How to Make Money Trading Crypto
The opportunities in the ETH/BTC and all other cryptocurrencies, in general, can never end. Launched in 2009, Bitcoin has made its mark as the most dominant cryptocurrency in the market. Ethereum is another digital currency coming closest to the leader in terms of value. The coin got its value and worth today through smart contracts.
The cryptocurrency space is a full-blown marketplace that has significantly evolved. From simply being passive investors to active spot and daily traders, the market is volatile. With the rise of NFTs more recently, an artist made close to $70 million on one NFT. Surprisingly, these NFTs are not exactly cryptocurrency, but people make a lot of money from them.
In this guide, we’ll go over different ways to make money from cryptocurrencies.
1. Learn About Crypto
There is a lot of buzz globally about the evolution of cryptocurrency. It’s almost impossible to find those who haven’t heard one or two things about it. However, to make money from cryptocurrency, you’ll need more than learning one or two. You’ll need to understand what it is all about, from its definition.
One common mistake newbie traders make is to pay an “expert” a training fee and start trading immediately after the training. While this may work out fine, you’re only a half-baked trader. Things may run fine initially, but the crypto market is very volatile. Without good knowledge, the market may go against your prediction.
2. Understand Trading Techniques
After you understand the common and necessary cryptocurrency terms, you can now think of trading. The market has only two directions; up and down. The directional frequency depends on the market state and many other factors. For instance, a currency may go down continuously before climbing back up in value.
When you want to trade cryptocurrency, you have two options. You may decide to trade under a CFD contract or buy these digital assets for a while – with the hope of an increase. Trading a CFD is more like giving an accurate prediction of the market behavior. Before you can trade at this level, you need not only knowledge and experience but capital.
Both techniques work fine and can be profitable. But waiting on a currency to rise is a risky choice because the same way a currency can rise, it can fall.
3. Passive Income
Investing passively into cryptocurrency is precisely how it all started. Are you planning to make money from cryptocurrency by practically doing nothing? Then passive investment is the way to go.
To make money, you only need surface knowledge about cryptocurrency and market behavior. What matters to you are the stable coins you can invest in with larger potential profit. A good option is either Ethereum or Bitcoin. Both cryptocurrencies are the most stable coins in terms of value.
Therefore, if there is a possibility of any loss, it is minimal. Mainly, you can only experience loss trading passively when the marker is down.
4. Day/Spot Trading
You can make money from cryptocurrency every single day and minute of your life. However, to make much money, the only way to go about it is through spot trading. Basically, it means you’re taking trades at the spot in one day. The profit margin may not be a large one, but because it’s multiple trades, you make a lot of profit.
While there’s a lot of profit to make from day trading, it is the most challenging form of trading. Every time, you’re slowly calculating how the market will take shape, so you can take sell or buy positions. The aim is to buy at a lower price and sell when the coin gets a higher value.
5. Initial Coin Offering
Initial coin offering (ICO) is another way to make money while trading. It has a lot of similarities to passive trading. This time, it comes bearing a lot of risks.
Because of the growth in crypto, more and more coins are kicking into shape. Many companies and software developers try to list a coin on popular online exchanges like Binance and Changelly. Before they get on these platforms, the owners must have gone through crowdfunding, also known as Initial Coin Offering.
The aim is for the investors to pay some money to make the crypto value. When you invest in an Initial Coin Offering, you will smile if it works out. But if it doesn’t, your money may be wasted.
There are a lot of ways to profit from cryptocurrency. The provided ones are the most commonly used method to make a fortune dealing with crypto. Choose what appeals to you more and start experimenting. But remember to be cautious and not invest heavily.