Market Assessment of the Current Crypto Boom
As Bitcoin has soared above $50,000 for the first time in history, crypto continues to be a buzzword around the globe. The future of crypto is looking as bright as ever as we see enterprises, institutions, and individuals alike continuing to flock to invest. Although the market ever-changing, it is safe to say that investing in crypto could potentially have large payoffs in the long run. There are plenty of ways to make money off of this crypto boom, but we put together our favorite 4, both big and small, to help you capitalize on its current growth.
1. Buying and HODLing
Buying and holding Bitcoin is likely the most straightforward and most beginner-friendly trading strategies out there. All you need to do is get a Bitcoin wallet, buy BTC or another token, and then hope that the price spikes in the future. The tricky part of HODLing is this could take weeks, months, or even years into the future to hit a spike or decide to sell.
2. Trading
If HODLing is long-term investing, trading Bitcoin or other tokens is its fast-paced counterpart. There are several types of “trading” within the crypto space, but its essence is around taking advantage of Bitcoin’s highly volatile nature. This method requires knowledge of the market and practice, so be sure to do some research before you dive right in.
Here are a few styles of trading to get you started:
Day trading — Day trading is a series of short and quick trades throughout the day, allowing individuals to make small profits over and over. Day traders typically won’t hold any open positions overnight, so the method consists of carefully analyzing the market, seeing an opportunity for small profits, and capitalizing on it to make money. At the end of the day, the small profits add up and could have a significant cumulative gain.
Swing trading — Swing trading is an ideal middle ground for people who want faster returns than HODLing, but don’t quite want the time commitment of day trading. Like HODLers, swing traders will buy at a low price and wait until their holding increase in price to sell high. However, the holding time can be much shorter than those who are HODLing, and typically much longer than those of a day trader.
Arbitrage — Bitcoin arbitrage is quite similar to the styles above. However, instead of looking for opportunities for profit within the same exchange, traders look across different platforms for those opportunities. Essentially these arbitrage traders will buy BTC from exchange A then sell it at exchange B for a higher price.
These methods require a lot of practice and patience, so it is wise to expect that you won’t get it right on the first try. If you can figure out what strategy is best for you, and continue to seek knowledge about trading, this can be an excellent way to capitalize on the current crypto boom.
3. Mining
Bitcoin mining was one of the first ways to ever obtain BTC, and is still widely practiced today. This process is when miners use powerful computers to solve complex mathematical problems. When they crack the equation, these miners are rewarded with newly-minted BTC. It’s basically a race to see who can solve the block the fastest, and those lucky enough to do it first get to reap the rewards.
Since mining can be so competitive, you can give yourself a better chance by joining Bitcoin mining pools or mining clouds. A Bitcoin mining pool is a collaborative group of miners who solve these equations much faster by combining their computer power. A Bitcoin mining cloud is similar, but as the name suggests, they use the cloud to connect their computing power. By doing this, they won’t have to install and run any hardware-related software directly. In both groups, it is good to note that both the miners’ fees from transactions and the newly-minted BTC are split among the people in the group.
4. Starting your own exchange
If you really want to go big and potentially see a large payoff, you can even start your own crypto exchange. Crypto exchanges are some of the biggest gainers of the cryptocurrency boom as the top 10 exchanges are generating as much $3 million in fees a day, and are heading for more than $1 billion per year. Owning your own exchange has the highest touchpoint for all new users and multiple streams of revenue. It is also a great way to bet on the crypto market as a whole while being insulated from market volatility. As long as there is volume and users on your exchange, you will be able to generate money daily from multiple sources.
You can either start your own exchange from scratch or use a white-label service that eliminates the risks and headaches of doing it yourself. Although a larger investment, starting your own exchange offers you the ability to make money through several different revenue streams, all in one place. Here are the 7 steps to starting your own exchange. If you’d like to learn more about how to start your own crypto exchange, schedule a time to speak with one of their professionals and demo the turnkey white-label crypto exchange solution.
For more information on Nexus Markets, visit our website or social channels. Ready to start trading? Sign up for a free account and get started today.