In recent years, the world of cryptocurrencies has experienced tremendous growth in popularity and awareness. More…
How to make money with cryptocurrency? How to become rich by investing in crypto?
We are sure this question has crossed your mind many times. We all hear of ordinary people who became crypto millionaires because of unique circumstances. However, most of us still can’t wrap our heads around the fact that they became rich by investing in crypto.
Indeed, it sounds incredible to hear about the journey of people who got rich because of cryptocurrency. It is even more inspiring to learn how they continued investing in cryptocurrency and building wealth.
In this post, we aim to answer that often-asked question and hopefully, give you practical tips on how you can make the most out of your assets such as Bitcoin.
First, an answer to this question.
Can You Make Money with Cryptocurrency?
Yes. You can build wealth through your cryptocurrency. However, we’ll break it down in the early part of our blog post. What matters most is not the kind of cryptocurrencies you invest in, how much you invested, or how often you track the crypto market.
The biggest factor in becoming rich through cryptocurrency depends on YOU.
Those Internet stories you’ve read about people becoming Bitcoin or crypto millionaires very quickly should be taken with a grain of salt. People who join the crypto space know well that investments don’t gain triple value after 24 hours. It is very rare to hit those lucky chances.
So, How to Get Rich with Crypto?
Investing in Cryptocurrencies
The first method is investing in cryptocurrencies. But, you should formulate your investment strategy that involves both traditional financial assets and cryptocurrency. If you aim for long-term guaranteed returns with digital currency, you have to balance your portfolio. Balancing your portfolio will depend on your goals, risk tolerance, and age.
Financial advisers recommend investors in their 20s and 30s add 3 to 5 percent of crypto assets in their investment. While clients who are looking to form their retirement nest egg are advised to stay within a 1%-2% allocation of cryptocurrency investments.
Second, you need to figure out what other methods of earning cryptocurrency you are comfortable with. There are several ways:
Trading cryptocurrencies is fitting for those who are looking to make the most of crypto’s volatility. A crypto coin’s price can go up or down at any time of the day. This means you can make money from its upswings. But, you should safeguard yourself from losses that come with sudden price drops.
Another way you can earn from cryptocurrencies is staking. The proof of stake consensus mechanism is an alternative method to proof of work in validating transactions taking place in a blockchain. When you stake crypto coins, you can’t spend them.
Through your coins, you can authenticate transactions which help you earn rewards from the POS network. The more coins you stake, the higher your chances you will be chosen as a validator. Think of your rewards as the interest you earn at the bank for your credit balance.
Investing, trading, and staking are the three most popular ways of boosting your income and helping you become rich. Still, there are lesser-known alternatives to making money using cryptocurrency.
Alternative Ways to Get Rich with Crypto
Lending cryptocurrencies is slowly becoming popular because of decentralized finance and the invention of smart contracts. Joining cryptocurrency exchanges such as BlockFi and Oasis will allow you to participate in peer-to-peer lending or borrowing of money.
Crypto lending is a progressive form of loan because the participants deal with each other directly and the collateral comes from the cryptocurrencies involved in the loans.
Day trading of cryptocurrencies means that you buy and sell cryptocurrencies on the same day and then try to gain profit from it. Similar to crypto lending, you can day trade crypto coins on exchanges.
You can also make use of trading platforms. But make sure you subscribe to a site that legit day traders use. Otherwise, you might get scammed by a trading bot.
Lastly, make the most out of airdrops so you can get free coins. Airdrop is an event for crypto start-ups where they send tokens to investors for free. Sometimes, they ask for promotions on social media pages. This is to draw attention and make investors put their money into the start-up’s crypto idea.
If you receive coins from an airdrop, you can use them to buy, invest, or trade.
Creativity is also important if you want to build riches using crypto. Always be alert for income opportunities that may arise at any time.
Top Cryptos That Could Make You Rich in 2023
The first answer you should expect is, Bitcoin. Bitcoin has been in circulation for almost 11 years now. Many investors still see it as one of the crypto coins that guarantee the best profits.
Next is Ethereum. They have been making waves with their blockchain technology and focus on developing decentralized finance services and products so that their clients have more options for investments.
Finally, you can also look into Cardano. This is one of the excellent-performing altcoins because of its excellent security. They also boast of their blockchain technology that mathematicians and cryptographers developed in a highly mathematical and scientific way.
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Mistakes New Crypto Investors Make
Not doing your own research.
This is the downfall of many new investors. They dive in head first into cryptocurrency investing. There is a lot to learn about cryptocurrency. Take time to familiarize yourself with the basics before spending your hard-earned money.
Forgetting to map out your investment strategy.
It is crucial that you have already identified your short-term and long-term investment goals. Without those, you will just be investing aimlessly and you are prone to lose more instead of earning more.
Trusting the trend and the hype.
Be careful that you don’t get carried away by celebrity endorsements or the Youtube streamers that you watch. Furthermore, guard yourself against FOMO (Fear Of Missing Out). This can cause you to decide irrationally and make choices that will bring down your investment.
Summary of How to Make Money with Cryptocurrency
It is truly possible that your cryptocurrency can make you rich. But, you need to be patient and committed. Don’t expect high returns right away and anticipate a bumpy ride as you find out what crypto investment strategy is best for you.
Take time to read the whitepapers of new crypto companies. Learn more about their vision and mechanism. This is one of the best ways to ensure that you don’t get scammed. Also, it pays to analyze market charts before putting your money on a certain exchange or broker.
Go for the gold CryptoCoin Believers! Think wise and think twice.