How can you actually make money with crypto coins?
Bitcoin and all those other cryptocoins (Altcoins / Alts) ...
Still only by buying and selling them for a better price?
No, there are more options, which you can even combine to make even more profit .
We are happy to explain to you which ones there are and how they work.
And we also tell you right away which coins you need, on which platforms you can best apply the techniques and how you can manage risks.
Okay, let's start with the easiest way to get started with crypto: buying and selling it. Just say the most famous method. You buy coins that will hopefully increase in value over time, and at some point you sell them again with a nice profit. A nice strategy that enthusiasts also call HODL.
No not "hold", as in hold, but even HODL which stands for "Hold On for dear Life". Cryptocurrencies fluctuate quite a bit in value and that does strange things to people. If your investment fluctuates between 14% loss and 9% profit in 1 day. Can just happen. Be aware of this.
The correct approach here is therefore the long term . And in the crypto world we mean a market cycle of 4 years. Only then can you actually say something meaningful about a price trend and a prediction.
By the way, they are only positive , regardless of which connoisseur or expert you listen to. Although more and more people know and own crypto, its real use is still very minimal. So there is still a lot of room for that market to grow.
For example, people are not discussing whether Bitcoin will increase, but whether its future value will be $ 188,000, $ 300,000, $ 500,000 or even $ 1,000,000. And the price has never been higher than roughly $ 15,600!
Where do you prefer to buy your cryptos? With the best crypto broker of course, and that is Litebit . Especially for beginners. A reliable, experienced Dutch party. You can pay with iDeal or possibly with another option of your choice and safely store all coins at Litebit in their own wallets.
But which coins should you choose? We help you with our article 10 best crypto coins to invest in . Make sure that you build a diverse portfolio with multiple coins and at the same time stay away from the small, vague and unknown coins.
You can also combine this way of investing very well with option 4 and possibly option 6 to also make a profit in the meantime, regardless of the value changes.
Are you more of the short term? Then trading coins could be something for you. This means that you will try to respond to the price fluctuations that take place on a daily or even hourly basis.
Still buying low and selling high, but with less predictability and added stress. Just like a day trader on the stock market.
But precisely because there is so much volatility in the prices of all currencies, the potential is greater. Both up and down, of course. You do not do this via a broker, but via a crypto exchange. You then have more options to trade and enter orders and pay lower transaction fees.
The best and also the cheapest crypto exchange , that is Bitvavo . Also just a Dutch company where you can simply pay with US dollars via iDeal. They have a wide range of the most important crypto coins in which a lot is invested and traded.
Is trading not earning fast enough for you? Then you can always opt for contracts-for-difference trading. Called CFD trading with a nice abbreviation. There are some advantages to this.
Firstly, that you do not have to buy the underlying asset, but only “bet” on price movements. That means that you can trade in many different instruments , from stock prices to crypto, but even gold, oil, FOREX and ETFs.
Second, you can work with leverage . With that you can make up to 30 times as much profit on the same investment. So if you trade with 100 US dollars, you make the same profit as if you had 3000 US dollars.
So you can potentially make a lot more profit , but also suffer more loss don't forget that. Very attractive if you know what you are doing. Also remember that an advantage here is that you can create a free practice account to learn how to invest. So you can first practice without immediately putting in your own real money. Read more on our page about CFD trading .
We briefly referred to this method earlier in this article. Especially because you can combine them nicely. If you have crypto coins you can get interest on this, even without doing anything.
Not so much interest as on a savings account, because you do have to make your coins available to participate in the underlying blockchain, but you can have that arranged by platforms. And then you just get more than 10% interest on an annual basis! That's better than the bank you don't pay?
The platform we recommend for this is Bitvavo . Of the 50+ coins that you can buy, you can use 14 for a strike. All you have to do is tick a box indicating that your coins are available for strike and your rewards will be automatically deposited into your wallets.
They are 14 very different coins by the way. Including some of the most promising crypto coins with a future . You can therefore expect that in addition to the profit in interest, the value will also increase.
Curious about the technical effect of a strike? Then read our article about crypto strike . In it you will also find an overview of how much interest you receive on the different coins.
Okay, we are also going to try to explain this easily: where some coins make their blockchain work by staking, is the original concept of Bitcoin mining. This works with PoW (Proof-of-Work) instead of PoS (Proof of Stake). Slightly safer, but much more difficult. And it takes a lot more energy.
PoS is actually also an improvement of PoW to solve this energy problem. You have to see it this way: there are companies that build entire power plants or install solar energy fields in deserts to generate enough electricity to mine for Bitcoins.
The reward is that you get new coins that you can sell again. But as you will understand, this is technically very difficult , a very large investment is needed to even start and the chance that you can get between the established parties is very small.
For a layman, there is actually little difference between crypto staking and a masternode. But technically there is. It's basically a combination of staking and mining.
And where a masternode has just a little more security, it is technically much more difficult and you cannot simply “turn it on” in your wallet at a broker.
Firstly, you often need to have a good number of coins to participate. The first coin with masternodes for example DASH, you need $ 68,000 in coins for that! And you have to make it available via a VPS. No, not a VPN, a virtual private server.
So you technically need to have a lot more resources to build this and then a lot more power in digital currency. But the downside is that the reward can be much higher, and therefore much higher.
An ICO stands for Initial Coin Offering. In other words, a new crypto coin that does not yet exist but they would like to launch. They need money for that. And if this succeeds, you as an investor are the first to receive the coins.
There are many coins to increase the ICO explosive in value, so there is often too much to do. But unfortunately there are also examples of coins that did not have this success and even ceased to exist completely. Sometimes even because it had a fraudulent intention.
Think of it as investing in a start-up company, or rather a start-up with a good idea, but nobody really knows whether there is a market for it and whether the product will work at all. Maybe it's the new Google or Apple, but maybe it's not. That is a considerable risk.
Cryptocurrency is a fancy name for digital currency. It once started with the introduction of the Bitcoin. The inventor of this wanted to find a way to transfer money / make payments without the intervention of a third party, a bank. It is not entirely coincidental that this idea arose at the beginning of the banking crisis in 2008.
The advantage of not having a bank as an intermediary is that there is much less risk. The bank does not keep your money, but you do that yourself. The bank cannot go bankrupt and you lose your money. But there are also no waiting times, no transaction costs and no government that regulates (nor can collect money / tax). Also, your identity does not have to be disclosed and payments can be anonymous Demorei.
While the origin of the term currency (currency / money) makes sense, "crypto" comes from the way these coins are secured. All transactions with cryptocurrencies are encrypted and stored using advanced cryptography, which makes it unhackable.
Partly because of all these advantages, many people think that real money will eventually be replaced by crypto money. Not surprising, but probably a distant future ...