How to Invest in Cryptocurrency – Six Proven Ways

It’s been said that cryptocurrency is the best investment opportunity since the internet, and one can hardly dispute this.

Thousands of dollars are invested in cryptocurrencies all over the world even with uncertainties that investors will succeed with their investment.

To make sure you get the best return on your investment, it’s important to learn how and ways to invest in cryptocurrency properly, and how it works.

Of all investment options in cryptocurrency, trading wears the crown of popularity. But aside from trading different cryptocurrencies, there are other ways enthusiasts can invest in cryptocurrencies.

Bitcoin may still be on top of the cryptocurrency list, but there are many other opportunities in cryptocurrency that could bring big returns.

The trick is knowing where to look…

We’re not talking about just buying Bitcoin or Ethereum, which are already doing well, but other open opportunities in the crypto-space.

This topic will cover How to invest in cryptocurrency, other means aside from trading tokens.

How to Invest in Cryptocurrency

There are many ways to  invest in cryptocurrency. You can choose any one that best suits your interest and target.

Trading cryptocurrencies is what most people think of when they hear the term “ invest in cryptocurrency”.

It involves buying and selling digital assets in exchange for other assets or fiat money (USD, Euro, Yen) on an exchange.

Trading has a steep learning curve, but once you master it, you can earn a lot of money quickly, likewise, you can lose a lot more trading cryptocurrencies.

Means to Invest in Cryptocurrency

Investing in cryptocurrency is a lot more than Trading assets.

You can Invest in Cryptocurrency through different means using different strategies.

You can engage in Staking, Yield farming, Lending and borrowing, Domain flipping, NFT flipping, Taking part in ICOs, IDOs (initial coin offering, initial dex offering), and Mining.

These are all viable means of investing in cryptocurrency.

  • Staking

One of the most popular and profitable ways to invest in cryptocurrency is to buy it and keep it for a long time. This is called “hodling” – a portmanteau of hold and hodl.

But;

There is also another type of investing in cryptocurrency, called staking (aka masternode). If you don’t know, there are two types of cryptocurrencies: coins and tokens.

Coins are stand-alone cryptocurrencies that have their blockchain (e.g., Bitcoin) while tokens use the blockchain of other coins (e.g., EOS, which runs on the Ethereum).

Cryptocurrency staking is a process where you lock up your coins and earn interest on them. The more coins you stake, the more coins you earn.

In other words, staking increases your passive income, which is essential in such a competitive environment.

It’s more like you are putting your money in a kind of “savings account” where you earn a certain percentage of interest for “saving” your coins.

The cryptocurrency protocol that allows you to buy, sell and stake coins is called Proof-of-Stake (PoS).

The way PoS works is that it rewards people who have more coins than others with more blocks on the blockchain.

Not all cryptocurrency has a staking option, Staking is only available with cryptocurrencies that use the proof-of-stake model.

You must own a cryptocurrency that uses the proof-of-stake model to stake crypto then you can choose the amount you wish to stake.

When you stake, your coins are still in your possession, you can stake through many popular cryptocurrency exchanges.

Staking is a viable way to invest in Cryptocurrency, you can invest in cryptocurrency by buying and staking over a period and earning profit from your stake.

  • Yield farming

Yield farming is a new concept in cryptocurrency. It is the process of lending your coins to another person and getting a percentage of the interest they make on the coins you lend to them.

Yield farming is an advanced mining technique that can be used to grow the value of a cryptocurrency portfolio quickly and efficiently.

Yield is a word that is commonly used in cryptocurrency to “describe the income generated by an asset, based on its price movement.”

However, it can be applied to other things as well. The use of yield in this sense is a reference to the interest rate of a financial instrument or investment.

Cryptocurrency yields are attractive because they offer a way to make a profit on investments without having to do the work of mining or buying and selling coins.

It also allows investors to safely participate in the cryptocurrency market without needing to buy coins outright. Yield farmers measure their returns in terms of annual percentage yields (APY).

Engaging in Yield farming is a great way to invest in Cryptocurrency. The basic concept behind yield farming is that instead of buying and holding coins, you lend them out for interest.

  • Lending and borrowing

Lending and borrowing mechanism in cryptocurrency is new concept for most people. However, it has been gaining traction over the past few years.

Lending and borrowing refer to the process of lending cryptocurrency to someone or borrowing cryptocurrency from someone else.

This mechanism allows individuals to use their cryptocurrency holdings for a purpose that requires cryptocurrency other than their own.

For example margin trading, short selling, or simply as collateral for a cryptocurrency loan.

Lending and borrowing are not limited to fiat currencies and equities; it also refers to the process of lending and borrowing cryptocurrencies in exchange for interest.

Lending and borrowing in cryptocurrency are a little different from lending and borrowing in other traditional markets. In the cryptocurrency world, everything isn’t based on trust.

You can lend or borrow without needing to ask for collateral or even trust the person you’re lending to.

In Lending, you use your coins as collateral for a loan. For example, you borrow some money from someone using your bitcoins as collateral.

The lender has the option to sell your bitcoin if you fail to pay them back.

If you are looking for a profitable yet no-risk way to Invest in Cryptocurrency, lending and borrowing is good choice.

  • Domain flipping

Domain flipping has been around since the first dot.com days but it wasn’t until recently that people have started making money with it.

Flipping Domains is another proven profitable way to invest in cryptocurrency, Domain flipping is a way to make money in cryptocurrency just by buying and selling domain names.

Investing in Domain flipping means you make money through buying, selling, and reselling domain names. Domain flipping can be done by individuals or by companies.

Flipping domains can be a profitable business model and a great means to invest in cryptocurrency as it involves little risk and is a low-maintenance enterprise.

  • NFT flipping

A Non-Fungible token (NFT) is a cryptocurrency token that represents something unique. With NFT, each token is different from another.

It is not interchangeable with another token (like cryptocurrency). For example, a Cryptokitty is an NFT. Each kitty is unique.

You can’t trade one for another. The same concept extends to other crypto-collectables like CryptoPunks and CryptoCelebrities.

Because they are unique and have their own identity, they can be traded individually, instead of as a single unit.

NFTs have other properties that make them unique. For example, you can combine two different NFTs and generate a new one with a special ability.

 

These abilities can range from special visual effects to a change in gameplay.

For example, you could combine an armour NFT and a sword NFT to obtain an outfit that has damage resistance along with fire resistance.

NFT flipping is a great way to earn in the cryptocurrency space.

The concept is similar to the stock market, but in this case, you are investing in unique digital assets, instead of stocks.

These unique assets are non-fungible tokens or NFTs, which take the form of crypto collectables.

The most popular NFTs right now are crypto kitties, but there are many others such as dapper kitty, betoken, and EOS Knights.

These crypto-collectables can be bought and sold on exchanges, which is not unlike cryptocurrencies like Bitcoin and Ethereum.

  • Mining

Cryptocurrency mining is the process by which new transactions are added to a blockchain. This activity is called mining because it involves finding blocks of hash data through computing power.

As cryptocurrencies become more popular, the difficulty to mine them becomes more and more important.

People can mine crypto coins because they have computers that are always connected to the internet.

They can solve the mathematical puzzles needed, and get paid in coins for their work. This is very interesting because you get to earn as you solve issues.

A good cryptocurrency miner is a key investment for staying involved in the crypto community. The cost of mining equipment can be high, but there are ways to reduce that cost, like mining with a group.

You can also try mining multiple currencies or setting up a mining rig. The best mining rigs are built with quality components to maximize profitability and longevity.

When choosing your rig, you should also consider if you want to mine solo or join a pool.

Cryptocurrency mining is a good way to invest in cryptocurrency and earn from the system, the requirement is quite high but the profit is worth it.

  • Taking part in ICOs and IDOs

Initial coin offerings (ICOs) are used by start-ups to raise money for their company by issuing their cryptocurrency.

An ICO is similar to an IPO, but it uses cryptocurrencies instead of fiat currency. Initial coin offerings (ICOs) are a great way to raise money for a startup company.

The amount of money that companies raise from ICOs is exploding—a trend we expect to continue in the future.

They are so popular that over 2 billion dollars were raised through ICOs in 2017 alone. With ICOs start-ups can easily raise capital for their new business ventures.

Start-ups can create and distribute tokens that investors can buy with cryptocurrencies like Bitcoin or Ethereum.

Investors then hold onto these tokens that can be used on the services of the company doing the ICO, or they can sell them on cryptocurrency exchanges.

Also, Read

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10 reasons why you should invest in cryptocurrency

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10 Frequently Asked Questions About Cryptocurrencies

Wrapping up how to Invest in Cryptocurrency

With so many different ways to invest in cryptocurrency, it can be hard to know how to get started. If you want to invest in cryptocurrency, it’s important to do your research.

Decide on which opportunity best suits your interest, study their requirement and how to scale your profit before spending a penny.

This article has provided you with some useful tips and means that will help get you started. We hope that this has been helpful.

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