You cannot lose if you know how to play the game well! The reference is to cryptocurrency trading. Only then, will you be able to garner healthy profits. Therefore, try the following five methods outlined below. Click here for more essential cryptocurrency tips.
1. Buying the Dip
To begin with, choose what crypto assets you wish to own. Next, obtain them from a reputed cryptocurrency exchange. Add to them, whenever prices lower. This is Buying the Dip.
Continue accumulating, and be patient. When the time is right, sell the lot. The profit margin will be splendid. Thus, your long-term investment pays off handsomely!
Before you venture into Buying the Dip, peruse the whitepapers regarding each coin. Store knowledge about every coin’s origin and what purpose it serves. Can it stand the test of time? For instance, Bitcoin, Litecoin, Ethereum, etc., generally remain steady in popularity. Newer ones begin with a hype, and rise. However, they lose value soon, and recover very late. They even disappear altogether, because no one wants them.
2. Lending/Borrowing
You are aware that money lending is a highly profitable business. Well, you can become a crypto lender! However, you must have sufficient piles of diverse cryptos for it.
Sign up with various crypto exchanges that support lending. They include Oasis, SALT, Celsius, Nexo, etc.
Lending and borrowing go through via legal contracts. The borrower is an individual. You may not lend to banks or organizations.
A borrower must provide collateral. He/she does so by pledging his/her store of digital currencies. As a lender, you outline your terms. You may render help in the form of other cryptocurrencies, or cash. Generally, borrowers prefer digital currencies.
Until the loan is cleared, the borrower must pay a monthly interest to the lender. The interest takes the form of additional crypto assets.
While everything sounds fine on paper, be cautious. Find legitimate platforms and dependable borrowers.
3. Trading
It refers to taking advantage of short-term opportunities.
Here, you may purchase/sell. It all depends upon the rise and fall of digital currency prices. It also depends upon possessing and using appropriate analytical and technical skills. Only then, will you be able to make accurate predictions about a volatile cryptocurrency marketplace.
Use the following strategies.
- Make a practice of looking out for technical indicators. Technical analysis gives justification for every one of your trades.
- Keep up-to-date with the latest on crypto operations in global marketplaces.
- Opt for a well-known cryptocurrency exchange. It must also offer low fees. This way, your trading costs will lessen.
- Adjust your trading times to your schedule.
- Use the strategy of stop-loss orders on each one of your deals. Adhere to a profit-loss ratio of 2:1.
- Opt for a combination of digital currencies, for reducing risk. Diversifying trade is always profitable.
4. Dividends
It is akin to earning on the stock market, or via bonds. Every company has some shareholders. In other words, they are part owners of the establishment. Therefore, they are entitled to a share in the profits. The company distributes the overall profits for the year, amongst all the shareholders. The company itself is a shareholder too.
The same thing happens with cryptos. However, you must have a healthy balance in your cryptocurrency account, to begin with. Furthermore, investigate the dividends marketplace thoroughly. Which coins pay them, and are they worth it?
Note that you receive additional tokens as your share, not cash. Explore Decred, VeChain, NAVCoin, NEO, etc.
5. Airdrops
It is too risky for a novice. It is adventurous for an experienced trader. Therefore, only go ahead if you have the requisite confidence.
The Airdrops project is connected to developers of new digital currencies. They want support from people like you. Therefore, they offer them for free, for you to adopt.
You will know when such a project is underway. Users of these cryptos promote them on the concerned developer’s website. They also publicize on social media, and crypto news platforms.
Do be careful about fake coins, and frauds. Note that Airdrops are taxable. Therefore, whenever you undertake a transaction with a digital wallet, you must report it. The date of transaction, and the fair price of the crypto on that date, should go onto the distributed ledger.
