We have reached that point in time when investing in cryptocurrencies is a completely viable way to make money and profit big. The cryptocurrency craze is still not over – it just disappears from time to time to return even crazier than before.
If you plan on making money with cryptocurrencies by investing, you should know that there is some ground to cover in terms of terminology and cryptocurrency market opportunities. Let’s take a look at ways to profit from a cryptocurrency investment.
Know the Game
The cryptocurrency market is a global market that never sleeps. This means that the changes, both minor and major ones, are happening on a daily basis. This information will, in many ways, affect your behavior depending on whether you go for a short or long-term investment. We will address these two types of investment in the next section.
This is why you have to do your best to know the game. The best way to make smart, i.e. profitable investments, you need to be tuned into the latest cryptocurrency news and analytics. You should also read reviews on the best cryptocurrency exchanges on the market.
While reading reviews will help you to stick with reputable and secure exchanges, staying tuned to the latest developments will enable you to react fast and ensure that your investment remains profitable.
Short Vs. Long-Term Investment
Both short and long-term investments are viable ways to make money by dabbling in the cryptocurrency market. What does short mean in this instance? It means that you can pick one or several cryptocurrencies to invest in.
The moment their price goes up on the market, you cash in on them and look for others to invest in. This requires both time and energy but is a completely viable way to make money on a daily basis.
A long-term investment in cryptocurrencies is quite the opposite. These investors put their cash in one, eventually two cryptocurrencies and forget about it. They are practically waiting for the time when their investment is multiplied by the cryptocurrency price growth before they cash in.
There is also the matter of taxes that have to be considered before you make your choice. You should know that you will have to pay tax for each transaction.
This is why at first glance long-term investing seems like a more profitable option. But at the same time, it requires more patience and given the volatile past of the cryptocurrency market, strong nerves as well.
Consider Becoming a Miner
Mining cryptocurrencies is still an option to ensure a profit, but there are several things that you have to consider. First, there are a lot of miners out there. This means that it has become difficult to make money through mining and you will need to invest in mining rigs to become a competitive miner.
What are the costs of such an operation? If you know your way with the computers, you will be able to set up your own rigs. Otherwise this will be another cost to add to your setup.
When it comes to the required hardware, the most expensive part are the graphics cards. To be a competitive miner, you will need several rigs with several expensive graphics cards in them. And in the end, there is the electricity cost.
To sum up, you will need initial investment for the required gear, and then you will have to take care of your electricity bills each month. Depending on the size of your setup, months may pass before you return the money you invested in the gear.
And there is also the question of which coin to mine. The expensive ones take a longer time and are easy to sell, while the less popular ones can be mined really quickly, but their price may be too low and you may hit a wall when you try to sell them.
Invest in Coins Before the Rotation Starts
The cryptocurrency rotation is a well-established pattern that shapes the price trends on the cryptocurrency market. In fact, coins on the market tend to perform well in cycles. In each cycle, a coin starts with the lowest price.
As the cycle closes to an end, the dominant coins reach their maximum market value. When this cycle ends, the prices of ex-dominant coins significantly drop, while the new dominant coins enter the cycle.
In order to profit from your investment, you will have to hunt for coins that are about to enter the cycle and invest in them. This is not an easy task, but once you have some experience, you will be able to identify the viable investment options.
These are the ways to ensure your profit from a cryptocurrency investment. As you can see, all these options share one thing in common – must-have knowledge on the cryptocurrency market.
This is why we encourage you to do your research before investing and to continue reading news and developments in order to not only ensure, but maximise your profits in this market.