Cryptocurrency has become more and more popular in recent years. The world has been slowly shifting to cashless transactions that are being done over the Internet, more so in 2020. The emergence of cryptocurrency is one of the prime examples of this shift.
The decentralized nature of a cryptocurrency’s network makes it an attractive type of currency for traders and investors alike. This decentralized network ensures that each transaction is secure and protects both the sender and the receiver.
With all this information, are you thinking about trading crypto for a living? But first, ask yourself this: How much can I make trading cryptocurrency?
Why Trade Cryptocurrency?
The first cryptocurrency, Bitcoin, was developed in 2009. The goal was for people all over the world to be able to exchange money and perform transactions without a third-party regulator. This paved the way for performing money transfers at very low costs.
One keen advantage of using Bitcoin, or any type of cryptocurrency, is that the transaction can be performed within minutes of activating it. This contrasts with online banking transactions and wire transfers, which can take up to several banking days before a transaction is deemed successful. Thus, Bitcoin is a much faster and more efficient solution.
Combined with a decentralized network, cryptocurrency also makes use of a distributed ledger where all transactions are recorded and viewable to the public. Thus, cryptocurrency further makes each transaction safer for all parties involved.
After the emergence of Bitcoin, altcoins have already entered the cryptocurrency world, some of the most popular including Ethereum (ETH) and Litecoin (LTC).
How Much Can I Earn by Trading Cryptocurrency?
Now on to the most important question: How much can I make trading cryptocurrency? How can I earn by trading?
Cryptocurrency is such a volatile market that you can either experience a profit or a loss, every single day! When the market is high, you will be able to make $100 a day trading cryptocurrency, even as a beginner.
Because of this volatility, the cryptocurrency market is high-risk. Compared to the stock market or the foreign exchange market, cryptocurrency has a higher risk, but also a higher pay-off if you are successful.
Trading cryptocurrency is not easy, and you are not guaranteed of always making a profit. For example, from 2017 to the 3rd quarter of 2020, the value of Bitcoin increased over ten-fold, from $1,000 to more than $10,000. If you had purchased Bitcoin back in 2017, you would be making a solid profit by 2020.
In contrast, Ethereum also gained value, reaching 35 times of its original value during the same period. In 2020, it is already valued at over $350. If you acquired Ethereum for $10 back in 2017, by 2020, again, you have gained a profit.
Active Trading and Passive Trading
Trading cryptocurrency must sound very tempting by now. Who wouldn’t want to earn more than 35x over a span of 4 years?
Again, you need to go back to one of the basic facts about cryptocurrency: It is a highly volatile market.
Let’s say you can earn 5% on your investment in cryptocurrency in a span of one month. Sounds good? Here is where the risk comes in. That possibility of earning 5%, is also a possibility of losing 5%. It all depends on how stable the cryptocurrency is during that one-month period.
It is up to you to weigh the risks involved when trading crypto for a living. A good way on how to weigh these risks is by learning about the two ways to trade cryptocurrency: active trading and passive trading. Check out the differences below.
Active trading is directly associated with day trading of cryptocurrency. This means trading within the 24 hours of a single day. This will require you to constantly check the movement of the cryptos you are investing in.
The volatility of the cryptocurrency market makes it harder to predict. You can either make a small profit within 24 hours or experience a loss. Generally, if you are interested in day trading cryptocurrency, you will need a significantly larger amount of money for this short-term investment.
If you have around $10,000 and you are prepared to invest this money in day trading, go for it. Just be sure that you are prepared for the small losses that may come.
Before getting into day trading cryptocurrency, you will need to study the market for quite some time and learn trading strategies to see if day trading is the way to go for you. If you find that it is, you can easily make $100 a day trading cryptocurrency.
Passive trading is like a long-term investment, although in cryptocurrency, long-term can mean any period from a few weeks, to a couple of years. Since the value of cryptocurrency will still be increasing in the foreseeable future, passive trading can earn you a profit.
This way of trading will require you to invest in the cryptocurrency of your choice – be it Bitcoin or any altcoin – and leave it for a few weeks, months, or even years.
If you have asked yourself, how much can I make trading cryptocurrency? Well then, with a little patience, passive trading is a good option for you to earn significant profits. Learn more about trading cryptocurrency here!
How much can I make trading cryptocurrency? When trading cryptos, you can very well hit the jackpot especially with the volatile nature of the market. This volatility means sudden price increases and sudden drops. The way the prices of cryptos swing is incredible to watch.
A profit of 10% to 20% is highly possible, if you know what you are doing. Remember, although you can earn a significant amount from your crypto investments, you can also experience a loss.
The key to success is choosing the right trading method that fits your budget and lifestyle. Do not skip on studying the different cryptocurrency trading strategies that will help you make your investment worthwhile.