With gains of more than 9,000,000% since July 2010, Bitcoin was the best performing asset of the last decade.
First dubbed “magic internet money,” the leading cryptocurrency showed the way for what was possible, paving the way for numerous crypto-related projects to emerge as alternative cryptocurrencies.
There are reports about large volumes of cryptocurrencies being moved across-borders for little to no fees and without the censorship inherent with the traditional banking system.
Additionally, the last decade so the development of both retail and institutional-grade custody and investment solutions for cryptocurrencies, raising optimism about what the future holds for the industry.
At its young stage, however, there is no doubt that traders largely contribute to the growth and continued existence of cryptocurrencies.
Data from Bitcointradevolume.com as of Jan. 2, 2020 shows that the 24-hr spot volume for Bitcoin was $310,440,579, while the futures market recorded a trading volume just under $64 million.
These numbers, of course, do not include the daily trading volume for alternative cryptocurrencies (altcoins) which another less-trusted data provider, Coinmarketcap puts at $43 billion on the same day.
Why Invest Or Trade Cryptocurrencies?
The arguably unregulated nature of the cryptocurrency market, and the lack of infrastructure similar to the existing financial system, are some of the common reasons why people do not invest in or trade cryptocurrencies.
But are such reasons really valid?
Well, as noted at the onset, Bitcoin alone yielded a highly impressive long-term return, with a few other cryptocurrencies not far off.
ROI via @CoinMarketCap
Bitcoin – 5,543.52% (2013 till date)
Ethereum – 4,604.90%
XRP – 3,250.33%
Bitcoin Cash (BCH) – -64.62%
Litecoin – 884.16%
EOS – 150.54% Binance Coin (BNB) – > 9000%
BitcoinSV – 1.40%
Tezos – 230.27%
Tron (TRX) – 595.00%
— Wilfred Michael (@CryptoWilfred) December 23, 2019
Putting these numbers into perspective shows that investing or trading cryptocurrencies can be rewarding, despite their inherently risky and volatile nature. The next line of action then would be to find out how to ride the market without getting hurt, and also achieving the desired profit returns.
Basic Tactics to Invest or Trade Cryptocurrencies
- Long-term Investment (aka HODLing)
Buying to hold for the long-term and sell when prices sky-rocket remains one of the most common tactics for investing in cryptocurrencies. The above line is the perfect explanation for recent statistics which showed that 60% of all Bitcoin hasn’t moved in a year despite price growth.
Therefore, if you’re not ready to invest so much time into monitoring the industry’s growth, then it may be the best option for you.
- Day or Short Trading
If you’re not ready to wait for a long time to make profits on your crypto, then a day or short trading may be a better option for you.
You will have to learn how to trade on popular cryptocurrency exchanges using the best trading tools, with the objective of profiting from short-term price action. Also, instead of trading only Bitcoin, you can trade a variety of altcoins simultaneously.
Day traders thrive off monitoring crypto news around the project coins they’re trading, counting on positive news to sell the hype and negative news to buy the dip.
If you’re not knowledgeable about how to invest or trade cryptocurrencies, you can use a reliable broker service such as the RoyalCBank trading platform. The firm was created by experienced crypto and equity traders to help people get the best out of their investment in cryptocurrency.
RoyalCBank is a member of The Financial Commission, an international body that settles disputes concerning the online CFDs, Forex, and cryptocurrency trading.
Similar to brokerage in equity trading, using a broker for your cryptocurrency trading and investing attracts fees, although this matters for little if the end results are impressive.
- Lending or Staking
The concept of decentralized finance (DeFi) evolved with the emergence of cryptocurrencies. Hence, one can comfortably earn interest on their crypto assets via staking, using crypto staking platforms that support their desired asset.
The annual returns for such investments are usually between 6-10% APR, which is way higher than what is offered by the traditional financial system. The use of blockchain technology, also means that such investments are highly-secured, and not affected by economic situations in the region where the lender resides.
Popular cryptocurrency exchanges like Coinbase or Binance offer a staking service for one or more crypto assets.
To investing or trade cryptocurrencies do not have to be as difficult as it seems, especially given the continued development of infrastructure for onboarding new users.
The basic tactics mentioned above (hodling, short trading, and lending/staking) can easily help anyone begin to earn profit from cryptocurrencies even without expert knowledge of the industry. Also, if you’re busy with work and want to earn passive income on your crypto, then using a reliable brokerage service is a highly recommended option.
In the end, the objective is to profit in a legal way from the crypto revolution, as the industry continues to move from the cusps of the internet to mainstream adoption.