In the last 5 years, the crypto industry has gone from relative obscurity to the mainstream of investing and trading.
With more and more new participants entering the market – from banks and hedge funds to central banks, it’s still a market that has so far been dominated by retail investors.
During the last 5 years, we have seen two strong bull markets and subsequent selloffs. In case you believe it’s time to try and earn some additional income, here are 5 ways to achieve financial success with cryptocurrencies in 2022.
Buy and HODL
HODLing is a popular investing strategy in the cryptocurrency market. This simply entails purchasing a cryptocurrency and keeping it for the long term.
Many investors opt for HODL due to the volatility of the crypto markets. This type of strategy usually doesn’t involve the use of leverage, and investors can only lose the amount they invested in a particular coin.
Therefore, it’s very similar to the traditional way of investing in stocks for the long term.
Some research into the projects which you pick is beneficial, as picking the right cryptocurrency which has a strong team, community, use case and investment is likely to do better than just simple random choice.
Stake your crypto to earn interest
Once you have accumulated the cryptocurrency you have a few options in terms of what to do with it. The most obvious one is just to keep it in your wallet and hope that it will appreciate.
The other is to earn income from it and staking it is exactly that. If you stake your crypto, you get paid interest for doing so. Therefore, it’s very similar to depositing your money in the bank, however, crypto staking usually earns you more in terms of APR.
Of course, if the crypto goes down in value, you will lose in terms of fiat, but the actual number of coins that you have is going to grow.
The ideal scenario for stakers is for the value of the crypto in terms of USD to also go up.
If you are looking at even riskier options than traditional buy and hold and staking, trading crypto actively could be an option for you. For traders, most major crypto exchanges offer crypto futures with leverage of up to 100:1.
This means that you can trade big positions with small amounts of capital. Keep in mind that there are overnight holding charges associated with these derivatives and that your account could potentially end up with a negative balance.
While leveraged products could increase potential gains, they also magnify the risks involved with trading, so familiarize yourself with the risks involved.
You can also trade actively the actual coins rather than leveraged derivatives. For more sophisticated traders, some marketplaces also offer options on cryptos.
Participate in ICO/IDOs
Initial Coin or DEX offerings are another forms of crypto investment. This basically means investing in a project before or exactly when it gets listed on a crypto exchange.
In order to do this, you need to perform certain actions to increase the awareness around the project and maybe stake some crypto on launchpads. Launchpads are places where new projects are launched and raise capital.
Typically, the people who manage these launchpads do due diligence on the projects before offering them to investors, but it’s still dangerous as sometimes a project looks good on paper but doesn’t end up delivering the results.
NFTs stands for Non-Fungible Tokens and it’s something that keeps getting negative attention from traditional investors and crypto skeptics. Initially mainly used for Art and in-game assets, it’s baffling how a picture or a gif can be worth thousands of dollars.
Especially when you can easily replicate it or just save the picture without owning the NFT for it. But isn’t the traditional art market something very similar?
I guess it’s up to everyone to make up their mind whether NFTs are a scam or a revolution in the art and gaming market.
The more desired NFTs tend to be unique and rare and have some sort of utility – whether they represent a character that you will be able to use to play a game and then resell if you no longer want to play.
Or land in a metaverse. Or it gives you access to real-life events or gives you a membership to a club.
Regardless of all of these even NFTs with utility are very hard to value and could prove to be an extremely risky investment. Probably the riskiest of all the ones listed in this article.
That being said getting the right one could land you significant returns, so maybe allocating some funds to NFTs could prove beneficial.
Finding the crypto exchange that offers access to these services
Now you have an idea of how to achieve financial success with cryptocurrencies, it might be time to find the place where you can buy, trade, stake, do ICO/IDO, and trade NFTs.
Keep in mind that only some venues offer a fully integrated solution that allows you to do all the above. Using a website that allows you to filter the best crypto exchanges might be an option.