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Business

How Bitcoin and Other Cryptocurrency Investments Make Money

by Wendy Stokes March 23, 2021
by Wendy Stokes March 23, 2021

Investing in cryptocurrency is becoming very popular, and one of the main reasons for this is the inflation of the dollar and the constant printing of new fiat money. But, there’s also a group of people who invest because they don’t care about the technology behind these cryptocurrencies, so they just want to make money instead. And, then some enjoy trading.

All of these things make perfect sense, but to the new investor, this field is completely unknown and filled with dangers. In today’s article, we’ll explain how you can make money by investing in crypto, why you should consider doing it, as well as mention some of the most important things that you need to know about this ecosystem.

Without further ado, let’s dive into the content.

Source: Netokracija

Contents

  • Why Bitcoin and other cryptocurrencies are rising in price?
  • What is dollar-cost averaging? (DCA)
  • Which cryptocurrencies should beginners invest in?
  • How do I make a profit by investing in crypto?
  • How long to wait for my investment to pay off?

Why Bitcoin and other cryptocurrencies are rising in price?

Every investor, no matter the reason for investing in the project or their love for it, invests with only one goal, to earn more money after some time. A lot of investors nowadays have two or three options at most, the two most popular being either stocks or crypto. Usually, the third one is real estate.

So why someone would choose an unexplored, new ecosystem that not many people know what it is, over something that exists for a very long time? Well, the answer is simple. You don’t need a lot of money, to begin with, crypto investing, but you can indeed earn a lot after a short time if you make the right decisions and you’re patient enough.

The reason why Bitcoin and other cryptocurrencies are rising in price is that retail investors are trying to achieve financial freedom by investing while it’s still early. But, also because a lot of tech enthusiasts recognize the potential of the technology that’s being developed in the crypto sphere.

As mentioned above, some investment to make money, others invest to support the future, but it’s still money at the end of the day. So, what is the best way for a first-time type of approach?

Source: Bitcoin News

What is dollar-cost averaging? (DCA)

A lot of people know that cryptocurrencies are volatile, and even though every type of investment has risk tied to it, investing in crypto is slightly riskier. Once again, why? Well, the ecosystem is still relatively new, and a lot of people who invest in crypto don’t even understand the fundamentals of it.

But, there are ways to minimize this risk and make your investments safer. How? By using one of the most well-known strategies which is dollar-cost averaging.

Dollar-cost averaging means putting a small amount of money as an investment every week or month, so if the price ends up dropping rapidly, you’ll still buy the dips, so when it rises, you’ll be in pretty good profit. Do this instead of putting all of your savings in crypto as an investment at once. In case you don’t know where to start with investing, bitcoinprime.io is a website where you can learn more.

Source: Bitcoinist

Which cryptocurrencies should beginners invest in?

For most people, the world of crypto is just Bitcoin, but for others, there are thousands of different options. It’s recommended for everyone to do their research no matter what it is they’re planning to buy, but my advice is to stick to the most popular cryptocurrencies such as Bitcoin and Ethereum since they are the easiest ones to follow news-wise at the moment.

Until you learn how to properly deal with risk management and research the projects, you should invest in more stable currencies.

Source: DataDrivenInvestor

How do I make a profit by investing in crypto?

As said above, there are still some people who think of cryptocurrency as “imaginary money” or “digital money” that cannot be withdrawn or spent, so how exactly do you earn profit by investing? Well, the more institutional adoption we get, the easier it will be to spend these currencies, but even now, there are still a lot of ways to spend crypto. A lot of hotels, companies, and brands accept Bitcoin as a payment method worldwide, and we also keep seeing an increased number of crypto ATMs around us.

To answer your question, earning profit by investing in crypto can be done in multiple ways. One way is to sell your crypto to someone else, which is the entire point of decentralization. Another way is to go to a crypto exchange office and trade it for “real cash”, and the third way is to spend it to buy something that helps you in life. For example, Tesla will soon start to accept crypto for their cars, so if you managed to save a bit during the previous few years, you can get yourself a nice electric car that’s eco-friendly and looks good. A lot of luxurious hotels already accept crypto as well, so get yourself a nice vacation. The possibilities are endless, and it’s just a matter of time before we can buy food with crypto.

Source: Forbes

How long to wait for my investment to pay off?

This is not financial advice and you should always do your research, but when it comes to investing in crypto, a good commonly-known tip is to never sell at a losing position. Why? Because the crypto market is still very early and almost anything that you purchased, even at the top, will eventually rise back up. As for how long you should wait, unless you are planning to day trade, you should invest the money and forget about them for a few years.

Those who purchased Bitcoin in 2009 are now millionaires, and most of them didn’t even think of the money all this time. Just think about your future and what will happen ten years from now. If you are in it for the quick profit, it’s still doable, but it’s also pretty risky and you need to know what you’re doing, which unfortunately is not something that we can help you with.

All in all, investing in crypto is a very wise decision, especially in 2022 when institutions are slowly becoming to accept Bitcoin and other cryptocurrencies. Take your time and don’t rush, all this will pay off in the future.

Bitcoincrypto valuteDollarMiningtechnologyvalute
Wendy Stokes

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