Given how essential money is to us, many are always on the lookout for proven means—both offline and online—to amass sustainable wealth. In the past, many majorly relied on offline businesses, as well as government and private-sector jobs to make money.
But with the advent of the Web1 internet in 1956, myriad digital alternatives to create wealth emerged, reducing the over-dependence on the government to provide job opportunities. As the internet advanced to the developing Web3 iteration, we could see infinite ways of making money being introduced.
Among the many proven digital paths individuals and institutions can tread to create limitless wealth is cryptocurrency or crypto trading. From being called a bubble by critics, cryptoassets are rapidly evolving into becoming an alternative investment option for both individuals and companies to leverage and make profits.
However, while everyone who engages in crypto trading does so intending to generate mouth-watering incomes, not all crypto traders have been able to collect their desired gains. Notably, many have lost their capital and even accumulated debts in the course of trading cryptocurrencies.
Do you want to know how to make money from crypto trading instead of always losing it to the market? Then this article is for you!
1. Understand what you are venturing into.
Cryptocurrencies are digital assets whose value can be determined by several factors, including their tokenomics, utility, and demand in the market. The buying and selling of these crypto-assets such as bitcoin (BTC) and Ether (ETH) on exchanges is what we mean by crypto trading.
Therefore, just like every other conventional trade business and investment opportunity, it is pertinent for crypto traders to have a clear knowledge of what crypto trading entails, what makes the market tick, and the skills required before jumping on the train. (Avoid the bus!)
A major reason many people lose money in the crypto space instead of making it is that they lack adequate knowledge and the needed aptitudes. So, if you must succeed as a crypto trader, do well to gather sufficient information either by personal research or mentorship, carefully study the risks involved, as well as develop the right mindset and psychology.
In other words, don’t venture into the business of crypto trading blindly. Don’t also do it because your friends or colleagues are into it or to not feel left out. Crypto trading is not the only way to become rich; there are many other ways to make money online.
And as an intending or existing crypto trader, don’t make the mistake of thinking that trading crypto trading is a get-rich-quick scheme. Why? You will only get yourself rekt and always frustrated.
In addition, learning to read and interpret crypto charts—commonly known as Technical Analysis or TA—is among the top skills required to make money from crypto trading. Its counterpart—Fundamental Analysis or FA—entails a crypto trader’s ability to examine the basic properties of a particular crypto project to determine a cryptoasset’s intrinsic value and growth potential. Both the TA and FA skills are quite essential for recording profits in the crypto trading business.
2. Invest in solid projects.
Solid projects here refer to cryptoassets with outstanding and appreciable use cases or utilities. The crypto market is filled with several coins and/or tokens of different classifications, including memecoins, privacy coins, utility tokens etc. While most of the cryptoassets in the market today have exceptional use cases, many others were not created to solve any particular problem or fill any real-world gap.
Therefore, it is only wise for an intending or existing crypto trader with profitability in mind to invest in coins or tokens that have robust use cases. It is commonly believed that utility drives demand and in most cases, demand always drives value upward. All things equal—and they hardly are where there are variables that constantly change.
But remember that in the crypto space, hype can also fuel an increase in the price of a cryptoasset, whether it has use cases or not. A well-equipped or highly educated crypto trader would always know which assets to buy and how to profitably play around with them.
3. Have the long-term mindset.
Take for example bitcoin (BTC), the leading cryptocurrency by market capitalization, which is trading at over $28,000 at the time of writing. It took the asset many years to rise in value. It didn’t happen at the snap of a finger. In essence, when investing in a solid cryptoasset, remember that attaining its full value may take some months, years, or even decades. So, do not expect it to give you life-changing returns within a twinkle of an eye. Shitcoins may do, but you should avoid such coins. They are not healthy for the ecosystem. A true investor, whether with a short-term, middle-term, or long-term strategy, should not be involved in projects that prey on unsuspecting victims. Cashing out of scam projects is neither crypto trading nor crypto investment. It is scam.
While taking short-term profits is part of the crypto-trading game, larger profits can be accrued when the long-term mindset is in place. Not judging Laszlo Hanyecz who agreed to pay 10,000 bitcoins for two Papa John’s pizzas on 22 May 2010 but if the early bitcoin adopter had held much longer to his bitcoins, Hanyecz would have gotten more value for them.
Don’t be deceived, playing the long-term game is no mean thing as it requires a truckload of patience and discipline. So, it’s okay if you cannot hold for too long but if you can, try it and you’ll be surprised at how much profit you could amass.
Crypto trading can be a profitable investment option for those who take the time to learn and understand it. As a beginner (or even expert), it’s important to start with a capital you can afford to lose, diversify your portfolio, stay updated with market news/ trends, invest in solid projects, and have a long-term mindset. On the whole, making money from crypto trading requires getting adequate knowledge, adopting proven strategies, as well as being disciplined and patient.
Credit: Ndianabasi Tom
A crypto journalist and content writer who has been talking about cryptocurrency and blockchain technology since 2018, Ndianabasi is a Writer at Crypto Asset Buyer (CAB).