Wednesday, August 10, 2022

How To Make Money Off Cryptocurrency

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Pay Off Your Current Bills

Spending your profits on something new and shiny may be tempting. But, before you do that, make sure to pay off any debt first. Theres nothing wrong with enjoying your profits by buying what you want. However, be financially wise by paying off credit card dues and other bills before you splurge on something.

This way, you have a clearer picture of exactly how much you have in excess after paying off everything. You can then set aside a portion to reinvest and a portion to spend however you wish.

Plus, sitting on your debts when you have enough money to pay them off is just like giving banks free money. By not paying on time, theyre free to penalize you and charge you with late fees, which youll eventually have to pay later on.

Put Your Profits Away

Lastly, traders also take profits to put away in the form of coins to keep their capital away from the risks associated with daily trading. If, for example, you trade Bitcoin and are able to turn 2 BTC into 2.4 BTC, you can send the 0.4 BTC to a cold storage wallet, or an offline wallet. The amount can be held as a long position together with all other earnings you set aside.

However, note that you cannot quickly access these coins if you suddenly want to invest them the moment the market begins to enter bull season again. To hedge against this, you can also take short positions when the market is bearish to offset the potential losses that your banked coins might take.

Another option is holding cash, which may not be as rewarding as the other options but is still a viable option. You can deposit your crypto gains in a savings account for future investment opportunities or wait to buy during the next dip in the market.

Read Also: Which Cryptocurrency Should I Buy

Apply The Money Flow Index Indicator On The 5

This specific day trading strategy uses one simple technical indicator, namely the Money Flow Index. We use this indicator to track the activity of the smart money and to gauge when the institutions are buying and selling cryptocurrencies.

The preferred settings for the MFI indicator are 3 periods.

How to use the IMF indicator will be outlined during the next step.

See below:

A Brief History Of Bitcoin

What to know before opening a crypto interest account

Contents

  • 7 In Closing Is Bitcoin the Future of Money?
  • The worlds concept of money changed when, on October 31st, 2008, Satoshi Nakamoto published a whitepaper on a peer-to-peer digital cash system. Bitcoin was nothing more than an idea for years until it caught the attention of traders.

    In the early stages of Bitcoins development until 2010, the world had no idea of bitcoins coming value. The only people that knew about the cryptocurrency were tech-heads and gamers. It was in this initial stage of the cryptocurrencies formative years, where one of the biggest financial blunders of all time occurred.

    On May 22nd, 2010, Laszlo Hanyecz a Bitcoin enthusiast, made the worlds first Bitcoin transaction. Laszlo ordered two Papa Johns pizzas and paid for the delivery with 10,000 Bitcoins. At Bitcoins current price average sitting around the $10,000, that would make it $50-million for each pizza and thats before we include the tip.

    This event ranks right up there with the Microsoft founder, Ronald Wayne, who sold his 10-percent stake in Microsoft for $800, which would now be worth around $90-billion. Bitcoin got some notoriety in the gaming community over the coming years, but it wasnt until Mt. Gox came onto the scene in 2011 that Bitcoin exploded into the mainstream.

    Read: Should You Invest in Bitcoin? Complete Beginners Guide

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    Crypto Day Trading Strategy

    The idea behind crypto day trading is to look for trading opportunities that offer you the potential to make a quick profit. If day trading suits your own personality, lets dive in and get through a step-by-step guide on how to day trade cryptocurrency.

    Now, before we go any further, we always recommend taking a piece of paper and a pen and note down the rules of this scalping strategy.

    In this article, were going to look at the ‘buy’ side.

    Pick Up Coins With High Volatility And High Liquidity

    As previously discussed, the number one choice you need to make is to pick coins that have high volatility and high liquidity. If youre not day trading Bitcoin, which is the most liquid coin out there, and you like the altcoins, try to pick those coins that have good liquidity and volatility.

    There are more than 1600 coins on the market and growing. By following only the top cryptocurrencies, youll reduce your area of selection.

    Day trading smaller cryptocurrencies can also be a very lucrative business, but there are higher risks. Remember, crypto prices can crash just as fast as they have risen.

    Moving forward, youre going to learn how you can make money crypto day trading.

    Read Also: How To Buy Crypto With Fiat

    Icipate In An Airdrop

    The developers of a new cryptocurrency may do an airdrop a giveaway of their new coin in order to hype it and generate more interest and excitement around it. You may have to do a few things to have the potential of receiving new coins, such as follow the crypto project on social media, track it on a Discord channel or otherwise support the project.

    However, its worth noting that many airdrops are scams and, even if they do deliver you some coins, those coins may end up being worthless. That worthlessness may be good for tax purposes since you wont owe much, if any, taxes but it does nothing for your wealth.

    Daos Buy A Share In A Decentralized Autonomous Organization

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    In addition to the metaverse and NFTs, decentralized autonomous organizations are expected to play a significant role in the future of cryptocurrency and blockchain technology. In its most basic form, DAOs refer to projects that are collectively owned by the community. And, in order to become a part-owner of a DAO, you simply need to hold the respective token.

    There are many DAOs operating in this space and each project is unique from the next. One such example is Uniswap. This project is home to a decentralized exchange that enables people to buy, sell, and trade digital currencies without the presence of a centralized third party. Uniswap has since launched its DAO cryptocurrency and thus the project is owned by token holders.

    And, this means that any profits generated by the Uniswap exchange are subsequently distributed to those holding its DAO token on a proportionate basis. Moreover, those holding a DAO token have a say in how the respective project is run. This means that in order for a DAO project to make a decision about future development, it must first go to a vote.

    Read Also: How Can You Make Money With Cryptocurrency

    Get A Crypto Wallet For Buying Trading And Storing

    You will require a place to store your crypto a wallet. You can pick a software wallet like an app or a hardware wallet an offline sort of device like a flash drive.

    • Most software wallets, also known as Hot Wallets, are easy to recover if you lose your phone
    • Most hardware wallets, also known as Cold Wallet, aint easy to recover if you lose them

    Since software wallets are online, its faster and easier to trade or spend crypto. But vulnerable to online attacks that could lead to stolen funds. Hardware wallets are offline and impossible to hack, but the risk of getting lost or stolen is always there, like in any other real wallet.

    You can skip these steps by installing an exchange app like Coinbase, Coinmarketcap, etc. Below are the steps that you need to follow to set up your account-

    • Get swift verification
    • Transfer or deposit funds from the bank account to the crypto wallet

    This is the fastest way to start buying and trading cryptocurrencies. Your assets are stored in an exchange-managed wallet, which adds some risk. Think about it. You are a hacker trying to steal millions of dollars. Its a good idea to spend time hacking major exchanges to gain access to thousands of wallets. Hacking a software wallet is probably a waste of time.

    How To Invest In Cryptocurrencies: The Ultimate Beginners Guide

    Cryptocurrencies are seeing a massive surge in popularity. While they used to attract a very niche audience just a few years ago, today, everyone and their grandmother wants to learn how to invest. You probably cant avoid seeing a news article about the latest Bitcoin price or stumbling upon investment advice on social media.

    And the growth is not even close to being over. The global cryptocurrency market was valued at 332 million US dollars in 2017, has risen to 3.67 billion in 2020, and is projected to reach 394.60 billion by 2028 .

    So what does this all mean? Should you get involved? How do you get started investing in cryptocurrencies?

    If youre looking to get a better understanding of what cryptocurrencies are, how they work, and how to invest in cryptocurrency, then this guide to trading cryptocurrency is for you. Read on to find out how it works, what your options are, and the best and safest way to invest in digital currency.

    While the decision to invest in cryptocurrency is ultimately up to you, it is our hope that youll walk away from this guide feeling more educated, empowered, and confident that you have everything you need to start investing.

    Contents

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      Start Trading Different Cryptocurrencies

      One of the reasons that cryptocurrency trading is so good is that Bitcoin, the most prominent cryptocurrency, is very volatile. With this, the price moves up and down within a single day. Thus, good traders always have their eyes patterns and predict coins trajectory to go up. With this know-how, they can buy before and sell the coin when the price will fall. This technique now leads to huge profits. It is clear that with the correct trading decisions, a person can gain lumps of money. But also, they can make that money disappear quickly. So, only invest what you afford to lose.

      Grid Trading With Crypto

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      Grid trading is a trading method that consists of placing a bunch of buy and sell orders at predefined intervals around a fixed price.

      If you could think of it like this, lets say that Bitcoin is trading at $55,000 and you can see that that price goes from 55,000, up to 57, and back down to 53. When you set up this bot within this grid trading platform, youre placing several different limit orders.

      When the price goes up, you buy a small percentage, depending on how much you have invested, but it could be like making a $25 to $50 purchase, as it goes up you would sell and as it goes down you would buy. When it goes back up, if theres a profit then you would sell and then lock in that profit. Heres what it looks like in the software program:

      Basically what the key here is, the more that the coin fluctuates the more transactions are taking place, hence, more profit generating.

      So in this case, when youre setting up these, these trading bots doesnt have to be Bitcoin, you can choose almost any coin that you want.

      The software program Im using is called Bitsgap. With Bitsgap you connect your cryptocurrency exchanges and then set up the grid bots through their program. I know it sounds uber complicated. If it wasnt for the training I went through, Im not sure I could have figured it out on my own.

      I created two new crypto accounts, Binance.US and KuCoin, for the sole purpose of setting up these grid bots.

      Read Also: When Is It Best To Invest In Cryptocurrency

      What Are The Downsides Of Day Trading Crypto

      Many fortunes have been made in cryptocurrency, but it is important to always keep in mind that many, many more have been lost. The flip side of unprecedented price surges of several hundred percent is sudden drops. The very high volatility of crypto prices is a double-edged sword, and you need to keep this in mind. Making a loss is a matter of when not if. A good strategy will determine whether that loss is ruinous or merely unfortunate.

      In addition to price risks, the cryptocurrency space also presents some unique security risks that are not present in traditional financial markets. Security breaches at centralized cryptocurrency exchanges are risks that you should understand.

      Finally, trading fees can be quite high, especially for strategies that employ a very high frequency of transactions. It is important to understand the costs of actually using a trading platform before investing in it.

      So Is Casual Cryptocurrency Mining Worth It

      Not surprisingly, a lot depends on your energy costs. Where I live in Northern California, we have some of the highest electricity rates in the country. So my Nvidia RTX 3090, at around 100Mh/s, might earn around $5 per day mining Ethereum. But it uses about 270-300 watts of power to do it. Over the course of a day, thats more than $2 in electricity alone. Now, the 3090 isnt the best power performer, and the chart above shows some better options. But its an example that even with hardware you already own, cryptocurrency mining may be more of a fun hobby than a profitable enterprise.

      Enthusiasts also express concern about reducing the useful life of your GPU. As long as you dont let it overheat, and make sure your power system is up to the task, the consensus seems to be that the additional risk is small. Of course, these days if you do fry one, it may be hard to replace it.

      Feature image by Jernej Furman/CC BY 2.0

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      Also Check: Why Is The Cryptocurrency Market Down

      Hodling Invest In Cryptocurrency And Hodl Long Term

      This method from our list of how to make money with cryptocurrency is arguably the best option for beginners. This is because HODLing which is a play on the term Hold, simply refers to the process of buying a cryptocurrency and holding onto your tokens in the long run. This is no different from buying stocks and keeping the shares for several years.

      And in doing so, you dont need to worry about short-term price fluctuations especially when investing in solid and established cryptocurrencies like Bitcoin and Ethereum. For example, in May 2021, Ethereum was priced at $4,300 per token. Just one month later, the price of Ethereum had dropped to lows of $2,100.

      Had you panicked and sold your ETH tokens, you would have made a loss of approximately 50%. However, had you engaged in HODLing by November of the same year, Ethereum was trading at nearly $4,900 per token. This is just one example of many. The key point here is that the most effective way to invest in cryptocurrency is via a long-term strategy.

      Once again, in order to HODL your investments in the best way possible, you need to find a suitable exchange. eToro also fits the bill here, as you can invest in 60 leading cryptocurrencies from just $10 at industry-leading fees. Moreover, this exchange is approved by relevant licensing bodies in the US, and thus you will be able to HODL long-term safely and securely.

      Cryptoassets are a highly volatile unregulated investment product.

      Become A Bitcoin Consultant

      Chamath Palihapitiyaâs Bitcoin Price Targets For The Future, Will Bitcoin Reach These Prices?ð

      People that get involved with Bitcoin find themselves learning a lot about cryptocurrency in a short period. For some people, the information overload is too much to handle, and they cant grasp the topic. Others find the blockchain and hot and cold wallets fascinating, soaking up all the technicalities around the industry.

      If you start learning about Bitcoin, 6-months later, youll find yourself an expert about everything to do with the topic of cryptocurrency. If you put in the time to study how the markets work, and how to trade, sell, and buy cryptocurrency, thats valuable knowledge.

      Some people will pay you to learn what you know. You could put together information courses on how to trade, buy, and sell, crypto, and then promote it through social media. Selling a virtual product means you keep no physical inventory, reducing your overhead costs of doing business.

      Bitcoin consultants are in high demand, even in a falling market. If you build your reputation as an expert in crypto, eventually, youll start to obtain a client base. When the next Bitcoin bull-run comes around, youll find yourself in the perfect position to benefit from the next bubble.

      Read Also: What Crypto Should I Buy Now

      Add Value To Your Account

      Depending on how you choose to pay, you may have to fund your account before purchasing any crypto. If you’re using fiat currency, most exchanges allow debit and bank transfers. Some also allow you to fund a purchase with your credit card, though this can be a risky move with a volatile asset like cryptocurrency because interest costs can deepen your losses if your investments decline in value.

      If you already own cryptocurrency, you can transfer it into your account from a digital wallet or another platform, then use it to trade. Just be sure to verify that your crypto exchange allows trading between the assets you’re looking at. Not all cryptocurrencies can be directly traded for one another, and some platforms have more trading pairs than others.

      Another thing to note is that exchanges fees vary depending on what you’re buying and how you’re buying it, so review these details carefully.

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