins. If you believe in the project, investing might be a good idea. However, keep in mind that some ICOs are scams, and the people behind them are just out to swindle money from people, so do your research before investing.
Signs that an ICO might be a scam include:
- The project doesn’t have a credible team behind it.
- The whitepaper is poorly written and doesn’t explain the technical aspect of how the project will work.
- The website looks unprofessional
- There’s no clear explanation of what the tokens or coins are for.
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Trade On Exchanges
Cryptocurrency exchanges enable people to trade cryptocurrencies for other digital currencies or fiat money. There are a lot of exchanges out there, but not all exchanges allow you to trade coins for fiat money, so it’s best to find an exchange that supports a wide variety of cryptocurrencies.
Some do crypto trading for a living, and some simply trade to invest. If you want to make money off of trading cryptocurrencies for a living and work in the comfort of your home, then you need to know that it’s not easy. Learning all the different technical indicators and chart patterns takes time and effort.
Below are three tips for those who want to start trading cryptocurrencies:
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Do Your Research And Learn About The Different Types Of Indicators And Chart Patterns
Technical analysis involves learning about different chart patterns and indicators. Some examples of the most common trading indicators are moving averages, RSI, and Bollinger bands. These indicators can help you determine the right time to buy or sell a particular coin.
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Use Limit Orders
Using limit orders is when you place a sell or buy order for a coin at a set price. This way, you can ensure that you get a better price than the one listed on the exchange.
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Use Stop-Loss Orders
Stop-loss orders enable investors to automatically execute orders when they hit a specific price. This can help you protect your investment if the market takes a turn for the worse.
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Participate In Airdrops
Airdrop is when a blockchain project distributes free tokens or coins to the community. Airdrops usually happen when a project is just starting, and they want to get the word out about their project.
If you’re interested in a particular airdrop, all you need to do is join the project’s social media group or forum pages, and follow their instructions. Usually, you’d need to submit your wallet address, and sometimes even share a tweet about the project.
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Buy And Hold
Bitcoin was the first cryptocurrency to come out, and it’s still the biggest one on the market. But, years ago, Bitcoin was worth as little as a few cents.
If you invested in Bitcoin initially, your investment would’ve grown massively. However, there’s a catch: Bitcoin has experienced several major dips where the price dropped by over 70% within a month. So, how do you make money in this scenario?
You buy and hold, which means you buy the coin when it’s trading at a low price, and then wait for the price to go back up. What’s important is to have a long-term view and not to panic sell when the price drops. But, this is only advisable if you’ve already done your research on the coin. If you believe that the project has a promising future, you can hold your coins and wait for the price to go up.
Final Words
Even though many would say that cryptocurrency is a bubble and that its market will eventually burst, there are still many opportunities to earn money from it. The key is to do your research and not invest in something you don’t understand. The seven strategies listed in this article should give you a head start in your journey to making money from cryptocurrencies.
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