There are two main ways to make money with cryptocurrencies : Holding and trading. Mining being a completely different animal and requiring more serious investments in time, dedication and space, I’m keeping this for a later time.
YOU GOT TO KNOW WHEN TO HOLD’EM
In a typical holding scenario, you know – or have trust – that your cryptocurrency of choice is at a low price-point, or/and will be going up in the near, or not so near, future. So you throw some money at it, and forget about it…Or not, for a while anyway. Holding hence refer to the idea of buying some cryptocurrency and sitting on it for the long run, whereas trading takes you to the front, and challenges you to bet on tendencies within a smaller time-frame, all the while looking for the maximal return. Simply put: Holding (or hoarding) is on a long term basis, while trading is short term, the sell usually being counted in a maximum of a few days to the buy.
Matter of fact, cryptocurrencies are notorious for being extremely volatile, and this is why people that love them (or just participate in them) are scotch-taped to their cellphones: it’s because the market evolves on a minute-by-minute basis, and can have massive up-or-down-swings. Now, this will tempt your regular Joe to jump out as soon as he sees a decent profit margin, but according to a number of articles, Bitcoin is expected to hit anywhere between $500 000 and $1 000 000 (that’s right – anywhere between half a million dollar per single bitcoin unit) by 2020, meaning that each passing day is history in the making. It is also generally understood that while Bitcoin is generally admitted as the king of coins, other coins present other applications – namely, the smart contract possibilities offered by the Ethereum network of Canadian Vitalik Buterin’s design, as well as the swift swoop over the microtransaction that Ripple seems to be attempting. This means yet more volatility, and more areas and reasons for specialists to speculate over and about, as Bitcoin might, just might, actually be over-evaluated, as its value may have relied more in the novelty that tickled the markets recently then in actual reality. To quote Donald Trump, who has absolutely nothing to do with this matter other then potentially having been over-evaluated himself: “We’ll see.”
TOOLS OF THE TRADE
Trading is where the magic can happen real fast. This implies that you’re equipped with a little bit of time, at least a little bit of funds to invest with, but especially, a mean will to be like a dog with a bone with these internet monies. You will become a zombie, obsessed with the bears and the bulls of a market in constant fluctuation. However, the experienced hand will generate a reasonable profit out of these activities, as the market is, matter of fact, in constant boil and turmoil.
As the markets are incredibly volatile, it is entirely possible to dream big, but be realistic:
-
- Could be a bubble (but I seriously doubt it at this point – actually I am betting that this will become as famous a sentence as the “guitar music is on the way out” that made a certain record exec famous).
- Don’t bet what you can’t lose.
- Don’t be fooled – This is a market, and who says market says sharks. Only in this case, sharks are digital, and will swim all the way into your pants, reach for your cellphone, and grab any wealth that wouldn’t’ve been adequately protected. Moral? Keep that wallet in check with proper two step authentication, or get a physical ledger.
- Sounds fishy? Swim away. Remember that shark, looking for a way into your trousers? He’ll take numerous forms, but more then anything, you won’t feel a thing, and he doesn’t have to actually steal your cellphone to steal the bitcoins – or some of your money, or worse, your identity. So yeah – keep it real.
My bottom line advice: You know your means, invest within them, and never invest something you can’t stand losing. This aside, I believe cryptocurrencies are only beginning to make ripples in our financial world, and while I applaud anyone in a better financial situation then mine, I will remind you what they all told me – to take one successful step at a time.