Bitcoin and alternative digital currencies offer us many opportunities to earn money. The technology of the blockchain brought us Bitcoin almost 10 years ago. Since then many different cryptocurrencies have emerged. There are currently just over 1500 digital currencies. These projects that are still in development are intended to be of great use in our daily life in the not so distant future. At the same time that these projects are advancing and that blockchain technology is consolidating, numerous business models are being created which have a direct relationship with this new way of exchanging assets through the Internet. People who manage to position themselves in these early stages of cryptocurrency evolution as an asset will probably see how their effort or intelligence as investors will give them a reward in the future. Here you can get more detail.
Methods to earn money with cryptocurrencies
There are different ways to earn money with cryptocurrencies. Some have more risk, others need a strong capital investment and others require more time and effort. Being a very young market that is still at a very early stage, the value of this technology is very volatile and very speculative. Investing in cryptocurrencies is a high risk business. Never ask for loans to invest. Deposit in cryptocurrencies or in any other asset or speculative market only money that you can afford to lose or that you will not need in your daily life. Next we will analyze all the ways that a small investor has to try to increase their capital with this new market full of risk but also of opportunities.
The “holders”, within the terminology of the crypto world, are those investors who buy cryptocurrencies and keep them. It would be the equivalent of lifelong savers. The role of these people is very relevant within the cryptocurrency market. The fundamental reason to think about accumulating digital currencies in the long term is that they are deflationary.
If you are familiar with Bitcoin, its origin and its characteristics you will know that in its code it is written that there will only be a maximum of 21 million of these digital currencies. It is established in its protocol, therefore, that it is a scarce asset and that is why many people buy and store Bitcoins with the sole purpose of waiting for it to revalue in the future. When this technology is implemented in people’s daily life, demand will skyrocket, but supply will be limited, that will cause the price to rise tremendously.
Cryptocurrencies as a reserve of value over time
Even if Bitcoin fails to cost hundreds or millions of dollars as many analysts think, the simple fact that it is an asset whose offer is limited is already attractive to saving investors, who find in cryptocurrencies an alternative to precious metals to have stored and diversified its capital.
To be a holder it is crucial that you invest only money you do not need. The fluctuation of the market can get you into losses or generate nervousness if as an investor you see that the price of Bitcoin or another cryptocurrency falls a fairly large percentage according to the price at which you initially bought it. Authentic Bitcoin holders are accumulating more and more crypto and do not worry about its value with respect to FIAT currencies. They trust this technology in the future and sleep peacefully knowing that in 5 or 10 years Bitcoin and the Altcoins will be worth much more than they are worth now for their intrinsic characteristics.
Traders are those people who use their financial knowledge to make money with market fluctuations. Unlike the holders, they do not store cryptocurrencies while waiting for them to revalue in the future, but they study the price situation, look for an opportunity, enter the market, and then leave when they have obtained a profit or assumed a loss. They are therefore investors who are not continuously within the market, and who do not marry any cryptocurrency. They enter to invest in a project when their analysis tells them that it will increase its value and sell when this increase has occurred.