How To Responsibly Invest In Crypto
If you feel you need to scratch the crypto itch, you can make room for it in your portfolio alongside your stocks and bonds.
Bitcoin’s performance doesn’t appear to be directly correlated to stocks, and it’s helpful to have some assets do well while others tank. But, as Money has previously reported, the correlation rises during “bad times,” so you need to be careful about overexposing your portfolio to cryptocurrency.
Experts say you can allocate up to 5% of your overall wealth to riskier investments, like cryptocurrency. Just make sure you arent expecting to become a millionaire overnight, and that the money you put in is money you can risk losing.
Working For Cryptocurrency Organizations
You know how the saying goes: if you cant beat them, join them. Working for cryptocurrencies is a very safe and sure way to earn money while being an active member of the cryptosphere. If you have programming skills, writing skills or design skills, you can offer these services for a fee which can be paid in cryptocurrencies. There are plenty of platforms where you will be paid for your services in cryptocurrencies. These include Jobs4Bitcoins, Coinality, Angle.Co, bitWAGE and CoinWorker, among others. Not only do you get to be paid for doing whatever it is youre good at, but you also get paid in cryptocurrencies, which means you can take advantage of the price appreciation that ensues.
Buying And Selling Cryptocurrencies Via An Exchange
When you buy cryptocurrencies via an exchange, you purchase the coins themselves. Youll need to create an exchange account, put up the full value of the asset to open a position, and store the cryptocurrency tokens in your own wallet until youre ready to sell.
Exchanges bring their own steep learning curve as youll need to get to grips with the technology involved and learn how to make sense of the data. Many exchanges also have limits on how much you can deposit, while accounts can be very expensive to maintain.
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How To Make Money Trading Crypto
However, it is equally possible to make money by trading cryptocurrencies at a specific price. Each cryptocurrency is traded using a specific technique. Each of these strategies has its own set of associated costs and benefits. Following is the procedure you can use to make money trading cryptocurrency. Exchanges: The first and simplest way to make money trading crypto is by simply buying cryptocurrency on the most popular cryptocurrency exchange such as Binance. Being the largest crypto exchange in the world, it offers the largest trading volume of its currency and offers the highest potential for high trading fees. To make the most out of this process, the reasonable minimum amount that a new investor should purchase to get started is $100. This is to be noted that the fee per transaction starts at $0.
What Is A Cryptocurrency Exchange
A cryptocurrency exchange is a platform where you can buy and sell cryptocurrency. You can trade one coin for another, like Bitcoin for Ethereum, or you can buy crypto using a regular currency like U.S. dollars.
These platforms facilitate crypto purchases, allow you to convert cryptocurrencies back into dollars, and transfer them out of the exchange. Different exchanges come with different features, which may sway you toward choosing one exchange over another.
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Insert Price And Set Slippage
Insert the amount of BUSD you are looking to trade for the shitcoin token you are willing to buy. If $200 worth of BUSD, that should give you several billions of that Shitcoin. So you buy and HODL.
You will also pay a couple of BNB gas fees, so make sure you have the required amount of BNB gas fees to cover up for the transactions.
Don’t Try To Time The Market
When you look back in time everything seems very logical and obvious. You may regret not having bought Bitcoin at $1,000 or not having sold it at its peak. This regret will get you nowhere. Do your research and if you feel that a particular crypto is undervalued, then buy it. Or if you think it’s overvalued, then sell it.
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Day Trading With Cryptocurrencies Coins And Tokens
Not everyone has money they want to keep locked away as an investment in cryptocurrencies. Many would prefer to invest with a shorter time horizon. But this requires an appetite for risk. It would involve buying and selling fast, as well as being deeply involved with how and why the value of different cryptocurrencies change.
Experts only recommend this method for people who feel confident enough to time the coin markets, knowing the fundamentals well enough to consistently buy at a lower value and sell at a higher value. Some people may even buy the same coin at different price points, using dollar cost averaging, provided theyre confident of selling enough at a profit.
As expected, this approach would mean a lot of trades being done, so the per-transaction fees and tax would need to be considered. In addition to exchange fees for depositing and withdrawing investment in cryptocurrencies, sizable gains would be subject to income tax so the actual profits in hand may be lower than what is visible at face value.
This method does not always yield the most profits, but it is usually the one where people lose the most on their bets.
How The Leading Crypto Traders Make Money
Cryptocurrency has become one of the most speculative assets in the contemporary world. It has managed to get attention from a large number of investors due to low fees and higher returns. If we invest in any other assets like stocks, we may end up paying a lot of money as brokerage fees.
However, the cryptocurrency market is one of the least regulated among all the assets. The barriers to entry in this market are very less. The lack of regulations in the cryptocurrency market makes it easier for investors to create an account and start investing.
Cryptocurrency is seen as the future of the global payment system. Popular cryptocurrencies like Bitcoins are already being accepted by many brands as a mode of payment. This includes many prominent companies like Microsoft, Burger King, Wikipedia, Twitch, etc.
Another great reason to invest in the cryptocurrency market is liquidity. A highly liquid market enables investors to sell the asset in case if there is any disturbance in the market.
The profit potential also remains very high in the cryptocurrency market. One of the biggest examples of cryptocurrency gains is Bitcoins. Bitcoins gained as much as 5 times during the period from September 2020 to February 2021.
In this article, we are going to list some of the ways that leading cryptocurrency traders utilize to earn money.
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Day Trading And Scalping
A crypto day trading strategy allows the trader to take full advantage of cryptocurrency assets price volatility. As mentioned earlier, virtual assets are currently extremely volatile, which works to the advantage of a day trader.
The day trading strategy is a game of numbers strategy. A day trader will make multiple trades within a day, buying low and selling high within little gains that compound to large sums by the end of the day. Typically, sometimes it gets hard to perform this manually. To succeed in this strategy, you will need to consider automating your trades using trading applications or crypto trading bots like Coinrule.
Please note: It is not recommended that you begin your trading journey as a day trader. This is because this strategys fast-paced nature will require that you make fast decisions, and there is little room for research between trades.
Scalping is a part of day trading but typically involves concise trading periods. Think minutes.
When either day trading or scalping, many trades will result in both wins and losses. The idea is to make sure that the win/loss ratio is in your favor. Score more wins to consider your strategy a success.
Tips To Invest In Cryptocurrency Safely
Investments are always risky, but some experts say cryptocurrency is one of the riskier investment choices out there, according to Consumer Reports. However, digital currencies are also some of the hottest commodities. Earlier this year, CNBC forecasted that the cryptocurrency market is expected to reach a value of $1 trillion by the end of 2018. If you’re planning to invest in cryptocurrencies, these tips can help you make educated choices.
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A Brief History Of The Crypto Industry
The cryptocurrency industry has grown substantially since Satoshi Nakamoto published the original Bitcoin whitepaper in 2008. More than a decade later, most people are aware of the terms Bitcoin and cryptocurrency.
In 2017, at the peak of the interest in cryptocurrencies, How to buy BTC was the third-ranked How to Google search. While the market capitalisation of the crypto asset class has fluctuated wildly with price swings, it nevertheless increased from roughly $10bn in 2013 to $237bn by the end of 2019. Similarly, over the past five years, the growth in Bitcoin unique accounts and transactions has averaged nearly 60 per cent per year.
Since 2009, the crypto space has created its fair share of wealth for early adopters and investors. Some, like the Winklevoss twins or Changpeng Zhao, used their investment gains to build businesses in the crypto ecosystem. The Winklevoss twins, for instance, built the Gemini exchange, while Changpeng Zhao founded Binance, one of the largest cryptocurrency exchanges in the world.
There are plenty of other examples. Valery Vavilov used his early interest in blockchain technology to start a Bitcoin miner Bitfury. Today, the company also produces and sells hardware for Bitcoin mining and generates over $400m in revenues. Anthony Di Iorio financed some of the early development of the Ethereum blockchain and has since invested in other crypto projects like Qtum, Vechain and Zcash.
How To Day Trade Cryptocurrency
The crypto markets unique characteristics require you to have a firm understanding of how it works. Otherwise, your experience can be like skydiving without a parachute.
The good news is that were going to provide you with everything you need to survive crypto day trading.
Day trading the cryptocurrency market can be a very lucrative business because of the high volatility. Since the crypto market is a relatively new asset class, it has led to significant price swings.
Before day trading Bitcoin or any other altcoins, its prudent to wait until we have a high reading of volatility. The good news is that even when we have a low reading of volatility relative to other asset classes, this volatility is still high enough that you can generate a modest profit on your trades.
Crypto day trading also requires the right timing and good liquidity to make precise entries.
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How To Choose A Cryptocurrency Exchange
There are a few different factors to consider when looking for a cryptocurrency exchange. Here are a few we recommend you look into before choosing one:
- Accessibility: Not all states or countries allow access to every crypto exchange, so make sure whichever exchange you choose is available where you live
- Security: Different exchanges offer different security measures and insurance policies
- Fees: Understand what it will cost you to buy and sell crypto on the exchange you choose
- Coins offered: Some exchanges offer only a limited amount of coins
- Storage: Many exchanges come with an associated crypto wallet offering to help you keep your investment secure
Don’t Play With Derivatives Unless You Are A Pro
Derivatives are financial instruments that derive their value from some asset e.g. interest rates, crypto prices, etc. Futures and options are common types of derivatives that were designed to reduce risk and hedge against uncertainty. But in the wrong hands derivatives are a recipe for financial disaster. So don’t play with derivatives unless you really know what you are doing.
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How To Trade Cryptocurrencies And Other Coins
Most people mistakenly believe that the way to profit is to buy crypto as soon as it hits a high and sells it at a low. This is hardly true. While this process is highly scalable, it is not the only way to earn a profit from cryptocurrency trading. Here is a list of things to keep in mind while you are trading the highly volatile crypto. Forex trading is another way to make and scale up the profits of your cryptocurrency trade. This is essentially the process of buying and selling the currencies for another currency. And when you know how to buy and sell cryptocurrencies in forex trading, then you have just got another tool to keep up with the price movement of the cryptocurrency.
Arbitrage Between Crypto Assets
Arbitrage involves trading one cryptocurrency for another, or trading the same cryptocurrency on different exchanges. This method is preferred by people who are accustomed to day trading, and have an even higher appetite for risk than those who are simply day trading.
Being a hands-on trader reveals many imbalances in the market, and thus opportunities for profit each day.
For example, lets assume XYZ coin is priced at 10 on one exchange and at 11 on the second. A person could then buy ten XYZ coins on the first exchange at 100, transfer the coin to the second exchange, and then sell the cryptocurrency for 110.
The absolute gain would seem to be 10. However, transaction costs could eat away as much as 8 and leave investors with a profit of only 2.
This is similar to how investors play fiat currencies against each other in traditional currency markets.
There could be more complex routes, such as transferring value between three currencies on the same exchange, to end up with a larger quantity of the first currency. This is usually done when the value of newer cryptocurrencies rises or falls considerably within minutes.
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Ways To Make Money With Cryptocurrency In 2021
What are the best ways to make money with cryptocurrency in 2021? In this short guide, we are going to go through the top 5 proven ways how you can earn with cryptocurrencies today.
Surely you have seen, heard, or read about millionaires who have become rich earning and selling cryptocurrencies. For the most part, these individuals are the ones who made the breakthrough with Bitcoin in the early stages.
You may be wondering, is it still possible to make money with cryptocurrencies? The answer is yes, and here are five ways to make money with cryptocurrency in 2021.
But watch out! Trading and investing in crypto, just like trading and investing in stocks, remains very risky! Many people have just heard about cryptocurrencies and dont really know the dynamics of how everything works.
To have a crash course, and get the basic knowledge about cryptocurrencies and trading with them read our article How Do You Trade With Cryptocurrency?.
Theres No Guaranteed Future
Even if you pick the right cryptocurrency, buy at the right time and plan on getting rich over the long term, that purchase doesnt come with the promise that the coins are going to be around forever.
Even Bitcoin, which is considered the most legitimate cryptocurrency, could potentially be banned, or at least highly regulated. Treasury Secretary Janet Yellen said earlier this year that the U.S. government may need to curtail the use of Bitcoin, adding that its mainly used for illicit financing.
Investments like this are just simply running on speculation any headlines of regulation will take the wind out of their sail, Horneman says. It will cause significant volatility across the board.
Hard as it is to believe right now, investors could also lose interest in cryptocurrency. Think of AOL, which was once hailed as the king of media but has since become something of a relic. And there are plenty of other examples too, from Betamax to minicomputers.
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Buy If Mfi = 100 And If The Subsequent Candle Is Bullish
We can now wait for the third MFI reading above 100. It doesnt necessarily have to be the third MFI = 100 reading, you can take every other MFI = 100 readings. If your time doesnt allow you to catch the third 100 reading on the MFI indicator, you can simply pick the next one as long as all the other technical conditions are satisfied.
Next, we also need the candlestick when we got the MFI = 100 reading to be a bullish candle. The close of this candle needs to be near the upper end, giving us a candle with very small wicks.
This brings us to the next important thing that we need to establish when day trading cryptocurrency, which is where to place our protective stop loss and where to take profits.
How Secure Is Cryptocurrency
Cryptocurrencies are usually built using blockchain technology. Blockchain describes the way transactions are recorded into “blocks” and time stamped. It’s a fairly complex, technical process, but the result is a digital ledger of cryptocurrency transactions that’s hard for hackers to tamper with.
In addition, transactions require a two-factor authentication process. For instance, you might be asked to enter a username and password to start a transaction. Then, you might have to enter an authentication code that’s sent via text to your personal cell phone.
While securities are in place, that doesn’t mean cryptocurrencies are un-hackable. In fact, several high-dollar hacks have cost cryptocurrency startups heavily. Hackers hit Coincheck to the tune of $534 million and BitGrail for $195 million in 2018. That made them two of the biggest cryptocurrency hacks of 2018, according to Investopedia.
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