In the circles of crypto enthusiasts, there are constantly disputes and discussions about what is more profitable: crypto trading or investing. Some say that you can earn much more if you trade. Others point out that traders are constantly “draining” their deposits, and only investors can make decent money. But, as always, the truth is somewhere in the middle. Let’s look a bit closer at the question.
Cryptotrading: “Stairway to Heaven” or “Highway to Hell”?
Both trading and crypto investment are reduced to one simple task: buy cryptocurrencies low, and sell high. The only difference is in the methods. If investing involves a simplified “buy and hold” principle, then everything is much more complicated with crypto trading. Here you need to constantly analyze the charts, without distractions, for hours, and the stress level can be so high that a trader may have a nervous breakdown by the end of a particularly hard trading session. Trading not only puts a lot of pressure on emotions, but also constantly forces the brain to work in an overclocked mode. In other words, trading is a very stressful activity that requires concentration and clarity of mind. Even a small mistake can lead to disaster.
There is an opinion that less than 10% of traders earn money in the market. Indeed, trading requires extensive experience and constant work on your strategy. The market is dynamic, so in order to survive, crypto traders need to constantly change their approaches and adapt to the rapidly changing conditions of the crypto market. With a skillful approach, active trading allows you to get more profit, but the risks grow accordingly.
Advantages of trading
- A wide variety of trading strategies: scalping, inter-exchange arbitrage, trading on trends, levels, etc.;
- High potential profit. Cryptocurrencies are very volatile, which opens up a wide scope for intraday trading;
- Low entry threshold. You can start trading even with $10.
Cons
The disadvantages of trading are much more numerous:
- High risk. The greatest disadvantage is the chance to quickly lose your funds if you do not have experience. In addition, the fee costs for frequent transactions also are quite impactful;
- A lot of experience is required. Beginners can start trading, but without knowledge of technical analysis and at least basic experience, they are unlikely to get a positive result. In addition, trading requires self-development and discipline, which are developed through experience;
- Emotional stress. Traders need stress tolerance, without which the nervous system simply cannot withstand the pressure;
- Continuous monitoring is a must. A couple of hours a day after the main job may not be enough for effective trading. You will spend a lot of time watching the charts before you begin to understand what is happening in the market;
Investing: a “safe haven” for tired traders
Investing does not require such involvement as trading. Most often, the tasks are reduced to periodic fundamental analysis of the market situation. And only sometimes do you make transactions: perhaps a couple of times a month, and maybe less often. All you need to do is collect a portfolio of cryptocurrencies and monitor the situation, periodically selling and buying assets.
Investors are more calm and balanced. They follow the trend, carefully consider transactions and evaluate prospects. Basic knowledge that is publicly available on the Internet will be enough to start with.
Advantages of crypto investment
- Your nerves are fine. Of course, if your portfolio does not “sink” by 30% – 50% or more;
- More time for analysis. Unlike trading, which requires quick reaction and instant decision – making, when investing, you will have a lot of time for this;
- Less risk than trading. If you adhere to money management principles, the correction will not be too scary for you;
- You don’t need a lot of knowledge. Of course, professionals invest better and get more profit, but beginners can already show good results at the start. You just have to be careful.
Cons
- The potential yield may be lower. Investors are less flexible than traders. But sometimes it will only benefit them;
- Larger investments will be required to get a tangible return;
- You have to understand how the crypto market works. At least the basics.
How to earn money without stress
There is another way that you can make a profit without too much stress. There are crypto platforms that offer a more favorable exchange rate for cryptocurrencies than exchanges. This method is often used by arbitrators. One of such services is the HiRiBi crypto exchange platform. Its advantages are as follows:
- Fast and secure exchange. After you sell your bitcoin, you only need to wait for 3 network confirmations. Then the funds will be automatically sent to your PayPal wallet;
- The rate is higher than on exchanges. The service monitors trading platforms, which allows it to select the highest rate for selling Bitcoin. It can be higher by 10% or more;
- Profitable referral program. With it, you can earn up to 2% from every exchange made by your referral;
- Privacy. Privacy is very important in digital times. You will not be required to submit any paperwork. You don’t even have to register.
Its only drawback is that you can only sell Bitcoin for PayPal. That’s good enough, though. You can buy cryptocurrency low on another exchange, and sell it with a profit on the HiRiBi service.
Conclusions
In summary, we can safely say that trading is more suitable for professionals. People often come to trading in order to increase the deposit faster. But many traders move to a quieter investment after they have more capital. Here everything is the same as in life: while you are young – you are active, ambitious and purposeful, but closer to old age you want more peace and quiet. But it is not clear which is better: investment or trading. Everyone has their own goals and needs. A lot also depends on skills: a professional investor can earn much more than an inexperienced trader. But everyone has to make their own decisions and decide what is best for them.
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