Good day friends! The topic of today’s release is cryptocurrency investing and trading. I will tell you which is more profitable – holding or trading bitcoin or another coins? We will also talk about the types of passive earnings on digital money and what are the differences between an investor and a trader. Let’s get started!
Hold or Trade Bitcoin?
The debate over whether to just buy and hold Bitcoin or trade it has not subsided for more than 10 years since the creation of the world’s first cryptocurrency. Most argue that if they just bought and stored BTC, they would have made thousands and even millions of dollars. And this is true if you bought Bitcoin cheap, say at least in 2020 at 6000 USDT per coin.
And at the moment (March 26, 2021), they could have sold it at a price of $ 52,000! A huge difference, isn’t it? Perhaps Bitcoin will go even higher and reach $ 100,000 per token. Nobody knows. Therefore, if you are ready to wait for a long time, from 6 months to several years, you can buy BTC and forget about it.
The disadvantage of this approach is that you freeze your money for a long time and it is not a fact that Bitcoin will grow rapidly as before. Perhaps it will fall, as it fell in 2018 from 18,000 USDT to 3,500 USDT. In this case, you will have to wait even longer. If you trade Bitcoin, Long or Short, then no matter how much it costs, the main thing is to fix the profit (Take Profit) or loss (Stop Loss) in time.
Passive income from cryptocurrencies
However, investing in and storing cryptocurrency is classified as passive income. You just bought this or that token, keep it and forget it! However, not all coins, even Bitcoin during storage, can be profitable, as there are also falls. Therefore, investing in digital money should be combined with other types of passive income.
It can be mining BTC, ETH, LTC, THETA, XRP, and other coins. With the growth of TOP digital money, mining has now become relevant and profitable again. You can physically mine yourself and create your own farm by purchasing the necessary equipment. Another option is online pool mining sites where you register and pay a subscription fee for mining equipment online.
Another option for making money on cryptocurrencies exists through providing liquidity or farming on Binance Launchpool, Uniswap, Sushiswap, Beefy.finance, Pancake Swap, and others. You simply donate your tokens to the liquidity pool and receive a percentage of the reward every day. The downside is that if the invested digital money falls in value, all of your income will also fall or disappear. But it’s still better than just keeping tokens in your account.
And the last type of passive earnings on cryptocurrencies is staking. Its advantage is that you can put stablecoin at interest, for example, USDT and BUSD, which hardly change in value. Unfortunately, since there are fewer risks here, then the income is much less, about 1-2 percent per month. Stacking is easy and simple on the official Binance website, in the Staking section.
Difference between investor and crypto trader
So what is the difference between an investor and a cryptocurrency trader? It should be understood that trading Bitcoin or other coins is active work and daily routine. It is important for a trader to quickly open and close profitable trades or fix a loss. Desirable every day, and at most, traders usually wait no more than 2 weeks or a month to close a profitable deal.
In addition, traders can make money on a fall in the market by opening short positions when investors are deprived of such an opportunity and are only forced to wait or buy an asset cheaper. Investors have to wait several months, or even years, to get a good profit, but sometimes the earnings of investors are very impressive.
And another important point – investors buy and store digital money, so they have a lot of free time for personal life, leisure, and travel. Traders, on the other hand, work every day, are subject to stress and fatigue. When opening a lot of deals, even professionals make mistakes and lose money. It turns out almost equality in earnings between traders and investors.
The video about investing and trading cryptocurrency is coming to an end. I talked about the advantages and disadvantages of storing and trading Bitcoin and other cryptocurrencies. As a result, there is no definite answer that trading and investing in tokens is better. Everyone should choose what suits him, based on his interests and abilities. See you in new videos on botcryptotrade.com