Besides connecting all of us, the internet has allowed us to make money from the comfort of our own home. The development and adoption of cryptocurrencies such as Bitcoin has sparked a revolution and altered our concept of money.
Unlike sanction currencies such as the Pound Sterling or U.S Dollar, cryptocurrencies like Bitcoin and Ethereum are not regulated by any one central authority. In the past, fiat currencies were accepted because they were backed by a government of some kind. However, cryptocurrencies have changed all of that.
Due to their deregulated nature, cryptocurrencies are able to facilitate the anonymous transfer of funds without any government oversight. As a result, this has sparked significant consternation from various authorities. What was once the domain of surfers on the deep web has now entered the consciousness of mainstream consumers.
While on paper it may seem to be overly complicated, investing in cryptocurrencies can be extremely lucrative. The crypto market is not without its fair share of risks however; the unregulated nature of the markets means that crypto prices can be quite volatile.
For the savvy investor however, this new relatively explored market is indeed worth exploring. Here, we take a look at some of the ways you can profit from the cryptocurrency boom.
Last year, the Economic Journal team took a look at some of the factors that could spurn a second Bitcoin surge and predicted that the market would recover. Now a year later, it would appear that our predictions were on point.
Back in 2018, Bitcoin prices were at an all-time low at around $3,000 per BTC since the 2017 price boom and many were expecting the market to collapse. However, in the 2nd quarter of 2019 Bitcoin prices began to rally and as of the time of writing, Bitcoin has soared to more than $10,000 per BTC.
The above situation clearly highlights the extreme volatility of the Bitcoin market. Within a span of just a few months, prices are able to fluctuate by as much as 300%. Thus, one way of making money from cryptocurrencies is to buy into the market when prices have hit a low when sentiments are down.
From here, you’ll be able to reap the benefits of a recovering market when sentiment once again improves. Given the absence of government intervention, you’ll stand to earn a sizeable amount when cryptocurrency prices improve. However, when investing, you should be aware of the risks involved with such a strategy.
When buying Bitcoins, do take care to purchase them from a reputable trader. Given the unregulated nature of the market, it’s all too easy to get cheated. Some apps, like for example you can read in this eToro review, allow you to buy and sell cryptocurrencies easily without fear of being scammed. There are some eToro fees and commission charges, as there are with any other broker. Therefore, it’s important to do your research beforehand to compare the best online broker for you.
Speculating on Altcoins
The cryptocurrency market is a fluid one that is constantly changing. Each day, new cryptocurrencies are being introduced into the market. Even corporations such as Facebook and Telegram are trying their hand at the world of cryptocurrencies.
Thus, for the savvy investor, this represents an opportunity to capitalise on burgeoning cryptocurrencies. While Bitcoin may be the gold standard for crypto at the moment, there are dozens of alternative cryptocurrencies on the market.
Instead of ploughing most of your investment into Bitcoins, altcoins are a good alternative. They are typically cheaper than Bitcoins and also have much more room to grow. Binance Coin or BNB is an altcoin that has seen rapid price appreciation in recent times.
In fact, it is said that early investors of Binance Coin have seen returns of up to 550% in recent months. Thus, for those of you looking to invest outside of the box, altcoins can be a good choice.
Work for Cryptocurrencies
One of the more straight-forward methods of deriving an income from cryptocurrencies can be done by accepting payments in cryptocurrencies. For some, the prospect of trading fiat currencies into cryptocurrencies may be too risky.
Hence, instead of buying crypto, you can always choose to work for it. Thanks to the connectivity offered by the internet and increased adoption rates of cryptocurrencies, it’s relatively easy to find clients willing to pay you in crypto.
In order to do so, you’ll need to do is to sign up for an e-wallet to receive cryptocurrencies. From here, you’ll be able to trade or invest your cryptocurrencies on a variety of platforms and exchanges. When registering for an eWallet, always ensure that you work with a reputable e-wallet provider.
With technology advancing at such a rapid pace, entrepreneurs and investors need to diversify their portfolios and sources of income. Cryptocurrency is one such way to do so but care needs to be exercised in order to manage your risk exposure.
Author: Benjamin Lee