Cryptocurrency can be confusing to newcomers.
It can also bring a lot of money if you know what you’re doing.
This post will help answer any questions you may have about cryptocurrency and whether or not it can make you rich.
Cryptocurrency can actually make you rich if you know what you’re doing. Simply by investing in some of the best cryptos when they’re low and sell off when they are rise. The idea involved in profiting from cryptos is: buy low, sell high.
Let’s start by defining cryptocurrency and how it can make you rich.
What is Cryptocurrency?
Cryptocurrency is a virtual currency that can be used for transactions without any third parties involved such as banks or credit card companies.
Cryptocurrencies can also have an intrinsic value because people can buy them, sell them on exchanges like stocks, hold onto them until they appreciate in value, or use them to create more coins through mining.
Cryptos are an entirely decentralized form of currency, which means they can be traded without any centralized authority such as a bank or government to regulate them.
Cryptocurrencies allow people who don’t know each other and live in different countries to make transactions as long they have internet access.
Crypto can also provide privacy for individuals due to the nature of blockchain technology that is used with these currencies.
Blockchain prevents outsiders from viewing your purchase history so you can buy something online privately through cryptocurrency if you want to do so anonymously.
Some cryptocurrencies are more private than others.
But Bitcoin provides anonymity by hiding individual wallet addresses on public ledgers while still allowing users’ trades to go through publicly like cash.
How then can cryptocurrency make me rich?
Well, lets take a look at 5 ways cryptocurrency can make you rich:
7 Ways Cryptocurrency Can Make You Rich:
1). Buying and Hodling for Long Period
This is the simplest and easiest way to make money with cryptocurrency.
But it does require patience as well as an understanding of basic trading principles.
The key here is that you need to buy low and sell high – a strategy far too many beginners overlook or fail to execute properly.
Buying Bitcoin, Etheruem and other top coins can be a great long-term investment if you are willing to take on some short-term volatility in order for those gains down the road to get bigger (as they should).
Buying and holding for a very long time is what I and other experts highly recommend to beginners without any crypto knowledge.
This way, you can make a lot of money without even knowing how to trade.
But you need the gift of patience.
You can hodl for as little as 6 months or as long as 10 years. Imagine those that got early into the train of bitcoin 10 years ago?
Just make sure, you do your own research and make sure the crypto assets you’re buying really do have use cases in some way and backed by credible teams.
For this type of longer holding of coins make sure you get a hardware wallet to store your cryptos.
Much safer and better than online software wallets.
I recommend Trezor hardware wallet for this.
My favorite exchanges for buying long term cryptos are:
- Coinbase
- Binance
- Kraken
2). Trading Cryptos
Another way to really make crazy money and become rich with crypto is by trading them.
This can take time and can be a bit tricky, but you can still make amazing profits with this.
This is my favorite way of making money with crypto right now because I can monitor the markets for hours on end without having to watch every single trade go by.
You can just use automated trading bots or other automated programs that will do most of the trades for you while you’re away from your computer.
Some people may not like it though as they have no idea what’s going on behind the scenes when they buy using these methods versus doing all their own trades themselves which takes more time in some cases.
The types of cryptocurrency trading are:
- day trading
- swing trading
- position trades
Day Trading can be done by buying and selling cryptocurrencies quickly within a single day.
This can make the most money.
But it also has the highest risk involved. A trader can lose everything in one trade if they don’t have this planned out well enough ahead of time or understand what is going on when they’re doing their trades.
Swing Trading can be defined as making longer-term investments over weeks instead of minutes to hours like day trading which can pay off more often than not.
But doesn’t always work for everyone every single time.
So there are still some risks involved with this type of trading just like any other form that people do use cryptocurrency coins and tokens these days.
Finally, position trading is the type of investing that can be considered to be the least risky.
Because it involves owning a certain asset for an extended period of time, which can really reap the benefits when it comes to things like cryptocurrencies. It is much similar to buying and holding for a long time.
Five awesome platforms I recommend for trading are:
- CexIO
- Coinbase Pro
- Binance
- KuCoin
- eToro
3). Earn Cryptocurrency Dividends
You can also earn cryptocurrency dividends.
This is an easy way to make money from crypto because all you have to do is buy a piece of the digital currency and hold onto it for a specific amount of time before selling some or all your coins when they can be bought back at a higher price on its value.
The good thing about this method as opposed to investing in tokens which can take years, months, weeks, days, even minutes depending on how long you want them to last then cashing out – is that these dividend payments can come in much quicker than any other type of investment.
You can set up monthly deposits into your account with many exchanges where they’ll automatically deposit small percentages (usually fractions) every day until the entire profit has been given to you.
4). Stake Cryptos
Staking cryptocurrencies can be a great way to make huge money, but can also be risky.
It can work like any other type of investment or it can depend on how the project is being executed and what kind of future they are projecting for themselves in the digital world.
Staking cryptocurrencies can come with many benefits:
You will receive monthly payments based on your stake size until you choose to sell some or all your coins back at the current market price.
You can receive many more coins of your stake type by staking, unlike a traditional investment.
Stakeholders can earn interest on their own investments and can even secure voting rights from the company they are investing in.
There can be downsides to this process as well though:
The price for these cryptocurrencies can fluctuate just like any other cryptocurrency, meaning that you will need to make sure that what you’re getting is worth it if volatility gets too high.
The success or failure of the project all depends on how strong their team is behind them and whether or not there are enough people willing to invest in it.
There have been projects where one person was able to dominate an entire blockchain network through their own stake.
5). Crypto Arbitrage
With crypto arbitrage, investors can earn money by investing in both the fiat and crypto markets. And also get rich.
Basically, arbitrage is a trading strategy that can be used to create profits from price discrepancies on an asset pair traded at different prices across geographically separated markets or exchanges.
Crypto traders can take advantage of these differences between prices and increase their gains if they are able to buy low and sell high simultaneously on each market.
Without any significant slippage (costs incurred when executing a trade).
This requires some technical knowledge as well as access to multiple exchanges.
So not everyone will have the means for this type of investment which can make it difficult for those with limited resources but who still want to try out earning extra income through cryptocurrency investments.
6). Crypto Mining
You can make a hell of a lot of money mining crypto coins or tokens
Cryptocurrency mining basically involves using powerful computers and software to solve complex mathematical problems.
The solutions can then be used as encryption keys that can provide access to a new bitcoin or any other type of cryptocurrency in the system.
Crypto mining can be either from home on your own computer, buying shares of equipment providers like Genesis Mining who offers cloud-based crypto mining services.
Or even purchasing an already built dedicated miner unit if you want complete control over all aspects of the process while cutting out potential middlemen fees.
Mining has been profitable for many people but it can take time (sometimes years) before recouping costs depending on how much electricity is being generated by the machines at a given time so this strategy may not work well with everyone’s budgets.
In mining cryptos, just make sure that the ROI can be calculated in a reasonable amount of time before investing.
Mining requires a lot of hardware and can be very expensive.
The best approach with mining is to try it out a little bit first, see if the ROI ratio works for you, then invest more heavily in gear when you’ve seen some success that can justify the expense.
And please always do your research before investing in any cryptocurrency or related equipment.
7). Accepting Cryptocurrency as payment
The idea of accepting crypto as a form of payment in your business to make money and become profitable via crypto is that you can cut out the middleman (such as a credit card company) and charge a lower transaction fee.
Right?
The main difference between accepting cryptocurrency vs traditional methods is having an understanding of how volatility plays into this equation since at times one can make more money on their profit via crypto than fiat currency while other times it could work in reverse and cost.
But looking at the direction things are going, it can be a wise decision to accept cryptocurrency while it’s still at its infant.
Because as the market value goes up, so does your entire crypto portfolio.
Imagine accepting Bitcoin, Ethereum, or any other coins as a form of payment now. And they all rise by a certain % in months or even years to come.
While the authorities and the Central banks keep printing more paper money – devaluing it. Which may lead to inflation.
Who’d be benefiting?
What’s Next Now?
The thing is this:
Cryptocurrency can make you rich overnight if you’re very skilled with monitoring and understanding the ever-changing market changes and movements in prices and values of crypto coins and tokens.
And also being aware and updated of the latest coin projects – investing in them earlier on before the public catches up.
Smartly investing and trading cryptocurrency make you rich and it can as well get you rekt or ruined. You just need to be very careful and canny.
So to recap, if you’re going to invest in cryptocurrency:
- Know what it is that you’re investing in:
The history of the coin or token, its goals, and the fundamental technology behind it.
- Be aware of scams or schemes out there since they can take advantage just as much as they can benefit your wallet:
This means being mindful about how these coins are traded such that nobody gets ripped off because some scammers might try to fool you into thinking that they can get you much higher returns for a little bit of work.
- Understand the risks involved, and ensure that you can live with them:
For example, if investing in cryptocurrency means taking on a lot of risks then it might not be worth your time to invest.
You can’t make money when you’re constantly looking over your shoulder because something bad will happen at any moment.
- Take time to research before attempting an investment or buy/sell trade:
Don’t do anything too spur-of-the-minute as this can often lead to mistakes and losses.
Don’t give in to FOMO (fear of missing out), since you could end up losing more than just some cash.
- Don’t keep or store your coins on exchanges for too long:
This is because exchanges can be hacked and you can lose your money. Store your short-term coins on software wallets (TrustWallet) and long-term coins on hardware wallets (Trezor).
- Research is your best friend:
Research what kind of investment strategy suits your needs best, then put together a list of coins that fit those criteria: some people prefer long term; others like short term trading strategies.
Conclusion – Wrap up!
There are a lot of reasons to invest in cryptocurrency.
If you can afford it, and feel like the risk is worth it, then go for it. But if not, there’s no need to worry.
There are plenty of other ways to make money. And as long as people want something new that they can’t have or can’t create themselves, we’ll always find someone willing to give them what they’re looking for at a price point that makes sense.
Again…
Here are ways cryptocurrency can make you rich:
- Buying and Hodling for Long Period
- Trading Cryptos
- Earn Cryptocurrency Dividends
- Stake Cryptos
- Crypto Arbitrage
- Crypto Mining
- Accepting Cryptocurrency as payment
