The crypto market is exponentially growing, and, as a result, cryptocurrencies are generating a lot of interest from would-be investors. Despite its well-known volatility, many people see it as an opportunity to grow their investment portfolio.
If you are inclined to invest in cryptocurrencies, the good news is that there are numerous opportunities to earn real money with cryptocurrencies. However, before joining any crypto exchange, it is extremely important to understand what you are investing in and the opportunities for making profits.
This post covers how to get started with cryptocurrency and ways to make money. Read on to learn how to make money with cryptocurrencies.
Guide to investing in cryptocurrency
Cryptocurrency is a digital currency that solely operates on a blockchain, a digital ledger that ensures the same coin is never used twice. While many people use cryptocurrencies to pay for their purchases, it is more broadly an investment.
If you are looking to broaden your portfolio by investing in crypto, these steps and tips will be of great help:
1. Understand what you are investing in
There are literally thousands of cryptocurrencies, all functioning differently and new ones being created nearly daily. To avoid falling into some sort of trap or making significant losses, you need to understand how individual cryptocurrencies work and the investment case for each.
For the most part, cryptocurrencies are assets on their own, meaning they are not backed by any other sort of asset. You have to sell the assets at a higher price than you paid for them to make profits. The idea is to understand that there is an equal chance of making losses.
2. Focus on the future potential of cryptos
Everyone gets into the crypto market hoping to make money, but many end up quitting. But why?
Many new investors make the mistake of looking at the past and extrapolating the same to the future, which shouldn’t be the case. When investing in cryptocurrencies, you should focus on what gains you will make, which does not necessarily depend on the performance of crypto in the past. For instance, there’s no guarantee that bitcoin performance will continue into the future, so focus on how you can drive returns after investing.
A little knowledge about the past is essential, however.
3. Watch for volatility
The crypto market is one of the most volatile markets. The prices of any cryptocurrency can drop or rise very quickly. Understanding how the market generally trends and being able to predict how the prices will move can give you an edge, particularly if you can execute trades rapidly.
Before investing, you want to make sure that you can optimally leverage volatility; otherwise, it may crush your investment. Many crypto exchanges help new investors solidly grasp the market’s fundamentals from the go.
4. Learn to manage your risks
Investing in volatile assets like cryptocurrencies requires you to manage your risks. The biggest thing is to know how you can develop effective processes that keep losses minimal while increasing the chances of making profits.
Depending on how long you want to stay in the industry, you may want to set strict rules on when to trade, then adhere to just that. It is also good to beware that managing risks comes with an emotional cost.
5. Invest what you can afford to lose
Crypto trading is lucrative, but investing in cryptocurrencies carries very high risks. As such, you don’t want to put the money that you need into risky assets like cryptos.
When it comes to investing in cryptocurrencies, the thumb rule is if you can’t afford to lose it, don’t put in trading. A better way to get started with cryptocurrency investment is by working with a broker or crypto exchange platform. A reliable crypto exchange will help you secure your assets and may offer tips to leverage the volatile market.
Ways of making money with cryptocurrencies
There is no absolute best strategy for making money with crypto. What works for one investor might not be the best for another investor.
Here are strategies to consider:
• Investing - This involves buying and holding cryptocurrency coins or assets for some time and selling them when the prices are high. Despite being very volatile, cryptocurrencies tend to have enormous growth potential over the long term.
• Trading - If you can execute trades rapidly, you can benefit from the crypto market’s volatility. Trading involves leveraging short-term opportunities. However, this requires apt analytical and technical skills.
• Mining - This is one of the oldest ways to make money with cryptocurrencies. Crypto mining is profitable but requires expertise and significant upfront investment. The most exciting part is that it carries the least risk.
• Staking and lending - Best left in the hands of those experienced with the world of cryptocurrencies, staking is the technique of validating cryptocurrency transactions. It is an integral part of Proof of Work (PoW), and you get rewards comparable to the interest your credit balance attracts.
Conclusion
A good grasp of concepts around cryptocurrency is the trick to becoming successful crypto investors. Hopefully, this post educates you on some of the essential things you need to understand before investing.
If you want to go beyond being just a beginner at this or any other skill, and work toward developing a real mastery, then you are going to need a deeper and more powerful strategy. What you need is a way to hack your brain so you can develop a winning mindset.
A winning mindset is a state of mind that allows you to enter a flow state at will. You do this by programming your subconscious mind.
Believe it or not, most of what you do throughout an average day is NOT freely chosen by your normal waking consciousness even though it may seem that way. The truth is that most of what you do on a day-to-day basis is done on autopilot. An example of this would be when you’re driving your car and as you do so you get bored and begin daydreaming. Before you know it, you find yourself several miles further down the road with absolutely NO memory of having driven those last several miles.
So, who exactly was driving while your waking consciousness was in la-la land, and how exactly did you manage to avoid an accident? Your subconscious mind was in control. You already spent years programming your subconscious with how to deal with a broad range of possible driving scenarios and thus it had no trouble taking the wheel while your waking consciousness took a little break. In other words, you were able to take effective actions without having to THINK about them.
