If you’ve been living under a rock, the hottest trend in online investing is Cryptocurrency to make money. The value of coins like Bitcoin and Ethereum have risen hundreds of percent since last year, with investors scrambling to get hold of them. But the market is volatile and unpredictable, which can lead to big profits or horrible losses. So, how do you invest with the confidence that you’ll come out ahead?
First things first, let’s get up to speed with what we mean by Cryptocurrency. Cryptocurrency is digital money that cuts out banks as an intermediary. Instead of directly debiting a bank account or credit card, cryptocurrency purchases go straight from your digital wallet to the token owner’s digital wallet. The currencies are traded through online exchanges, and the tokens can be used for anything that regular money can be used for.
Cryptocurrency is in its infancy, and some experts argue whether it should even be considered a currency. And while Bitcoin and Ethereum have been around for a few years, the rest of the coins are still new and trading at low prices that may be inflated due to speculation. Say you’ve bought a bunch of coins at $1 that jumps to $10 each. You could be sitting on massive profits, but it’s not guaranteed that they will rise any higher, and you could lose everything if the market crashes. So it’s important to be careful.
Some people believe that buying and holding is the best way to make money
Buying and holding refer to obtaining the crypto and then holding onto it in hopes that the prices skyrocket. If you bought a thousand dollars worth of bitcoin when it was in its infancy, you’d have a ton of money right now. The same is truth with many other cryptocurrencies. The problem is, some people can’t hold onto their investments and either panic or want to profit off their good fortune immediately instead of waiting.
Day trading with crypto is possible but risky
There are cryptocurrency day traders out there. They buy and sell cryptocurrencies quickly without ever holding onto them for long. How long do they hold onto the crypto? Well, that depends on what the market does. A day trader may buy a large sum of a particular crypto and only hold it for hours or maybe a day or two. The length of time the crypto is held for is only determined by when the investor thinks the price is going to go up.
Bitcoin is the most popular, but there are other cryptocurrencies out there
Bitcoin and Ethereum are the two most popular cryptos, but they’re by no means the only two. You can invest in a plethora of cryptocurrencies, but buyer beware. Some cryptos aren’t worth anything, and they probably never will be. Always do your homework before investing and make sure what you’re putting your money into is stable.
Crypto is here to stay, and there’s a ton of money to be made from it
Many people are skeptical of cryptos, but they’ll be hard-pressed to find fault with the numbers. As they become more commonplace, investors will dump their money into them as a viable means of creating a profit. But the market is new, and the opportunity to really make money is still there if you know how to do it. Invest wisely and prepare yourself for a volatile market if you pursue crypto investing.