Cryptocurrency trading is one of the ways to earn money through cryptocurrency transactions. Earning by crypto trading involves making a profit from the difference in prices: buy cheaper, sell more expensive. That is, the principle of normal speculation in the prices of metals, currencies, and shares is preserved.
To earn, crypto traders can make short, medium, and long-term contracts. The goal of each of them is to earn as much as possible. Purchase and sale transactions are carried out using special tools and platforms called cryptocurrency exchanges.
Crypto trading, just like any other type of trading, is a rather complex process. It requires knowledge, skills, and constant practice. Cryptocurrencies are considered a high-risk investment because they are highly volatile. Traders learn to time the market, study trends, predict trends, and speculate on prices. At the same time, the market situation can change unexpectedly. As a result, the trader can lose all the money or get some profit.
This is a speculative investment strategy that is not suitable for all investors. However, you can try investing in cryptocurrency and trade if you feel confident, have a high tolerance for risk, and have trading knowledge and experience.
Staking: Passive income with some downsides
Cryptocurrency staking is a process through which holders of certain cryptocurrencies can receive rewards for storing their coins in a wallet. The profitability of staking depends on the cryptocurrency used. When staking, an investor earns cryptocurrency by simply storing it in the wallet or on a special platform for the period specified in the contract.
A staking pool may be created by users who have joined together to raise their chances of getting chosen to be a validator. Most pools require extensive setup and management, so pool providers keep a portion of the reward.
There are three main risks of making money on cryptocurrency using staking.
- Market risk. Often, during the staking process, your crypto assets are frozen for a certain time. During this period, coins may fall in price. That is, after they are released, you can sell them for a lower price.
- Counterparty risk. This risk is inherent if the crypto investor works with an intermediary (e.g., pool, crypto platform) during the staking process. Investors cannot minimize hacking, bankruptcy, and similar risks in any way.
- Project risk. Throughout the history of the crypto market, there have been many cases of crypto projects being closed. Often, such situations are accompanied by losses for investor-holders.
Crypto Savings Accounts: Safe way to maximize crypto assets
Given that you choose a reliable and trustworthy provider such as CoinDepo, crypto savings accounts are a more flexible way with minimal risks to multiply one’s crypto funds. Similar to the staking process, crypto savings accounts allow users to earn monetary rewards for holding crypto coins in an account on the provider’s platform. However, it has several advantages over trading and staking.
Trading can be more rewarding, but only if you are lucky and very knowledgeable. Both staking and crypto savings accounts allow one to earn a passive income without constantly monitoring the market and other factors that can affect crypto earnings when trading. Crypto savings accounts, accordingly, are a safer and more guaranteed way to multiply your assets and do not require much effort. There is also a chance to choose any crypto, not just those supporting staking. You simply deposit your crypto assets and watch the interest accumulate.
Platforms such as CoinDepo allow you to withdraw your crypto deposit at any time from a Compound Interest Current Account, but the interest rate on such an account is lower. In addition, CoinDepo has Compound Interest Accounts in which digital assets must be held for a certain number of days (from one week to one year). You can also withdraw your funds from such an account at any time, but in this case, you will lose the right to receive interest. The reward will be notably higher if the chosen deposit period is longer. At CoinDepo, you will get 18% APR + compound interest for stablecoins if the interest is paid out every day and 24% APR if you wait 365 days.
Users also get to control their risk by choosing different assets. Stablecoins, for instance, are not likely to lose their value even a year later. Meanwhile, cryptocurrencies are more volatile, and users can either be lucky and get profit on price difference on top of the interest rewards or have the interest fully or partially cover the losses due to price drops.
Besides industry-leading interest rates and flexibility regarding the deposit term and asset choice, CoinDepo has another advantage that other crypto savings accounts will not give you. Even if you choose to receive interest every year, your funds are not completely locked. You can take out up to 50% of your funds as an instant loan. Your interest will typically be more than enough to cover the loan fees. Accordingly, you will still end up earning interest profit and be able to utilize the funds for other investment opportunities.
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