Get Started In Cryptocurrency Trading Today
Anyone interested in the crypto market is looking for the jackpot; money. Between 2019 and 2020, the volume of cryptocurrency exchanges saw an increase of 78%. More and more people are starting to trade cryptos and use them for transactions.
The only thing potential investors would like to know about this space is, can they earn a living by trading cryptos?
Already, millions of people are living from it. Although this reality exists, not everyone can experience it. It is either that they fall into the trap of the crooks, or that they lose all their investment capital, or that they lack the know-how.
There are several ways that people can earn legitimate money from crypto trading.
Proven Ways to Make a Living Trading Cryptos
Here are several ways to make a living trading crypto.
1. Earn dividends
Traders and investors buy cryptocurrencies and hold them to earn dividends. Some of the cryptos call dividend rewards. This is the passive income that crypto investors get by holding the assets in their portfolio for a certain period of time.
It should also be noted that crypto dividends do not work like stock dividends. They do not come from excess cash generated by a business. The amount received in rewards by traders is determined by the amount they hold in their wallets and the trading volume of the specific crypto.
The advantage of earning crypto dividends is that you don’t have to stake your assets. Note that not all cryptos are suitable for your investment portfolio. Take the time and do your research to identify the coins that match your investment goals.
2. Purchase and retention strategy
The buy and hold strategy is among the most used by investors to earn a living by trading cryptos. They buy different cryptocurrencies and hold them until they rise in value. At this point, that’s when they sell them for a profit.
This trading strategy requires an analysis of the coins to identify which ones are both volatile and stable. Traders are looking for such coins so that they can earn money from their rapid change in value. Bitcoin is a prime example of cryptos that have the characteristics mentioned, making it a viable investment in this case.
Investors are also advised to diversify their investment by having a mix of altcoins with a bright future in their portfolio.
3. Trading day
If executed correctly, day trading can be a lucrative way to make a living trading crypto. If you don’t have a good strategy, however, that strategy can prove difficult. The advantage of day trading is that investors can take advantage of the features of the market at any time of the day, seven days a week. The market never closes.
There is also volatility in the crypto market, which offers traders plenty of opportunities for profit. There is transparency when it comes to data in the crypto market. What does this mean for traders? They don’t have to pay to get their hands on this data.
Day trading requires intense technical analysis. The trader should invest his time studying the charts and analyzing the performance of the assets that interest him. It’s considered one of the most engaging trading strategies, but there’s a silver lining: It can be rewarding too.
It should be noted that traders can also save on taxes during day trading by using regulated futures cryptocurrencies.
4. Execution of the master nodes of the parts
You can make a living trading cryptos by running the coin master nodes. The income comes in the form of rewards and the value of coins increases. Traders using this strategy also contribute to the stability of the blockchain. The specific blockchain network activity will also determine how much money you will earn.
It is a good way to generate passive income if you are a node operator.
5. Crypto arbitrage
This strategy takes advantage of cryptocurrencies that trade at different prices on different exchanges. Essentially, traders buy low cost cryptos in one exchange and then sell them at a profit in another exchange.
Several factors make arbitration possible. For example, the variance of liquidity. Liquidity is not the same between different exchanges. Also, exchanges vary depending on who trades them. There are exchanges for institutional investors and others for retailers.
The variance of preferences between these exchanges creates an opportunity for arbitrage. The other condition that supports arbitrage is a different withdrawal and deposit timeframe on the exchanges. This determines the ability of the exchanges to catch up with the market. At the same time, transaction fees also vary, creating an opportunity for arbitrage.
This trading strategy has several advantages. On the one hand, it is low risk. By buying and selling digital assets almost immediately, traders avoid the risk of long-term investment. Crypto arbitrage is also not based on bull and bear markets. Whichever direction the market takes, traders will win.
You can make a living trading cryptos in a very volatile market with minimal risk using this strategy. To be successful in crypto arbitrage, you need to have reliable, next-generation technology that will allow you to make fast moves.
Crypto arbitrage can further be broken down into spatial arbitrage and triangular arbitrage.
6. Crypto staking
Crypto staking is yet another common strategy used by traders to make money. The technique is to lock in the cryptos to receive rewards. Note that when traders hold the coins in their wallets, they are securing the particular blockchain.
Earn Your Living Trading Cryptos Using The Different Strategies
The strategies listed above have proven to be effective as investors have used them over the years to earn a living by trading cryptos. If you are looking to venture into the crypto space, you can select one that is right for you.
It is also essential to study the different strategies to understand their advantages and disadvantages before settling for one.
Buy and sell cryptocurrencies instantly