Can a beginner make money investing in cryptocurrencies?
Investing in cryptocurrencies can generate big profits. However, it is also very risky. You can win and lose a large amount of money quickly. This means that crypto trading is exciting and it can be very difficult to keep your mind at peace under heavy pressure.
If you find it difficult to make money with cryptocurrency. You may think "should I invest in cryptocurrencies?"
In this article, I will show you what prevents a beginner from making money with cryptocurrencies and some safe ways that you can consider.
At the end of this article, you will know How to Earn Money with Cryptocurrencies.
What prevents beginners from earning income?
Making money with cryptocurrencies will take a lot of time and constant effort.
Well, unlike professional investors, most beginning traders who learn to trade are not full-time traders to dive into the markets.
That means they don't have enough time to get to the level where they can trade like a pro.
You do not have a clear business strategy
Ask yourself a question: "What is my trading strategy?" If you answered: “Strategy? Well I just bought and waited hopefully, is that considered a strategy? ". Now we have to talk.
If you don't have a clear trading strategy, whether it's based on technical indicators or basic data on crypto assets or technology (algorithmic trading), then there are certainly a lot of potential problems you can run into.
However, first, you need to better understand yourself and your trading style. Digital assets are one of the most volatile assets these days, but at the same time, basic blockchain technology creates an opportunity to get rich in the future.
- You blindly hope to recover
The blind hope of a bounce or bullrun is something that every trader has experienced at least once. That is why you will see repeated reminders in investment documents that say, "What happened in the past is not an indicator of future price movements."
In fact, there is a difference between technical analysis and looking at the screen and chanting "Bitcoin will hit 100,000 Dollars" until that happens.
- You are averaging your position during the downtrend
Another problem you may encounter in the bear market is the average of the downtrend, or in other words, wrapping it in the market. Some altcoins are considered promising or real prospects, but stop and ask yourself why this coin keeps hovering and can't get out.
Buying when the market is falling is a good way to buy low, but you should also sell as soon as you feel good, or you may have to see the currency decline even deeper before any profit shows.
You probably know that some people can buy at 100, the price drops to 80 and still does not reduce losses as previously thought and then to people who wait for the market to return, spend money, buy to wait to 'be in a position' average ”And reduce losses. Then it comes back down and you panic.
You completely forgot about risk management
Without questioning why an altcoin (or even Bitcoin) is so volatile, it will lead us to the following reason to answer the question "why are you losing money in the bear market?" If you don't pay attention to risk management, you are missing out.
Wondering your current average risk level for assets and exchanges? Will I have a chance to recover if one of the coins is delisted or the exchange is hacked? If you don't have clear answers to these questions, you may be walking in a minefield.
You don't learn from your own mistakes
The last reason is probably the most important. Almost everyone has looked at the screen several times and asked for an increase in investment. Or some people continue to buy a crypto asset that is sinking and is unlikely to recover. But they have learned a few things. If you are making a mistake in this bear market, pay attention to them. It is the cost of education, although the loss is not fun, if you do not take advantage of that opportunity and learn from mistakes, especially due to excessive hope or limited knowledge, the more you will lose.
Ways you can do to make money with cryptocurrencies
There are many ways to make money in the crypto industry, but not all of them are effective and safe. I will explore some proven ways to invest in cryptocurrencies. Here are the best ways:
This is the easiest way to make money with cryptocurrency. Many people decide not to trade cryptocurrencies but instead buy a certain number of coins and then put them in their wallets until the price goes up so that they can make a profit.
The premise of long-term investing is that you have done your research and believe that the cryptocurrencies you invest will gain more market share after some time.
Although there are many different digital currencies, we recommend that you choose the safe and highly liquid currencies, such as BTC, LTC, and XRP. These coins have been popular in the market. If you invest in a new crypto currency, it may be cheap, but the currency is likely to disappear after the market test.
Currently, many people make huge profits from Bitcoin, because they bought Bitcoin in the year 2011 or 2012, and they hold these digital currencies for several years, even if the price of bitcoin had risen to over 60,000 USD.
easy to start
Takes a lot of time.
Crypto CFD trading
Any product with price fluctuations can be negotiated in the form of a contract for difference. CFD is really just a financial tool. With CFDs, you can do leverage and margin trading on bitcoin.
You can be a buyer or a seller. You only win the difference between the ups and downs. It is popular to use CFDs to hedge physical portfolios for investors, especially in volatile markets.
This makes this a very profitable way to make money, you do not buy or own a real cryptocurrency, you only have one contract and keep it in circulation. With cryptocurrency CFD, you can trade 0.1 bitcoin with a small deposit as initial margin.
Low cost to start
Increase profits by using leverage
The ability to open long / short positions without restriction
Easy trading from anywhere with computers and mobile devices
The main risk associated with CFD trading involves leverage.
It is not suitable for a long-term position.
Mining your cryptocurrencies can be more difficult than the other ways, but it can be more profitable when you mine successfully.
Although the mining process can be done from a computer, you still need basic software, specific hardware, a crypto wallet, and a lot of electricity. For most people, mining is a highly specialized industry that is not suitable for individual investors.
Most of the Bitcoin mining is done in a large warehouse where there is cheap electricity.
Sometimes the hardware is expensive too. For example, during the bull market in 2017, the price of the GPU rose sharply, while as the market crashes, you can buy good mining equipment at a lower cost.
In the early years, bitcoin miners were able to earn coins relatively quickly. But for 2021, cryptocurrency mining is more complicated. Many professional miners have built large dies to mine, making it difficult for smaller miners. Of course, you can join a bitcoin mining pool to be more effective, but that carries a fee.
Instead, there are some cryptocurrency miners to mine other coins and then exchange them for Bitcoin on some cryptocurrency exchange. This is another way to get more bitcoin.
There are also some crypto mining apps in the crypto industry, claiming to help you mine crypto currencies. It's more like a mining hobby. Don't trust an app that tells you it will earn a lot of money for you.
Earning potential is higher
High cost to start