While the overall prospects of cryptocurrencies are undeniable and undisputable, there are lots of heated arguments about the best ways to make money in the cryptocurrency market. The two most polar approaches are active cryptocurrency trading and long-term investments or HODL.
As usual, there is no side in this argument that is clearly right or wrong – both approaches have a lot going for them as well as a lot of negatives. Moreover, in essence both methods have the same basic idea – buy cryptocurrency low and sell it high. The difference lies in, for lack of a better word, in the tempo and frequency of transactions. So let’s dive deeper into the issue.
Trading
Trading is a much more active and involved strategy – it requires constant monitoring of the market, quick decision making and a lot of transactions. It is true even if we talk about relatively low frequency trading, with positions being opened and closed every couple of days or so. Intraday trading and scalping requires even more activity – sometimes traders open and close dozens of positions within a day.
The requirement for constant monitoring of the market essentially turns trading into a job. For most successful traders – into a full-time job. And trading bots and expert advisors are not of much help in this regard – bots automate a lot of menial tasks in trading, but they require vigilant supervision. Without supervision, any trading robot is perfectly capable of draining your deposit really quickly.
And let’s not forget – crypto trading is risky. While cryptocurrencies are inherently risky assets, it is traders that suffer most from their volatility. Unlike HODLers, traders often don’t have an option to “wait out the storm”. In addition, the more transactions you make, the more chances for making a wrong trade you get. Thus, the vast majority of traders actually lose money, rather than earn.
Risk and labor involved lead to great emotional toll of trading. Constant stress, pressure, nervous breakdowns and burnouts are the issues that virtually all traders admit to be quite serious. And a huge part of any trading course is devoted to dealing with stress.
But if trading is time-consuming, stressful and risky, why do people stand by it? The answer is simple – trading offers huge potential profit. While it is riskier and harder than HODL, if you are successful, you’ll make money much faster by trading. In addition, a lesser initial capital is needed for trading – if you’re both lucky and good, you can multiply even $10 quite quickly.
HODL
HODLers take the completely different approach to making money on crypto. They just buy promising coins in their portfolio, hold onto them for at least a few weeks, often – months and even years and then sell the coins high.
Obviously, this approach offers less potential profit, since you have to wait for assets to grow “naturally”, you can’t really influence this process and without active trading, you can’t multiply your earnings. This is a huge, huge disadvantage, besides minor ones like “lack of involvement in the earning process”.
However, there are also major advantages of HODLing. First of all – it’s the lack of stress. You don’t have to worry about a sudden market movement (if you invest in sufficiently reliable assets) or about a missed trading signal – you just lay back and let the assets grow on their own. Accordingly, you also don’t have to spend much time on managing your assets and making transactions – checking the state of your portfolio every once in a while will be enough.
And there is also less risk involved. Of course, a general market fall will hurt you anyway, however, if you HODL major coins and have time – you can always just wait for another growth phase.
A universal trick
There is a method that allows you to squeeze out even more profit out of your coins regardless of whether you trade or HODL. After all, you do it to make money, so selling Bitcoin high is a very important step.
The HiRiBi platform aggregates offers from dozens of exchanges, ensuring that its users always get the best offer on the market. As a result, on HiRiBi you can usually sell your BTC 5-10% higher than the market average.
Moreover, HiRiBi offers a unique opportunity to sell Bitcoin for PayPal USD, so it is not only profitable, but also a convenient platform.
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