9 Money-Making Tips For Cryptocurrency

By David S. Chang

Source: Pexels.com

Cryptocurrencies have become a popular investment in recent years. Satoshi Nakamoto launched the Bitcoin, the first cryptocurrency, in 2009. Since then many experts believe it to be a fad, while others believe it is here to stay.

What are cryptocurrencies? Cryptocurrency is a digital currency that can be used to conduct transactions like regular money. The currency is built with cryptographic protocols that make the transactions more secure and difficult to counterfeit.

No government entity or bank controls or currently regulates cryptocurrencies. Besides Bitcoin, there are now other competitors that have entered the market. Those interested in trading in cryptocurrency do it through an exchange.

Some have made millions while others have lost millions. The value of Bitcoin hit an all-time high of close to $20,000 in December of 2017. Since then it has dropped to a low of $3,200, and as of June 2019, hovered around $8,100.

If you invested $1,000 in early 2017, it would be worth about $8,150. Even though it would be much less than at its peak, you would still have a profit. If you purchased $1,000 at its height at in December 2017, you would have lost about $11,850. Volatility is very common for pretty much all cryptocurrencies.

So is cryptocurrencies worth investing in? Like all investments, as long you have a long-term view, it can be profitable. Here are some money-making tips for those interested in cryptocurrencies .

Do Your Homework

With any investment, it’s imperative that you are doing your due diligence. Mad Money’s Jim Cramer recommends spending at least one hour per week per stock doing the proper research. This way if anything happens, you know what’s going on.

While many hold the mantra “buy and hold” he holds the mantra “buy and homework.” Especially with a volatile investment (and relatively new) like cryptocurrency, you will need to do your research to help avoid any unexpected surprises.

You will also need to have an understanding of how the market operates, the pros and cons of the different cryptocurrencies, to make a profit over the long-term. Otherwise the “smart money” will take advantage of the “dumb money.”

Selling Research and Tools

As with any large market, there is also a big peripheral market surrounding Bitcoin and other cryptocurrencies. In addition to investing in cryptocurrency, there is a large market for helping others get into the market. If you plan on doing all of the due diligence, you can leverage that knowledge to help others!

Some of these are informational items, while others can be software-based. If you’re a tech minded person, then you can build an app that benefits cryptocurrency users in some way. For example, you can offer real-time prices, trends, and market history graphs. Or provide technical analysis on the different cryptocurrencies.

There’s also a market for cryptocurrency-related hardware. You can look at selling used ASICs and GPU mining rigs. Cryptocurrency was originally designed to be something anyone could do with their home computer. While those days are long gone, you can still mine cryptocurrencies with an application specific integrated circuit (ASIC) miner.

ASICs are chips designed for a single purpose. It can be process audio or manage a phone call. Cryptocurrency ASICs are specifically-designed motherboards and power supply built into one unit. The chip is then used to run complicated calculations to find a specific number.

Mining hardware such as ASICs or GPU mining rigs, have to process many calculations to find this number. Imagine them digging through digital layers of rock. For Bitcoin, the first one to find that number gets a reward. Currently that reward is 12.5 bitcoins, which is worth about $101,875.

Since there are many people mining for Bitcoin, miners have banded their resources together to find that number. People who can afford an ASIC miner gets an edge and greatest chance of earning cryptocurrency. With ASIC technology improving every year, there is a market to buy and sell older mining equipment.

Think Long-Term

Cryptocurrency, like any investment requires a long-term approach. It will go up and it will go down and isn’t a matter of if an investment will go down, but when. It is important to stay disciplined and not let your emotions get in the way.

The biggest obstacle to making money is ourselves. We get become our worst enemy when it comes to investing. Sticking to a long-term financial plan will help you from making costly investment mistakes.

Diversify Your Holdings

As with most things, it’s best if you don’t have all of your eggs in one basket. There are many different digital currencies out there, it’s not just Bitcoin.

Some experts think that it’ll be one of the other, newer currencies that claim the top spot in the long run. If you’ve got all of your money tied up in just one currency or investment, then you have less flexibility to take advantage of any other investment opportunities.

The key is to understand the difference between speculative investing and core investing. Core investments are stock like the S&P 500 and the MSCI International Developed stocks. The chances of the top 500 publicly traded companies in the U.S. all going bankrupt is extremely low.

Cryptocurrency is 10-years old and while it may be here to stay, the value is certainly up for debate. It is possible with so many new currencies entering the market that supply can outstrip the demand, lowering the price. Cryptocurrency would be a speculative investment.

You should only invest money that you can afford to lose in speculative investments.

You should only invest money that you can afford to lose in speculative investments. For many people, that should be no more than 5% to 10% of their portfolio. If they were to lose that amount then they could continue to maintain their standard of living. This is why diversifying is so important.

Accept It As Payment

It seems like many people who invest in Bitcoin are more interested in the potential financial return, rather than using it as an actual currency. Still, there are people who spend theirs – and if you’re a business owner, then this can be good news for you.

Why not look at accepting Bitcoin and other digital currencies as a form of payment? It may be worth it for large ticket items and you can hold on to the the cryptocurrency in hopes that it will increase in value.

Want to accept Bitcoin but don’t know how? You can open up an e-commerce store on the platform Shopify. Shopify has an option where you can accept Bitcoin as payment in addition to credit cards.

But Ignore the Buzz

When doing your homework and research, it is important to wade through the hype. People like John McAfee will have interesting opinions on Bitcoin, and like all opinions, should be carefully vetted. Many express their opinions for their own interest.

Ignore the buzz and come to your own conclusions. The key is to follow your own financial plan that fits your goals and your situation. Don’t get sidetracked by what others say and do.

David S. Chang

Award-Winning Entrepreneur, Wealth Manager and CEO | Chief Editor, Author, Keynote Speaker, Consultant ArtofThinkingSmart.com | Political Consultant | Army Officer National Guard | Living To Fulfill Needs, Solve Problems, and Live Passionately!

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