Development Director of the EXMO crypto exchange Maria Stankevich told where to look for tokens immediately after their release, and what risks the strategy for purchasing such assets carries
The opinions of experts may not coincide with the position of the editors. RBC-Crypto does not provide investment advice; the material is published for informational purposes only. Cryptocurrency is a volatile asset that can lead to financial losses.
The other day we observed the cosmic growth of the Toncoin coin after Pavel Durov wished the altcoin development team success and noted that the project has everything necessary to create “something epic.” The cost of the Toncoin token increased by 20% in 15 minutes, exceeding $2.7.
If you regularly follow such coin “pumps” caused by such statements or tweets, you can make a profit from this. Moreover, after growth there is a rollback to fair value, and you can also benefit from this.
The earning scheme itself is simple: at the beginning of growth, buy, at the end - sell or short. If everything is done correctly, then in a day you can make a plus of 10-20% to your capital. Then wait for the fall and buy again. And so on in a circle. It’s possible to double or triple your capital in a month.
Sometimes a cryptocurrency may not be new at all - for example, Dogecoin is a joke cryptocurrency that was released in 2014. Its symbol has become an Internet meme - the Doge dog. It is actively promoted by Tesla and SpaceX CEO Elon Musk on his Twitter. Against the backdrop of its support in the first half of this year, Dogecoin rose in price by almost 8000%.
Investments suitable for beginners
You can join different chats, groups, verified crypto communities, receive different buy signals from there and simply hold the coins until you receive a certain profit. Here you don’t need to be a pro in cryptocurrencies, just understand the basics of cryptocurrencies and blockchain, and how to work on exchanges. The main thing is to follow the rules of safety, diversification and take advice and recommendations from truly experienced analysts.
The only negative is that you will not receive quick and constant income. This type of income is a long game, so it may not be suitable for many people. However, in the future, you will thank yourself for starting to invest in Bitcoin and cryptocurrencies.
What risks might there be?
Before talking in detail about the possibilities of making money on cryptocurrency, I would like to once again emphasize the associated risks. Remember, any transactions with money and investments (even in ordinary shares) are always a risk. You could lose all your money invested in cryptocurrency. For example, you may have been unlucky or did not follow safety rules when working with cryptocurrency.
From the start of working with cryptocurrency, it is recommended to adhere to the rule of diversification. You can read more about diversification and security rules in cryptocurrency in one of our previous articles. Diversification is sharing your money. If you are a complete beginner, then allocate only part of your free money to cryptocurrency.
So that, if something happens, you do not remain bankrupt.
Remember one simple thing. Cryptocurrency, like absolutely any other investment, can make you money, but it can also take it away.
A striking example
In 2017-2018, Bitcoin reached its peak positions, and someone was buying it right before the hard drop at $18,000. After Bitcoin fell by $3,000, inept investors sold it, thereby receiving colossal losses. And those people who simply waited until 2022, when Bitcoin reached $67,000, made a profit of almost 400% in 4 years. 100% per year is a very pleasant profit.
Hodling
A popular option for long-term investment. In the long term, any market grows, but the development of trends is cyclical, with corrections. In trading, it is difficult to avoid account drawdowns, because small market movements in historical retrospect are used for trading. But if you buy an asset and hold it, for example, for several years, then the likelihood of further growth is more likely than a fall. At the same time, you can ignore sharp, large movements against the trend, and hodling allows you to avoid such daily turmoil.
It is better to choose reputable cryptocurrencies for hodling, with a high market capitalization - Bitcoin, Ethereum, USDT and the like. A weak currency may simply cease to exist after a few years, causing the investor to lose money. The amount of profit can reach tens and hundreds of percent when hodling.
The Bitcoin chart (BTC/USD) shows that even in less than a year, with deep drawdowns, the cryptocurrency is growing, forming new peaks.
What do you need to start and earn Bitcoins?
The first step is to create a storage for your coins - an electronic wallet . You can register on exchanges, download applications to your phone, the easiest way is to register on Blockchain.com. The site has been translated into Russian, a reliable and high-quality service for storing various cryptocurrencies:
Registration will take a couple of minutes, then you will be taken to your personal account. Balances for several popular coins are presented there. By selecting any cryptocurrency and clicking the “Request” button, you can see your wallet address:
It is this that will need to be indicated on different sites in order to receive payments. If you use all the security settings, your assets will be reliably protected on this site. You can create a wallet in any other service, there are many of them, the main thing is not to forget about scammers.
Mining
It is undergoing significant changes today. Bitcoin and the altcoins modeled after it use powerful computing systems to produce new blockchain blocks. Such equipment consumes a lot of electricity and costs a lot. Thus, one of the latest ASIC models AntiMiner-19 in China can be purchased for around $2,000; delivery of 16 kg will not be cheap either. Against the background of the recent reduction in the size of the reward for each collected block in the Bitcoin network and the gradual rise in the cost of electricity, it is worth starting here at a price of 1 BTC at the level of $18-20 thousand. Although after the price of the first cryptocurrency rises, the cost of equipment can also increase significantly, as has already happened. Mining enthusiasts can consider platforms with PoS and DPoS algorithms to make money. where the assembly of blocks is carried out due to the activity of users in ongoing transactions.
Are there any other ways to earn money?
Any method of earning money that I described in this article can be both profitable and unprofitable. It all depends on the right strategy that a person has chosen.
However, trading and mining are a rather difficult option for a beginner to make money on cryptocurrency. But investments alone may not be enough, because we should adhere to the principle of diversification, and we cannot invest all our money in one way.
In the second part of the article, I will talk about three more options for making money on cryptocurrency. And they are well suited for both beginners and advanced users. In order to get a complete picture of all the popular ways to make money, I definitely recommend reading the second part.
