Over the years, cryptocurrencies have enriched quite a lot of people.
It is dubbed the “future of money,” and as such, anyone who cares about the future should get involved.
So, you’re new to crypto and want to know how to invest in it wisely?
In this post, I am going to take you by the hand and walk you through 9 ways to invest in crypto for massive gains.
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9 Easiest Ways To Invest In Crypto
They are:
- Buying Cryptocurrency
- HODL
- DCA
- Passive Income
- Investment DAO
- Trading
- Crypto ETFs
- Affiliate Program
- Accept Crypto Payments
1. Buying Cryptocurrency
The first step to investing in crypto is to buy one.
But before buying a crypto asset, there are lots of things to consider.
Some supposed expert traders will tell you not to exceed the top 10 cryptocurrencies by market cap.
However, it may not be the best advice.
For instance, the LUNA coin, which was formerly the 8th most valued crypto, plunged to number 200+ in just a few days.
The truth is that gem coins can be found even in low market cap coins.
Nevertheless, the best way to know which crypto you should invest in is by conducting your research.
Another difficulty newbies face when making their first bold move to invest in a cryptocurrency is choosing a crypto exchange.
There are a lot of shady exchanges out there. If you don’t want to fall for one like the Kringles.exchange, I advise you to use these reputable ones.
[Suggested Read: How To Spot A Gem Coin – 6 Legit Ways!]
2. HODL
If you have followed the crypto space for a while now, you must have heard of the word HODL.
HODL means that you buy a cryptocurrency and forget it.
By forgetting it, I mean that you do not have the intention of selling it any time soon.
Hodling is one of the most profitable ways to invest in crypto.
For instance, if you bought Bitcoin in 2019 and you held it up till today, my oh my!
Despite the bear market, you still have huge profits.
In April 2019, Bitcoin was worth roughly $8,000, but it is now worth around $28,000 (May 29, 2022). That’s a $20,000 profit!
Interestingly, Bitcoin has traded far above this price, but not until the bear market crept in.
But that was Bitcoin, right? Some other coins have, however, fallen from their glory to their demise.
If you decide to HODL a coin, make sure you are only acquiring coins with potential.
3. DCA
While some people simply throw some money at a coin and hodl it, others are strategic about how they buy a coin with the same intention of hodling it.
DCA stands for – Dollar-cost Averaging.
It is an investment strategy in which an investor buys an asset, say BTC, with a fixed amount of money at regular intervals, regardless of the coin’s price.
DCA is an excellent strategy you can adopt if you want to hodl a coin.
Here’s an example:
Say you want to invest in Bitcoin and hodl it for 4 years.
Instead of buying ₦100,000 worth of Bitcoin or 1 BTC all at once, you can apply the DCA strategy.
You can decide to buy ₦20,000 worth of BTC every month, irrespective of the price, for 4 years.
At the end of the 4 years, you can now sell and withdraw your money.
Another example:
Let’s say you want to invest ₦600,000 in Bitcoin for a year.
Instead of investing the entire ₦600,000 at once, you might divide it up and invest ₦50,000 each month.
The reason why DCA is a very nice strategy is that it helps an investor manage his risk and buy at the best price possible.
Binance and LUNO are two popular exchanges that offer the DCA strategy as a service.
Read more about the DCA strategy here.
4. Passive Income
No doubt, hodling is a great investment strategy.
But what if I told you that you could generate money from your holdings even while you sleep?
I will share with you four ways to generate passive income on your holdings.
a. Staking
Staking simply means committing your asset to a network so it can be used to validate transactions and earn you more coins in return.
To participate in staking, you need a POS coin (Proof-of-stake) like ALGO, ATOM, etc.
However, some platforms like Binance allow you to stake POW (Proof-of-Work) coins like BTC and ETH by locking them for passive income.
[Suggested Read: Cryptocurrency Staking Types – Which Is The Best Option For You?]
b. Yield Farming
In yield farming, you deposit your assets into a liquidity pool to earn part of the fees collected from traders who are making use of the pool.
A liquidity pool is a secured large crypto fund, that is used for swapping or lending and borrowing in DeFi.
You can visit a DeFi platform like PancakeSwap and make passive income off your holdings through yield farming.
c. Lending
Just like you lend your money to someone on interest in real life, you can do the same with crypto.
As a hodler, you can lend your coins to borrowers and earn interest.
Compound, Dydx, Aave, and Celcius are some of the platforms that allow you to lend out your crypto to borrowers at an interest rate.
Then there is also Margin lending.
Margin lending allows you to lend money to traders that use leverage (that is additional money that is not their own) at an interest rate.
Crypto exchanges like Binance and Kucoin allow you to lend money to such traders.
d. Dividend token
Another way to generate passive income from your holding is to consider buying dividend tokens.
Dividend tokens offer holders a fraction of the revenue generated by the company that issued them.
An example is Tenset, where 1% of every transaction is distributed to holders.
5. Investment DAO
The simplest way to explain Investment DAO is this:
Imagine it to be a group of people that collectively look for potentially-profitable early crypto projects and invest in them for a massive profit.
It is more like an investment club.
So, you can form an investment DAO with your friends who share your interests.
However, for beginners, creating a standard investment DAO may be a hard nut to crack.
The reason is that it requires some technicalities, like creating a community wallet, a token, and a voting system.
Except, you are creating a non-standard one, whereby it is a small group and they trust one person to distribute their share of the investments equitably.
Here is how to start an investment DAO.
6. Trading
Trading cryptocurrencies simply means that you are buying and selling cryptos for a short-term profit. That is, you do not have the intention of hodling.
Cryptocurrency can be traded in a variety of ways, including:
a. Spot Trading
With Spot trading, your intention is to buy an asset, say BTC at a low price, maybe at $28,000, and sell at a high price, maybe, $28,500.
b. Margin Trading
Margin trading is trading with leverage, as we have discussed earlier:
Traders borrow money from an exchange to increase their capital for more profit.
c. Futures Trading
In futures trading, you are predicting the price movement of an asset.
The difference between futures and spot trading is that in the former, traders buy a derivative contract instead of the cryptocurrency itself.
Also, spot traders only profit when the price of their assets is increasing.
Futures traders, on the other hand, can profit even when the price is increasing or decreasing.
Now, the thing with these methods of trading crypto that I have listed is that you must be familiar with technical analysis.
This is why we developed a course that teaches you how to conduct technical analysis.
Visit CTmastery.com, to gain access to this course.
d. Lastly, P2P
If you are in a country like Nigeria, the only way you can buy crypto with fiat (your local currency) is through P2P trading.
P2P trading is a type of trading in which traders buy and sell cryptocurrency directly with fellow traders on an exchange.
You can profitably invest in crypto by becoming a P2P vendor who sells crypto to people for fiat (buying low and selling high).
In the remaining part of this article, I will share how to invest in crypto without actually buying one.
[Suggested Read: Crypto Trading Types – Which Is The Best Option For You?]
7. Crypto ETFs
One of the ways to invest in crypto without buying crypto itself is to buy a crypto ETF.
What is an ETF you may ask?
ETF stands for Exchange-Traded Fund. They are investments that track the price of an asset or group of assets that a company holds.
When you buy an ETF, you are buying a share of the company’s portfolio and not the asset itself.
For instance: 10SET is an ETF that holds multiple cryptocurrencies and stocks. If you buy 10SET, you gain exposure to all these assets.
MSTR, BITO, BITC, BITQ, etc. are other examples of crypto ETFs.
However, keep in mind that ETFs are also volatile; their value is determined by the performance of the assets they track.
If you’re unsure which crypto to buy or don’t want to invest directly in crypto, investing in ETFs may be the best option.
8. Affiliate Program
If you want to invest in cryptocurrency without using your own money, affiliate programs are the way to go.
An affiliate program is a type of marketing strategy in which companies pay you to refer customers or promote their products.
Crypto exchanges like Binance pay a 50% commission to affiliate marketers every time a referral completes a trade.
The best way to maximize the benefits of an affiliate program is to have a blog, a YouTube channel, and other social media channels.
9. Accept Crypto Payments
Accepting cryptocurrency payments for your business is another way to invest in crypto without actually buying it.
And, come to think of it, that’s precisely why BTC was created; as a digital payment currency.
Consider this scenario:
As a freelancer, you charged a customer $100 in BTC, and just as you were ready to withdraw it for fiat, the price of BTC skyrocketed, making your $100 worth $150.
Interesting, right?
A payment gateway like Paychant allows businesses in Nigeria to accept Bitcoin and get settled in their bank accounts.
However, you should be aware of the risk: cryptocurrencies like BTC and ETH are volatile, and a drop in their value would affect your payment negatively.
If you want to accept crypto payments but remain safe from volatility, you should opt for stable coins instead, especially in a bear market.
For instance, Lazerpay is a payment gateway that lets businesses accept payments in stable coins alone.
Additional Crypto Investment Tips
Keep these 3 crypto tips in mind.
- Always invest wisely
Cryptocurrencies are volatile. Only invest money that you can afford to lose.
Also, you should not invest the money that you intend to pull out in a hurry.
For instance, it is not wise to invest your house rent in crypto and intend to pull it out when rent expires.
- Learn to diversify
As a holder, it is wise that you split your crypto investment into different coins.
Instead of investing solely in Bitcoin, you can divert part of your investment into other coins like DOT, LINK, and so forth.
However, make sure that they are solid projects.
[Suggested Read: How To Know If A Token Is Worth Your Money | 7 Key Questions To Ask]
- Do not trade with emotions
Do not invest in a coin because of the hype on social media.
Always conduct your own research before investing in a coin.
Scroll down and we will call it an end!
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Conclusion
This is the end of this post.
I am sure I have given you all the pro tips you need for a successful crypto investment.
Now, before you leave, I will like to hear from you:
Are you a crypto newbie and did you find the post helpful?
Which investment strategy do you prefer?
Do you have further questions?
Share your thoughts in the comments section.
And remember to share this post with your friends. Thank you!
Honestly, you are simply the best.