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Most people enter the world of cryptocurrency with the intention of making money, but not all succeed. With the increasing incidents of crypto frauds, many individuals either quit or fall into some form of trap.
The cryptocurrency business is still considered in its infancy, and cryptocurrency assets are prone to extreme market volatility. When prices rise, investors flock to the industry, but when the market falls, fear causes a lot of people to completely pull out. That said, professional investors employ certain ways to profit from cryptocurrencies in a consistent manner.
This post will take a close look at proven ways to grow your crypto capital/assets more effectively.
1. Long-term Investing (Buying and Holding)
Long-term investing, which refers to buying and holding an asset (be it a stock or crypto) usually for more than a year, is a common and simplest method used by investors to make money. The majority of investors acquire cryptocurrencies like Bitcoin, Ethereum, and others before waiting for their value to grow. They sell at a profit whenever market prices climb.
How does it work?
This investment technique requires the identification of more stable (in the long run) assets that gradually rise in value, resulting in consistent gains over the long term. Bitcoin and Ethereum, for example, have been known to undergo frequent price swings (usually positive) and are regarded as secure long-term investments by many crypto investors as a result.
Trading differs from the Buy-and-Hold strategy with regards to period. Traders try to utilize short-term opportunities. There isn’t a single style of crypto trading, rather there are quite a few. The most common one is day trading. Make sure you sign up with a crypto referral code when joining platforms to get the best bonuses available.
How does it work?
In order to make a fast profit, day traders acquire and sell crypto on the same day. For example, a day trader will carry out his analysis and study the performance charts of the market and will buy at a specific price point based on that.
As a trader, there are various things that could be done to enhance the chances of making more money from crypto, like:
- Technical Analysis: It makes use of mathematical indicators based on previous price movements of crypto to forecast future trends.
- Follow crypto news: Keep up with the latest news and trends to remain ahead of the market. There are many platforms and apps that can help users stay updated.
- Trading cost: A trader can minimize trading costs by using an exchange with low fees. They can perform a fee comparison of different exchanges before picking one.
3. Yield Farming
Crypto yield farming is a function of maximizing returns via the use of decentralized finance (DeFi) on the blockchain. On a DeFi platform, users may lend their digital assets to a liquidity pool and earn interest in the form of cryptocurrency (typically).
How does it work?
Yield farming involves depositing currencies or tokens into a decentralized application (dApp) in order to receive a return.
DEXs are commonly used by yield farmers to lend, borrow, or stake coins to earn interest and speculate on price volatility. Instead of specifying the current price of an asset, smart contracts are used to create liquidity pools. The pools can then use the predefined algorithms to execute the transactions or trades.
4. Invest in an Asset Management Fund
An asset management fund handles the assets of its customers as a financial service provider. Not only does the job entail giving expert advice, but it also requires making investment decisions based on the investment plan, risk tolerance, and financial status of each customer.
Crypto asset management is essentially the act of performing the same exercise on digital assets that are based on blockchain technology, DeFi coins, NFTs, and other digital assets.
How does it work?
Crypto asset managers ease inexperienced firms and individual investors the burden of navigating the sector. They take money from investors and aim for a high return on investment (ROI) over a set duration of time.
Investments are maintained by asset management businesses according to an internal investing mandate or procedure. These businesses frequently have private accounts with wealthy investors. They put money into an account, which is sometimes held by a third-party custodian.
Asset managers choose positions that are tailored to the client’s income requirements and tax situation. They can also make judgments based on a client’s moral and ethical standards and personality.
Mostly, a crypto asset management tool is used for this method. A crypto asset management tool is a software application that assists the asset managers in handling a variety of crypto assets. These applications often allow users to connect several crypto accounts and wallets so that they may conveniently monitor all of their crypto assets from a single dashboard.
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