How Much Money Can You Make in Cryptocurrency?
Every investor knows one crucial question whenever setting up any investment. What will be the return on investment (ROI), or how much money will it bring. That’s true also for crypto trading. Before venturing into whatever digital coin, whether Bitcoin, Ethereum, or Litecoin, people would want to know such decisions. Have you been wondering about how much you can make with crypto? If so, this discussion is perfect for you. It will highlight what you can gain from the crypto investment, what to do before starting it, and other significant concepts. Read on to find out more.
What is Cryptocurrency?
Not everyone knows or has heard of the term cryptocurrency. Some might want to venture into it without a proper background on the subject. Cryptocurrency is a digital, decentralized currency that uses a technique called cryptography to facilitate transactions. It’s digital since you cannot physically hold it like it’s done with the fiat currencies like dollars. This currency’s decentralized nature means that no government or its central bank interferes with or regulates the crypto industry. There are several cryptos available for traders to deal with, the oldest, most famous one being Bitcoin.
What to Know Before Investing in Cryptocurrency
Before thinking of how much money to make, it’s vital to consider some things. The crypto industry is novel, and rushing into it can cause disappointment. Thus, here are some of the things to know and do before settling for it:
- Decide on appropriate crypto. As mentioned above, there are numerous of these digital coins. The amount of money you’ll make is highly dependent on which one you choose. It’s advisable to acquire popular and high-value coins like BTC, ETH, BTC-cash, or LTC.
- Choose a wallet. What benefit can result if you make money and lose it all? It’s like someone whose entire hard-earned money kept in the bank is stolen. All cryptos are stored in secure digital banks called wallets. Again, there are numerous of these. Choosing the most secure and reliable one will suffice. Hardware types are the most preferred.
- A crypto exchange. Exchange is the cryptos market where buying and selling take place. Several of these platforms exist, some global and others region-specific. Find out which ones are supported where you live. A reliable platform like Binance, CoinBase, or Bitifinex can help you. The amount of money you need to commence this activity depends on the coin you choose or the exchange’s fees and rates. You can also turn to A1 Credit to learn the best cryptos to invest in.
- Research thoroughly about the market. There’s more to having the capital to start. Take time and learn some significant concepts about the crypto market- what moves the price, available trading strategies, how to analyze market trends, and more. That way, you’ll exhaust so much about cryptocurrencies and be ready to start earning from them.
How Much Money Can You Make?
Let’s now consider the amount of money a person can make from cryptocurrency. Is there any direct answer as to what specific amount it can be? No, people make various amounts depending on multiple factors. You can make as low as $100 within a particular period, say one day, or earn even up to a million. It all depends on how you do it, the route you take, and your determination. But, all is possible in “using this currency to make money.” Remember, like any other trade, there are also losses and sometimes unbearable for those who lose hope fast.
For instance, if you use $ 6000 on a Bitcoin miner and a year later it mines $ 10000, you’ll end up with a total of $4000 as a net return. The value of Bitcoin at your investment time will highly determine the resulting amount you get.
If today, it is $15,000 per coin, and in the next three years it rises to $21,000, you’ll have made some money. Therefore, the amount you make in crypto depends on the coin value, how much you invest, the selected coin, and the method/strategy you use. A practical example is Bitcoin; in 2011, if you bought one from the prominent exchanges at $10 and sold it today, the profit you would have made is $990. Meaning if you spent $10,000 to purchase 1000 BTCs back then, in 2020, you could sell them each at $1000, making you a millionaire.
Ways of Making Money with Cryptocurrency
A key determinant of whether or not you can make massive amounts of money in cryptocurrency is the strategy or method. most people make money with crypto by buying and selling directly on exchanges, mining, day trading, or holding their funds for better prices.eas
- Direct buying and selling. This is the easiest way to earn from cryptos. It involves obtaining them from exchanges and selling them for fiat currencies or other cryptos. Anyone with some spare money to spend can venture into this money-making avenue.
- Day trading. It is tough and challenging but profitable. When day trading, you buy a coin at a lower price and sell it at a higher one within a day. The concept is to make small but faster profits. It requires proper knowledge of the crypto market trend and analysis like the technical analysis to determine market movements. It would be best if you also were a ready risk-taker. Read more on CryptoonLiner.
- Mining. When you mine Bitcoins, you keep a record of transactions and help in facilitating blocks to be added to the blockchain. It is the hardest technique and needs commitment and use of technical software and constant electricity supply. Successful miners are few compared to those who do the work.
- Yes, holders are called so because they store their coins until their values rise then release them. If you buy BTC today and keep it for six months while awaiting an increase in price, you’re doing “hodling.” It’s an effective way to make more money, especially if you’re patient enough to wait.
The Bottom Line
Cryptocurrencies are here to stay, and with time, they’ll gain much popularity. Even if they can’t ever replace fiat money, these digital items are the investment of today. You can also be like several other people who have seen that crypto is the way to go and are now making thousands. Indeed, you can make a lot of money with cryptocurrency if you give it a try!