For many, the cryptocurrency market still represents the big unknown in terms of the ways of investments and making money. If you are intrigued by the fantastic opportunities crypto market offers, and wondering how to make money with cryptocurrencies here is the explanation.
Can you make money from cryptocurrency?
It’s no longer a question if you can make money with cryptocurrencies but to find the appropriate way to do it. There are four ways of making money with cryptos:
- Long term investment
- Investing in ICOs
- Cryptocurrency Mining
Trading cryptocurrencies vs long term investment
In the cryptosphere, there are those who buy cryptocurrencies and those who trade them. While the former tend to take a long-term view, the latter mainly aim to take advantage of the volatility of the market to make their capital proliferate. You can buy and sell cryptos via crypto brokers and crypto exchanges.
For many cryptocurrency traders, cryptos are just financial instruments like any other. Their main advantage is their volatility, which makes it possible to make (very) short-term arbitrages and possibly to make substantial profits.
Those who believe in the long-term potential of digital currencies will often prefer to buy cryptocurrency.
These are often called “holders”, or buyers who hold their cryptocurrency for a long time. They are often convinced that the use of cryptocurrencies will become more widespread. Cryptocurrency buyers also consider specific cryptocurrency as a safe haven, just like gold.
For example, many long-time investors believe that bitcoin could reach a value of over $ 50,000 very quickly.
It is quite possible to trade some cryptocurrencies and hold others for the long term. Everyone must determine the strategy that suits them according to their means, their needs but also their investment objectives. However, thanks to new technologies it is possible to make the most of cryptocurrencies and their potential.
Investing in Initial Coin Offerings ICOs
Over the years, the opportunities for making profits in the cryptocurrency market attracted many investors.
Therefore the crypto sphere became a saturated market. With that in mind, you should also consider investing in less popular currencies called altcoins. Or even better, invest in the newly created cryptocurrencies, crypto services and applications.
This kind of investment is popular as Initial Coin Offer and is the sort of crowdfunding made entirely in Blockchain technology.
Initially, the main idea of an ICO was to finance new projects through the early sale of cryptocurrencies/tokens to investors interested in the project.
For instance, Ethereum once was the ICOs project and one of the most successful ones. It was based on the Bitcoin blockchain and in 2014 raised $ 18 million in bitcoin in just four weeks, breaking all crowdfunding records to date.
If you want to invest in the new blockchain projects, you need to get access to private investment groups and websites filled with useful detailed reviews on all upcoming ICOs.
Yet another way to profit on the crypto market is by mining the cryptocurrencies.
The advantage is that you don’t need initial capital to get your digital assets. What you need is to verify blockchain transactions by resolving the complex hashing patterns and completing the so-called blocks. In this way, you are verifying the legitimacy of the crypto transaction and get the reward for the successful accomplishment.
But this comes costly in terms of the hardware you need to invest in ( the processor costs approx $2000) and the gains can be very sporadic. However, if you are technically inclined, you might earn decent amounts this way.
To make money with cryptos, you need to have a solid knowledge of how the market works. Besides, you must understand the cryptocurrency market cycles and be familiar with the market indicators particularly if you are more into daily trading. Making money in this lucrative market can be an easy and pleasant activity.
But only if you first invest your time in research of the best opportunities, platforms and the way they work.