Different Ways Of Making Money In Crypto - Part 1
The significant growth of the crypto market in recent years has turned its space into a "Promised land" in the eyes of investors.
Many people have chosen crypto as a fertile land to “grow” money. However, the crypto market is not simply a story of buying low and selling high (albeit most are), there are many different methods to help investors gain profit. In this article, let's learn about different methods of making money in the crypto market.
Spot investing or Hodl
Buy low sell high. Spot buying or Hodl is the most popular form of investment that almost every investor in the market uses. Buy and HODL (Hold On for Dear Life) strategy, which means that investors choose a coin, buy, and leave it until the token price increases multiple times to take profit. Many people think that this strategy is not effective because hodling spot, at most, only brings x2-x3 profit, so it’s not too appealing. However, history proves this to be a misconception. For example, an investor buys $1000 RUNE tokens (ThorChain) on May 16, 2020, 1 year later he will have $200,000 in hand. It is clear that hodling spot can also be extremely profitable if investors buy into the right one, at the right time, and hodl them for long enough.
It is also buying low and selling high, but trading is more complicated than that. The difference between HODL and trading is that in this method, investors can sell as soon as there is a profit. This strategy often requires investors to have good technical analysis skills and good discipline, in addition to good fundamental analysis. As for the trading method, many people seek financial leverage tools such as margin loans or futures contracts to get large profits. However, this can also be a double-edged sword, because large profits will often be proportional to high risk ratios.
Some investors use the scalping method but without leverage, and still get high results. For example, IchimokuDoc, a Twitter trader with more than 50,000 followers uses the Ichimoku indicator as a guideline for his trading method.
The most concise explanation of Staking is: Money breeds money. Staking is the act of locking your coin into a certain network and receiving rewards. There are 2 types of staking:
- Staking in the Proof-of-Stake consensus mechanism
- Regular staking for rewards
Basically, both forms of Staking are basically locking coins into a certain protocol, then receiving rewards. The longer you stake, the more rewards you will get. In addition, for some Launchpads or centralized exchanges, staking tokens on Launchpad or that exchange will give investors the opportunity to participate in early token sales such as IDO & IEO, which helps to bring great profit. Investors who apply spot buying and HODL method also often use Staking to increase their number of coins without having to buy and sell continuously.
Farming or Yield Farming is a popular concept in the field of decentralized finance (DeFi), and it really exploded after the birth of the Compound project. Instead of simply locking coins into a cryptographic vault and leaving it there, the coins locked in will be used as liquidity for the protocol and investors are the direct liquidity providers for that protocol.
The liquidity here can be used to lend, borrow, or trade on the protocol. Liquidity providers (or LPs) will get a share of the protocol's revenue, or in some cases LPs will receive additional native tokens of another protocol, which the LP can then use to continue farming, making the money generate even more money.
IDO becomes an extremely popular form of investment in 2021 thanks to the explosion of Metaverse and GameFi projects. The demand for crowdfunding from blockchain startups in the field of Metaverse and GameFi increased sharply while investors also wanted to buy tokens as cheaply as possible. IDO investment has become a great method to help both parties gain benefit.
IDO investing will be very appealing if you know how to choose, and with a little luck, investors can achieve a profit of up to hundreds of times the investment capital. Moreover, in some Launchpads, the condition to participate in the IDO round is staking the Launchpad native token. Therefore, investors can choose a potential Launchpad to invest, turning IDO investment into a 3-in-1 form: HODL coin, Stake, and buy IDO.
BHO Pad, BHO Network's new launchpad is one such product. Investors can invest in BHO tokens, stake on BHO Pad to receive APY interest up to 20% and have guaranteed IDO slots without having to rely on luck.
Published on April 16, 2022
Bitcoin plunges: A bust or a buy?
Cryptocurrencies that seemed to be defying gravity just weeks ago came back down to earth with a bump on Wednesday after a roller-coaster ride which could undermine their potential as mainstream investments
June 03, 2021
Crypto recovery is happening
Market shows signs of crypto recovery
July 07, 2021
Blockchain 101: What is blockchain, and how does it work?
Blockchain for beginners
July 10, 2021
Vietnam & Singapore to Negotiate on Digital Trade Agreement
What could this deal mean for investors in these two countries?
July 13, 2021
Familiarized yourself with crypto via these terms
Get started on your crypto journey with these terms!
July 14, 2021
How to do a referral?
3 simple steps for you to do a referral and earn an attractive commission!
August 25, 2021
What's the difference between CEX and DEX?
How well do you understand the two types of exchanges in the crypto markets?
August 26, 2021
Crypto terms you should know
Do you know what do all these terms mean in the crypto world? Part 2!
August 30, 2021