Crypto as a new asset class has opened up new frontiers in investing platforms. The 2017 Bull Run that caught many unaware raised billions of dollars for early adopters. Then the 2018 crash came and a good number of people made loses. This left many skeptical of cryptocurrencies as dependable investment instruments. What needs to be appreciated is that investing in cryptos should be approached with the same care as other investments in and out of financial markets.
There are several ways (many touted as get-rich-quick-crypto schemes) that crypto users can use to grow their investments. It is important that investors scrutinize and audit all strategies presented first before committing funds into them. Reckless and blind investing leads to loses that create panic and reduce the general expectation of cryptocurrencies. Below are select strategies on how to grow crypto assets. We recommend working with specialist crypto advisors
Holding
This is rather obvious and the most common strategy. Although Holding poses a high loss risk, it is important to have a solid idea of the investment you wish to take a holding position with. Holding can realize significant profits in the long term. This involves picking an asset whose technology and use case scenarios have high prospects of adoption in the future. With this approach, there is some sort of belief that price falls are relatively short-term.
Holding can also bring in more cryptocurrencies through airdrops and reward tokens. Some exchanges reward users for holding coins on their platforms. Crypto companies on the other hand give out tokens through airdrops for marketing and advertising. Always consult with industry accounting professionals on the tax implications of holding cryptocurrencies, find out more here.
Mining
Mining cryptocurrencies was once a highly lucrative undertaking. Now it has been left to big companies due to the high costs of electricity and mining instruments. However, small miners have a chance to mine through joining mining pools. Also, it is important to note that crypto mining algorithms are set to adjust difficulty levels according to the competitiveness of the mining. As such, mining costs will technically never be too high for profits. If it becomes totally expensive to mine, miners will pull out then the algorithm readjust to simpler mathematical computations that are less costly to complete.
Running Masternodes
Masternodes are the miner equivalent in Proof of Stake consensus. Just as miners are rewarded in block rewards for adding new blocks to the network, Masternodes are rewarded in network coins for verifying transactions and securing the network. To run a Masternode, one must hold a given amount of coins as required by the network. Also, they must be able to stay online 24/7 every day.
Day Trading
Trading in cryptocurrencies involves buying at low prices and selling them at higher prices. Through this, one can realise profits several times in a day. This requires some level of expertise in trading and a good hand as it is almost similar to gambling. Users with no experience in trading can use trading bots to trade.
Arbitrage is another form of trading. It involves buying crypto assets at low prices on one exchange and selling them at higher prices on another. This form of trading is known as spread trading.
Investing in crypto companies
The ICO craze and the subsequent low take off of massively funded projects may be discouraging. Nevertheless, there are crypto companies that eventually grow enormously. With proper research, one should be able to identify a growing company and invest in for a stake in its profits.
Gaming
Crypto and gaming go hand in hand and the gaming industry may soon explode from decentralisation. Investing in unique in-game collectibles may turn out into a great investment as unique collectibles sell at significantly high prices. Also, developers can curate unique assets on gaming platforms. The P-2-P ecosystem provides direct entry and cooperation between players and developers. This gives creatives a chance to monetise on their unique assets.
Blogging
Creating content on crypto supported platforms such as Steemit enables content creators receive pay in crypto. Also, once one creates a huge following on social platforms, they can conduct affiliate marketing for crypto companies, thus earning from their referral programs.
Compound, a Coinbase funded lending platform is a centralised platform that lends directly to borrowers. It offers very short term loans which can be used to short cryptocurrencies. By shorting, instead of expecting a rise in price value, you put your money on the opposite. It is quite similar to gambling as you predict a certain fall in coin prices. While it may appeal more to crypto haters, it looks like a good way to double up on coins in bear markets.
As initially warned, different investments work for different people according to the initial capital required as well as potential risks in loses. Without diligence, crypto investment can go wrong as any other investment would.
