Cryptocurrency profits can be extremely lucrative, but they’re also very unpredictable and risky to invest in. There are many different strategies you can use to invest in cryptocurrency profits without taking too much risk, but there are also other ways to profit from this volatile market that don’t require any money at all—just some knowledge about how it works and how you can benefit from it. Here are 10 ways to invest in cryptocurrency profits and make the most of this wild and exciting economy!
1) Accumulating Bitcoin
If you’re interested in accumulating bitcoin profit, there are a few ways to do it. The easiest is via an exchange, such as Coinbase. If you sign up using one of Coinbase’s referral links, you get $10 of free bitcoin for buying or selling $100 worth. Just make sure you move your bitcoins off Coinbase after purchasing—the company is notorious for its unstable system. Another way is peer-to-peer marketplace LocalBitcoins.
2) Investing In Exchange Trading
Some exchanges allow you to trade cryptocurrency for other cryptocurrencies, which is an indirect way of investing in cryptocurrency profits. For example, say you have some extra Ether lying around and want to use it to buy into a new blockchain. You can purchase your Ether on Coinbase, then use that exchange’s platform (or another exchange’s platform) to buy into whichever blockchain you want. The same goes for any other digital currency—just research what exchanges are out there and find one that supports transactions in your desired currency. Some exchanges also let you sell cryptocurrencies back into dollars or other fiat currencies.
3) Holding Cryptocurrencies In Your Portfolio
If you’re interested in investing in cryptocurrency profits, it makes sense to hold some currencies as part of your portfolio. That way, if any one currency falls out of favor or becomes unstable, you can offset those losses with gains from other currencies. Obviously, we don’t know what other currencies will do and how volatile they might be, but there are always ways around that kind of problem: You can create a diverse portfolio that includes multiple cryptocurrencies (and perhaps various fiat currencies as well). If you want to take things a step further and hedge against volatility altogether, consider using hedging instruments like options and futures. Just remember that these instruments come with their own inherent risks.
4) Buying Into ICOs
This is not for everyone. But if you have lots of Bitcoin lying around, an ICO can be a great way to rake in some more cash. ICOs are similar to IPOs and crowdfunding. Like IPOs, a stake of the startup or company is sold to raise money for operations during an ICO operation. However, while IPOs deal with investors, ICOs deal with supporters that are keen on a new project much like a crowdfunding event. However, one does not necessarily have to buy a whole Bitcoin before participating as one can invest smaller amounts of fiat currency as well.
5) Mining Bitcoins
Like gold or diamonds, bitcoins exist only because people believe they have value. Like gold and diamonds, they’re hard to come by, requiring computer-driven processes called mining. Bitcoins are mined by using computing power to solve complex mathematical equations that essentially verify transactions on a digital ledger—the blockchain. The math is so complicated that it takes specialized processing chips run by teams of miners around the world working together for months on end to produce enough coins for anyone to profitably mine them. This mining process is intentionally designed to be difficult and energy intensive.
6) Trading Bitcoin Options
Options are contracts that allow you to place a bet on an asset. For example, say you think an investment is going to appreciate significantly within a given period of time—but don’t have enough cash on hand. Options give you more control over your investments because they are more flexible than buying or selling shares directly. For instance, if you owned 100 shares of stock, at current prices each share would be worth $100 and you’d have $10,000 invested.
7) Buying Bitcoin Mining Rigs
If you know how to build computers, you can build a mining rig. Mining rigs are basically high-powered computers designed specifically for mining Bitcoins. But why should you buy a mining rig when you can just use your computer? You’ll get way better returns if you use software that runs on multiple devices, so while it may be technically more expensive than buying one computer, if your investment doubles or triples, it will have paid for itself.
8) Trading Bitcoin Futures Contracts
Over-the-counter (OTC) Bitcoin futures are now available for trading on exchanges, which means you can trade Bitcoin without having to worry about price swings or holding onto your cryptocurrency. If you’re interested in trading Bitcoin futures contracts, here are 10 strategies you can use to make money trading crypto. 1. CFD Trading The vast majority of cryptocurrency buyers and sellers never actually see their digital assets. Most people don’t even have a wallet set up yet. For that reason, it’s not uncommon for people to take out loans or use credit cards just to buy into an ICO, hoping that they’ll eventually be able to pay back their debts with funds from selling their new tokens—if they can sell them at all before prices fall further.
9) Accepting Bitcoin Payments for Goods and Services
Accepting Bitcoin is a way of investing in cryptocurrency profits. In order to accept Bitcoin payments for goods and services, you’ll need a digital wallet–simply an online account that stores your cryptocurrency. You can find digital wallets for free or purchase one from a company that specializes in e-commerce and accepts payment with Bitcoin. Once you’ve got your wallet, use an app like Coinbase or Coinify to get paid for your products and services through BitPay, which essentially converts customer payments into Bitcoins and deposits them into your account. To convert these Bitcoins back into dollars (or another currency), transfer them from your digital wallet back onto an exchange such as Coinbase or CoinHako.
10) Purchasing Bitcoin Investment Trust Shares (GBTC)
GBTC is an open-ended trust that invests exclusively in Bitcoin. If you’re not familiar with GBTC, here’s a simple breakdown: it’s a way to invest directly into bitcoins without having to buy them on an exchange. Each share of GBTC costs about 1/10th of a bitcoin and represents about 0.09% of all bitcoins currently available (2,600 out of 21 million). A single share gives you ownership of approximately 0.00004% of all BTC mined so far—less than a quarter! And shares trade on a daily basis for around $225–$240. So there’s a lot more room for growth with GBTC.
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