With the increased spread of cryptocurrencies and stablecoins, individuals are looking for opportunities to benefit from it. Learn how to make money from your digital assets using different investment strategies.
There are many options for investing in the cryptocurrency market. Some traders believe that one trading robot with an effective strategy replaces any other investment tools. Others believe that it is best to engage in active trading on your own.
Most novice investors are chasing huge profits, dreaming of becoming millionaires overnight. Others are confident in the future of a decentralized economy and prefer to simply buy crypto assets and hold them in a portfolio for a long time, this strategy is called “HODL”. The wise ones prefer to use crypto savings accounts offered by platforms such as CoinDepo and several others.
HODL
“HODL” term appeared accidentally, but later became interpreted as “Hold on for dear life”. This popular word refers to the long-term holding of crypto assets that you currently own, despite highly volatile and unpredictable cryptocurrency market movements. In the next few years, the coins will be worth more than you bought them for anyway, due to their limited supply and new features.
This method implies that an investor should not at all depend on short-term sharp market movements, but only look at the long term. The word HODL encourages people not to trade impulsively when a cryptocurrency falls sharply or rises in price, becoming very profitable to sell.
When this approach is used, cryptocurrency becomes not just an investment object, when you use it for staking or deposit it for a few weeks or months into a crypto savings account. To some extent, it turns into a life philosophy based on the belief in the inevitability of the emergence of a global decentralized monetary system and doubts about the efficiency, transparency, and reliability of fiat economies.
If you are just starting, then you should only hold Bitcoins – the most famous cryptocurrency. If you are willing to take the trouble to understand different coins, you can invest in other cryptocurrencies with a good history and reputation, such as Ethereum or Polygon. In either case, this is a good strategy for a beginner. Over several years, it can give from 50 to 100% per annum. Moreover, in the case of buying Bitcoin, it costs minimal effort. According to some experts, Bitcoin’s value could reach $100,000 or more in the future.
Crypto Trading
Another strategy for investors in the cryptocurrency market is trading tokens. Cryptocurrency trading is the buying and selling of cryptocurrencies such as Bitcoin, Ethereum and others on centralized and decentralized crypto exchanges. That is, buying them and reselling them at a higher price.
Just like staking and storing your coins in crypto savings accounts offered by Binance, Nexo, Crypto.com, CoinDepo, or other platforms, trading cryptocurrencies has its pros and cons. It is important to understand them before deciding to use this investment strategy.
Ø Cryptocurrencies are known for their high volatility, which means they can experience significant price fluctuations over a short period. The result is huge profit potential for traders. At the same time, it can lead to significant losses if traders are not careful.
Ø The decentralized and unregulated nature of the cryptocurrency market provides traders with more flexibility and options compared to traditional trading. On the other hand, lack of regulation encourages fraudulent activities and scammers, which can again lead to significant losses.
Ø Transactions in the cryptocurrency market are generally faster and more secure thanks to blockchain technology.
Ø Numerous crypto exchanges allow one to find a platform suitable for a particular trading strategy and other personal preferences.
There are many different approaches to trading cryptocurrencies. To start trading cryptocurrencies, you first need adequate knowledge of the subject. Trading itself is a risky activity. It is almost impossible to predict future market activity with certainty. If you are not ready to take such risks or still learning, you can take a much safer route with crypto savings accounts offered by various financial service providers for digital assets, or use the HODL strategy.
At the end of the day, it is important to make your own decisions using available information and your own judgment, and to make sure you are properly educated.
Crypto Savings Accounts
Today, the most common way to receive stable and guaranteed returns on your cryptocurrency investments is through a crypto savings account. These accounts are similar to savings accounts offered by most traditional banks and pay an interest rate on your savings. However, depending on where you are and what options are available to you, chances are that even the most generous bank savings account will earn interest income that only covers the rate of inflation in most countries.
Fortunately, some crypto exchanges and cryptolending platforms, in particular Binance, Huobi, CoinDepo, Nexo and others, take cryptocurrency and stablecoins from their customers in exchange for guaranteed interest payments. They do this to attract liquidity and earn profit using various strategies that eliminate the risks associated with trading cryptocurrencies.
With this strategy, everything works like in a regular bank – there are fixed rates for specific deposit terms in cryptocurrency and stablecoins. Deposits for a longer period give greater profits; options when you can withdraw your coins at any time usually bring less money. In any case, the interest rates are much higher than what traditional banks can offer.
For instance, CoinDepo offers its customers some of the most lucrative returns on cryptocurrency and stablecoin savings accounts. One can earn from 12% to 24% APR plus compound interest on stablecoins and crypto fixed deposits. They have full insurance for the digital assets entrusted to them, and you can deposit more or withdraw at any time. This strategy gives the user a guaranteed income without any risk.
Invest in Cryptocurrency Successfully
Deciding which strategy to pick is difficult. There is a very attractive, yet risky trading option. Trading – that is, the active purchase and sale of digital coins on the exchange – is by no means the only and not the best way to make a profit from cryptocurrency.
If you have no experience in crypto investing, then you can consider the less risky HODL strategy. It is important to understand that this is a method for the patient – you are investing money over the years and do not expect quick results.
Earning passive income from digital assets without having to wait for years is made possible with the appearance of crypto savings accounts. CoinDepo, for example, provides the opportunity to receive interest on deposited assets on a daily, weekly, monthly, quarterly, semi-annual or annual basis. The rates can go as high as 18% per annum for major cryptocurrencies and 24% per annum for stablecoins, giving users guaranteed income from their crypto investments.