There are three ways of making money in crypto: mining, trading, and investing. Here in Tradersdepth, we’ll explain each one for you. Keep on reading to find out what way will fit you as you get into the world of crypto.
Mining has been the backbone of cryptocurrency since day one. However, nothing is as easy as lying in there and watching your profit grow. In 2012, crypto mining would be an ideal place to start crypto. However, the cons of crypto mining proves that it’s not worth it.
The most common principal con of crypto mining is that it’s expensive, and that’s just an understatement. It is so expensive, and you should just invest in crypto if you have the money for it. Another is that when you create a rig for mining, it wouldn’t just cost expensively. You need to know what you are tactically doing to execute your plans properly.
Besides that, a crypto mine is not a one-person project. If it was, it would be a huge task for that individual to maintain many GPU rigs for the crypto mine. Even one high-end GPU for a PC is expensive. It will take more than one person to operate a rig 24-7, or it malfunctions.
Why isn’t mining worth it? Easy. Logistics. It would be nice to think of mining crypto as a profitable venture on paper. However, the allocation of land, the cost of electricity, and the setup of the rig you’re running is huge factor for earning profit.
So, if you’re low on savings, just like most of the people, we highly advise not to consider mining as the first investment option for crypto.
Now that we have set mining and its logistic problems aside, we can discuss the difference between a Crypto Trader and a Crypto Investor.
Only one term separates a Crypto trader from a Crypto investor: “risk appetite.” A crypto trader and a crypto investor can be one person. However, both have different behavior in handling their money.
How? For one, a crypto trader is always on the nose when a specific value of crypto increases drastically. That’s when they mostly invest and convert their money. Furthermore, once they’re done, they’re off to their next pursuit. It’s always a high-risk, high reward situation for a trader’s career in finance when using cryptocurrency as their backdrop.
Also, a trader is more of a spontaneous investor. They are the ones who are preparing for a surge on a crypto trading platform when a specific crypto increases in price. On the other hand, investors would calm down and HODL (hold on for dear life) if they are stable enough when the crypto value depreciates.
Traders are the go-getters of the crypto market, and some of them earn from taking several leaps of faith before growing into Crypto Investors.
Traders are good because they always have ways to rise to the occasion. Most of them look at crypto as a temporary parking space and invest in other things before becoming permanent investors. So, they would dabble in stock, NFTs, and trading niche items like Air Jordans or expensive Magic The Gathering Trading Cards.
These are the ones you are looking for future crypto investors because they are likely to become one gradually. If you did not read the explanation, it’s summarized in two words. Short-term.
Investing correlates trust with a certain cryptocurrency that the investor would take the risk on. Or, they would make that specific investment and watch the long-term growth of the specific stock.
A key term that crypto investors look forward to their long-term investment is “Appreciation.” Once their small investment grows rapidly, they cash it out and create stable investments. They would trade an investment easily, but if they land a Stablecoin like Bitcoin, their investment will stay there for a long time.
Their gravitation is that Bitcoin is on a constant appreciation amount, and it takes a small risk appetite to operate in big names in cryptocurrency.
A Crypto Investor’s goal is to grow their money in small scale cryptos with the lowest crypto trading fees and preserve it to increase their funds. Once they create a stable amount for big names like Bitcoin, Ethereum, and Binance Coin, they will maintain it there.
Crypto investment, especially in stable coins like BTC and Ethereum (ETH), will keep appreciating long-term growth over time. Because of the continuous investment of the majority of the crypto crowd on them.
Regardless of whether you’re a trader or an investor, it is important to take note of the principal idea to save your investment. Remember that money can be just money, but the essentials are integral for life. Therefore, when getting that huge spike from trading or investing, you should create an emergency fund bank account so you won’t regret everything else.
If we missed anything, leave a comment below. Check our blog for more content about cryptocurrency trading.