If you want to learn how to make money investing in cryptocurrency or bitcoin then you’re in the right place. We’re going to show you all of the trading tricks advanced traders are using to increase your income.
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Should I invest in cryptocurrency? This is the first question we asked after hearing about blockchain technology. But before to go ahead do you have an idea about, “what is cryptocurrency?” and “What is Bitcoin?” The exact mean is…
Bitcoin is a cryptocurrency. It is a decentralized digital currency without a central bank or single administrator that can be sent from user to user on the peer-to-peer bitcoin network without the need for intermediaries.
Frequent questions when we think about an investment in Bitcoin or Cryptocurency:
1. Is Bitcoin safe and legal?
2. How do I get a Bitcoin?
3. What is a Bitcoin and how does it work?
4. Can I convert Bitcoin to cash? and many others.
The answers are>>>
1. Because bitcoin is not recognized as legal tender by any government, it can only be used as payment if both parties in a transaction agree to its use as a form of payment.
2. Buy Bitcoins Online. To buy or earn free bitcoins, you first need to download a bitcoin wallet, which is software that allows you to securely send, receive, and store funds in the bitcoin network.
Buy Bitcoins in Person. If you’d rather buy bitcoins in person, you have four options to choose from:
3. Each Bitcoin is basically a computer file which is stored in a ‘digital wallet’ app on a smartphone or computer. People can send Bitcoins (or part of one) to your digital wallet, and you can send Bitcoins to other people. Every single transaction is recorded in a public list called the blockchain.
4. There are several possible ways to convert bitcoin to cash and ultimately move it to a bank account: Sell bitcoin on a cryptocurrency exchange, such as Coinbase or Kraken. This is the easiest method if you want to sell bitcoin and withdraw the resulting cash directly to a bank account. Use a bitcoin ATM.
The Key to invest on Bitcoin / Cryptocurrency..
These are the six simple ways to invest in cryptocurrency and generate a passive income. With this cryptocurrency investment strategy, you can invest a smaller amount of money and have good upside potential. Because not everyone has a lot of money to dump into the market or buy the most popular cryptocurrency & Bitcoin.
To start things off, we’re going to show you six proven ways to make money investing in crypto-currency.
How to Invest in Cryptocurrency
The best way to start is to find a cryptocurrency investment strategy that best suits your needs and goals. This crypto guide will give you an idea on the many different ways to make money with crypto-currencies.
So, how do I invest in cryptocurrency?
Cryptocurrency Investment Strategy
#1: Long-Term Investing – HODL: The same way you invest in the stock market you can invest in bitcoin and other alt coins. Most cryptocurrency traders embrace a HODL mentality. They hold a coin for the long-term for the potential of profiting from the rise in price.
HODL has become one of the main staples of the cryptocurrency slang.
When you HODL a coin it means that you believe in it and holding on to it for dear life. You want to the cryptocurrency you’re invested in to have success when hodl-ing.
Long-term investing in cryptocurrency works amazingly well.
But, how do you invest in cryptocurrency in a bear market?
The key is to diversify your investment strategy.
#2: Passive Income from Dividend Payouts: Passive income is defined as a source of income collected on a regular basis that requires no maintenance. The traditional dividend payouts received from holding stocks is a source of passive income.
Not many traders know that you can actually earn dividends from some cryptocurrencies as well.
There are some coins like NEO coin or VeChain cryptocurrency that pay dividends anywhere between 5% to 10% per annum. The dividend payout is received in cryptocurrency. You have the potential to compound those profits if the coin price goes up over time.
If you think about it, that’s more than the 2-3% per annum interest rate offered by your local bank.
If you really want to diversify your cryptocurrency portfolio, consider including cryptocurrency that pays dividends in your crypto portfolio.
Let’s explore other ways to make money with crypto.
#3: Arbitrage: In simple terms, arbitrage is buying something for a low price and selling it at a higher price in a different place. You might not know this, but you probably have engaged in arbitrage when you have bought something cheaper so that you can sell it later at a higher price.
A lot of people do it and want to be able to do bitcoin arbitrage. It’s probably the fastest way to make money.
If you go from one exchange and see a coin listed for one particular price and then look at another exchange, you’ll see a difference in price. In this instance, you’ll want to buy the coin on the cheaper exchange.
Transfer the crypto from one wallet to another. Sell it on the other exchange where the coin is trading at a higher price.
You have to be quick, and you have to be sure there’s a fair profit margin. Otherwise, it’s not actually worth to do arbitrage trading bitcoin.
#4: Airdrops: In simple terms, Airdrops gives you the ability to earn free coins. Airdrops are when a blockchain project distributes free coins or tokens to the crypto currency community.
The nice part about an Airdrop is that you’re getting free coins without any investment. However, there is a caveat with that because usually to receive the airdrop you normally have to own a specific token already.
In the crypto community space, Airdrops are also known as crypto freebies.
The main purpose behind an Airdrop is to distribute crypto assets to people so that they start using them.
Let’s now explore what is the other best way to invest in cryptocurrency.
#5: Mining: Read this step-by-step mining guide and you’ll not have any questions about how to mine bitcoins. For the purpose of this article, we’re going to look into how bitcoin mining works.
So, what is bitcoin mining?
Every bitcoin transaction that happens between two users must be authorized before added on the public ledger aka the blockchain. The blockchain keeps a record of all transactions made with bitcoins. These transactions are approved by computers that are connected to the blockchain.
These computers need to use their power to calculate complicated equations. These equations are complicated even for the most powerful computers not just for the human brain.
As more bitcoins are created the difficulty of these equations will increase. The computers who successfully resolve these equations are rewarded with bitcoins.
In other words, mining is the process of creating new bitcoins in the case of your trying to mine bitcoin. Usually, each cryptocurrency has a finite number of coins. For example, Bitcoin coin supply is 21 million. The last bitcoin is expected to be mined around the year 2140.
There are countless more coins that you can mine so there is still time to get in on the mining frenzy if you wish.
Let’s explore another best way to invest in cryptocurrency.
#6: Take Advantage of Hard Forks: We’re going to use Bitcoin as the primary example, but all the concepts explained in this section can apply to other cryptocurrencies as well.
The hard fork is critical for the development of blockchain technology. Every blockchain project needs constant updates to increase its performance. If there is not a consensus among Bitcoin users on how those updates to look like, Bitcoin blockchain has split in two.
That split is called a Fork.
When Bitcoin fork happened and Bitcoin Cash was created, for everyone Bitcoin in your wallet you will get automatically one Bitcoin Cash.
The only thing you need to do is to actually own that cryptocurrency that goes through a hard fork.
CONCLUSION: The cryptocurrency market is highly volatile therefore; you need a profitable cryptocurrency investment strategy to help you make money. Despite the headwinds we saw in the crypto market in 2018, blockchain technology still has tremendous potential.
These are just a few ways on how to make money investing in cryptocurrency.
Try them and see where it leads!
We personally use some of these cryptocurrency strategies to book some profits. However, we recommend doing your own due diligence because, in a decentralized space such as the crypto market, there are lots of scams that look to steal your money. Also, make sure to check out this article on the best cryptocurrency investment.
What is Bitcoin?
Generally speaking, bitcoin is a cryptocurrency used by online firms and big businesses worldwide. One of the biggest advantages of bitcoin is that the currency can cross borders easily — facilitating international trade.
For the purposes of investing, bitcoin is similar to any other currency (or commodity) investment. This means, when it comes to your investment return, bitcoin faces the same uphill battle as investing in:
- agricultural products
- fine art
In other words, at any given time, bitcoin is worth whatever the market says it’s worth. While this isn’t a problem in itself, investing in bitcoin does pose some specific challenges. As sexy as investing in bitcoin sounds — and despite the recent run-up in price — there are at least two fundamental problems with investing in bitcoin right now:
PROBLEM #1: YOU LOSE MONEY AFTER INFLATION (NEGATIVE REAL RETURNS)
When you invest in bitcoin (or gold, or oil, or other commodities, or any other currency, or fine art), you are betting the farm on price appreciation alone. Or rather, you’re betting that the price of bitcoin will go up compared with the U.S. dollar. What this means is, bitcoin is different from more conventional investments like stocks, bonds and real estate. That’s because conventional investments offer the chance to generate cash.
PROBLEM #2: MEAN REVERSION
Mean reversion is a fancy way of saying: What goes up, must come down — and vice versa.
All investments are subject to mean reversion, and bitcoin is no exception. Mean reversion itself isn’t a bad thing, but it’s still worth noting when it comes to investing in bitcoin, specifically.
As mentioned and shown in the graph above, commodities provide an investment return at just about the rate of inflation — before fees. Moreover, commodities depend upon price appreciation alone to provide an investment return. This is because commodities do not generate cash.
So, if you are going to get an investment return from bitcoin, you don’t want to be buying at a market top. However, recent run-ups in price suggest that it’s possible we are at the top of the bitcoin market — or, at least on the way.