The cryptocurrency market can change significantly. That’s why a trader:
- Need to follow the trends in the cryptocurrency market.
- You need to buy cryptocurrency when it starts to grow. By doing so, you invest in promising assets.
- Keep an eye on the cryptocurrency market.
- Sell assets before they start to fall in value.
Making professional trades, you can earn 10-20% daily to your capital. In certain situations, a trader is able to make 200-300% profit per month. Some cryptocurrencies begin to grow rapidly.
However, there are nuances in this business. There is a risk of losing your money, because the trend in the market may not be what you expected. That’s why you should be cautious when trading.
What recommendations should you follow?
- First, learn the basics of trading and only then start trading.
- Learn how to buy cryptocurrency on the platform you are interested in, including payment methods and countries of service.
- Make your transactions on a reliable platform.
- Be especially careful when dealing with exchangers and individuals.
- Start trading with small amounts of money and gradually increase them.
- Choose your cryptocurrency carefully.
- Be especially careful when trading with leverage.
When trading, it is better to use your own funds, which you are not afraid of losing. You can also use credit, but you need to be well aware of the risk.
How to earn on cryptocurrency from scratch
Common ways to make money include:
- Cryptocurrency trading. To make money from cryptocurrency, the option of trading is suitable. You buy and sell bitcoin (or other digital money), making a profit through rate fluctuations.
- Mining – the essence of this method comes down to the processing of cryptocurrency transfers made between users. A miner gets paid for this work, and it does not require any special efforts from him. The processing of transactions is done by a computer and special equipment. The following advantages are characteristic of mining: high payback only if expensive equipment is available; long time costs; getting goods with high liquidity;
- Stacking – This is a kind of analog of a cash deposit, but in this case you open an account in cryptocurrency. Stacking is very similar to a bank deposit. Only the level of profitability here is much higher. The amount of monthly profit can reach 3%. To do this, it is enough to transfer cryptocurrency to a special exchange account. Since the exchange seeks to increase its capital in every way, it is ready to share part of this profit with you.
As a result, the user gets a good source of passive income, which becomes a serious plus. Also, unlike mining, you do not need to buy special equipment. Of course, there are some disadvantages to stealing. The yield is minimal for the crypto market. In addition, there are risks of closing the exchange, which deprives you of your money;
- ICO – the name ICO (Initial Coin Offering) does not accurately reflect the essence of the process. Coins are not issued, so it is more appropriate to talk about tokens – the unit of information storage. It is tokens that are issued to the exchange, and only then the cryptocurrency itself appears. This approach was invented to avoid some legislative difficulties. Buying tokens, you can count on the fact that they will rise in value. You can also use tokens to perform transactions within the system. For example, you pay for the products of the company that issues these coins.
- Affiliate programs. This is a fairly simple way to generate income, rapidly gaining popularity. There are a large number of affiliate programs – almost all major crypto-exchanges and crypto-exchanges have their own program. All you have to do is register with one (or several) of them. Provide your cryptocurrency wallet address and generate a link that will take the user to the desired site. If the person who follows your referral link will do some action, you will get a percentage in bitcoins. Some affiliate programs may even charge you for the link itself.
- Landing. Lending is lending cryptocurrency assets at an agreed-upon interest rate. An investor can lend digital currency to both cryptocurrency exchanges so that they have the ability to increase the liquidity of the asset, as well as individuals. The main advantage of cryptocurrency lending is the opportunity to passively earn a good amount of money, which you cannot get if you put = money in the bank on deposit.
Pros and cons of making money from cryptocurrency
Cryptocurrency is becoming a very popular resource for investment, in various sources we see pluses on how to use it to make money. In fact, there are also negative sides to this process. Therefore, we have highlighted the positive and negative aspects of cryptocurrency, which any novice investor should know.
Positive aspects of making money from cryptocurrency
The positives of working with cryptocurrency relate to both its issue and the process of conducting transactions of various kinds. We have highlighted the following positive features of cryptocurrency, which are as follows:
- Degree of security. Cryptocurrency has a much higher security factor than conventional currency.
- Transaction amounts.
- Access to creation. Everyone has the ability to issue their own cryptocurrency. Of course, it is not the fact that it will be popular among investors. But the right approach to this tool will help provide yourself with a stable income;
- No inflation. Cryptocurrency can be issued indefinitely, as it has no high point.
- Privacy of personal data. To transfer any amount in cryptocurrency format, you do not need to share personal information with banks or with the person who will receive funds from you.
These are the main advantages of working with cryptocurrency. And they concern not only bitcoin or other popular counterparts, but all cryptocurrency.
The negative aspects of making money from cryptocurrency
Although cryptocurrency has a large number of pluses and positive features, any user who wants to make money from cryptocurrency will have to face some disadvantages of this process. They look like this:
- There is no way to get back the lost funds. If the user transfers any amount of cryptocurrency to the wrong account, there is no way to get these funds back. This can only be done if the person to whom the funds came returns them to the sender’s account;
- There is no legal regulation.
- There is a higher risk of losing money. Since all funds are stored on the user’s wallet, which is on the Internet, the biggest problem becomes the forgotten password of one’s wallet. In such a case, it will be incredibly difficult to get the cryptocurrency back;
- No control by banks. Banks are not in charge of controlling your funds, and only the digital encryption and the wallet holder are responsible for their safety;
- Rapidly changing rates. We’ve all seen the news that cryptocurrency rate changes over the course of a day can be several thousand dollars.
How to transfer cryptocurrency to other users?
Which cryptocurrencies are the most reliable?