From GamersLance we teach you how to make an Investment in Cryptocurrency (such as, for example, Bitcoin which is one of them) taking into account the Price that varies (the Value) over Time and depending on the Money you have available.
How to make money with cryptocurrencies Is it possible to make money with cryptocurrencies?
These are some of the questions that we hear most frequently and that are searched on the web by those who are approaching for the first time to this relatively new market, the cryptocurrency market.
We will not talk about what a cryptocurrency is or how it works in this article, but we will focus on the ways, some more known, some less, through which to profit from these virtual currencies.
However, before we look at the most commonly used techniques to make money with cryptocurrencies, we must make some clarifications. First of all, we are talking about a new market, an innovative reality that, being still young, has both strengths and some limitations, typical of innovations.
The advantages and disadvantages of investing in cryptocurrencies
Among the strengths is undoubtedly the capitalization that has not yet reached very high levels. In fact, although in 2017 they exceeded 900 million, the figures reached in recent years are around 300 million. it is therefore a still young market, in a growth phase and for the moment little affected by the traditional market.
Another advantage is the presence of regulatory and market gaps and loopholes that can be exploited for monetization. This is always due to the fact that it is not yet very stable and efficient.
However, it is one of the two sides of the coin: these characteristics, in fact, also determine some disadvantages, which should be taken into account when deciding to invest in cryptocurrencies.
For as we have said, laws change often and we are also talking about a volatile and fragile market where a small indiscretion on the part of an investment bank can determine a peak or fall in the value of cryptocurrencies.
Not only that, given its instability it is not a market within the reach of any investor. In order to make large profits, you must accept high risks and not everyone can afford it. There are no low-risk investments that generate large profits, if you hear this, you are probably facing a Ponzi or a scam.
If you are tempted to invest part of your savings in cryptocurrencies, it is good to rely on conservative trading strategies.
This market is suitable for those who have a high propensity to risk and a well-diversified portfolio: those who invest in medium-low risk assets can think about putting a part in the world of cryptocurrencies, or a high-risk investment.
It is not wise to think of using the entire sum available only in this economic reality, since without other lower-risk investments, the possible loss could empty your pockets of everything you own.
The 9 ways to make money in the world of cryptocurrencies
1. Holding
The trending strategy, also sympathetically called HODL, consists of buying cryptocurrencies, holding them for a period of time (running the drawer) and finally reselling them at a higher price than the purchase price.
From a more practical perspective, owning a company means materially investing in a cryptocurrency that you believe will increase in value and holding it in your wallet in the hope that it will appreciate over time.
Those who opt for this method very often buy several to diversify the basket and increase the probability of winning. Then, should you lose by selling one, there is the possibility of compensating the loss with the others.
In any case, it is recommended that less experienced investors limit themselves to buying cryptocurrencies that have already demonstrated some stability and confidence over the years.
2. Trading
By the term trading we mean a multiplicity of very short speculative operations. We are talking about a behavior contrary to that seen in the previous point, in fact, with trading we try to get the maximum profit in the shortest possible time, owning the cryptocurrency as long as necessary to win.
We will go to buy and sell even in the same day or of the same month many times a single coin to get lower profits (1-3%) but repeated.
These are micro-operations that, however, carried out consistently over time, can guarantee a high profitability.
In order to trade with the lowest risk, it is advisable to perform an in-depth technical analysis of the reference market trend, using statistically valid strategies and with a risk/return ratio that is always favorable.
Trading can be done through exchange platforms or derivative instruments.
3. Mining
The term mining means digging, or rather extracting. This technique consists in extracting virtual currency through a long and complex work that exploits the computing power of computers.
It therefore consists of buying machines that solve calculations to extract rewards from the network, or coins.
In fact, some coins are released from the network whenever computational power is available to solve particular complex calculations.
The best ways to profit from mining are twofold: the first is to directly purchase important hardware used in these calculations, obviously taking into account the maintenance price of the former and the actual reward granted by the latter. Currently this methodology tends to be inconvenient.
A second, potentially more economical, method instead provides for the rental rather than the actual purchase of the machines, thus protecting against onerous prices and possible financial loss in the event of loss of revenue. You basically join other people by investing in a mining pool.
in a mining pool. The profit is then divided among all participants.
4. Refereeing
Cryptocurrency arbitrage is the mode that allows you to earn from the price difference that is created between two or more exchanges.
To better understand, let's take an example. Suppose you buy a Bitcoin at the price of 10,000 on one Exchange and resell it on a second Exchange where Bitcoin is exchanged for 10,050, obviously the values shown are invented, but it may help you understand how arbitrage works.
There are two particular modes of cryptocurrency arbitrage: regular and triangular.
With"regular arbitrage you buy and sell the same cryptocurrency on different exchanges with a significant price difference, as in the example above.
Triangular arbitrage on the other hand, takes advantage of the price difference obtained through an intermediate coin. For example, you buy Bitcoin paying in Euros, convert Bitcoins to Ethereum, finally exchange Ethereum to Euros, for a higher value than initially invested. This technique exploits the exchange rate advantages of the various exchanges.
Arbitrage players make money through micro-transactions from one exchange platform to another by exploiting price gaps.
. Cryptocurrency arbitrage is very similar to Surebets in the betting world, to do it you need to have the right tools and have good timing.
5. Strike
The cryptocurrency strike can be seen as an alternative to mining that, however, requires the use of fewer resources.
It consists of holding funds in a cryptocurrency wallet to support the security and operations of a project or blockchain. In simpler terms, we can say that staking consists of blockchaining cryptocurrencies to receive rewards.
In most cases, you will be able to stake your coins directly from the wallet. In addition, several Exchange platforms offer staking services to their users.
The profit is considered annualized and the term varies depending on the contract signed.
6. Syndacate
These are special promotions made by the platforms to promote a cryptocurrency.
Many times there is no lack of opportunities, for example there may be some offers related to coins, which are sold at reduced prices.
There are conditions that must be accepted in order to participate and take advantage of syndacate, but the reward can be beneficial.
7. Airdrop
Similar to Syndacate, Airdrop allows you to receive free coins. What is required is the execution of small operations such as subscribing to a Telegram channel or a newsletter.
An Airdrop is nothing more than a gift from the founders of a cryptocurrency with a predominantly self-promotional purpose. Therefore, it is a marketing activity of the team to publicize the new token or cryptocurrency to the greater community. Coins can appreciate over time.
8. Fork
The term cryptocurrency fork defines itself as a modification to the original code whose purpose is the improvement of a digital currency. This allows you to generate a new version of the coin or token, keeping all the previous history.
The mechanism in question has allowed the birth of new coins with different characteristics to the original cryptocurrency.
This is a particular phase of the coin, where by certain factors it is duplicated and if you are the owner you will find yourself with two coins instead of one at two different prices. Both are immediately usable and monetizable.
9. Dark Pool
Little known and very innovative, they are an excellent tool to create interesting shows. A large capital is required to participate in a Dark Pool.
It is an alternative trading system that allows institutional investors to place anonymously, large orders without having to publicly disclose their intentions when looking for buyers or sellers.
The advantage of this tool is that investors tend to buy in blocks to avoid slippage and trigger a possible adverse price movement.
Some experienced traders use this system to gain access to inside information or to make money by arbitraging between the dark pool book and the public book.
