How to make money with bitcoin

How much can be earned with cryptocurrencies?

In order to understand how to make money using bitcoin, let's try to simulate the following situation. Let's say an investor decided to invest 1000 dollars in 10 cryptocurrencies (the most popular ones: Bitcoin, Ethereum, Ripple, Litecoin and in some less popular coins such as Zeusshield, Enigma, Wagerr, Voise, ZClassic, Debitcoin). We will calculate what income he will receive under the following conditions:

1. he purchased coins when they were first listed on exchange, and sold on 21.11.17;
2. coins were purchased when their price was at the minimum value, and sold on 21.11.17;
3. coins were purchased when they were first listed on exchange, and sold at their all-time high.

The chart below shows profits or loss of our would-be investor, depending on different situations.

Chart - Investments profitability

A few days ago, bitcoin broke $8000 and judging by the current trend, $9000 is within reach soon. The growth of price of other major cryptocurrencies is also expected. Potential profits on cryptocurrency open up new horizons for investments in 2018.

What cryptocurrencies newcomers should choose for investment?

Professional traders recommend that newbies should begin their investment activities with some major cryptocurrencies. All the experts interviewed by Bitnewstoday.com agree that to make money with bitcoin and other cryptocurrencies from the TOP-10 (by market cap) is the least risky type of investment.

Luke Jordan from Rank Zero LTD recommends newcomers to look at bitcoin, ethereum and litecoin. Expert points out that these cryptocurrencies are backed by strong teams who have clear strategies of development. Throughout 2018 they are planning to implement new features. The benefits of these three cryptocurrencies is that they're easy to be bought and sold into fiat money at any point. 

Jorge Dominguez, a spokesman for Blockchain Public Relations, also believes that altcoins are a fairly complex investment tool. The expert warns newcomers that there are a lot of scammers on the market who prey on naive investors and can easily deceive an inexperienced person. It will be impossible to restore their losses, since this sphere is not regulated.

At the same time, Joel McLeod, founder of icoSource.io, noted that regardless of what cryptocurrencies are considered for investment - those which have been circulating for a long time on the market such as bitcoin, ethereum, etc. or completely new - the most important factor is how much time investor is willing to give to trading and analysing information of the selected cryptocurrency.

As for tokens, according to experts, they are suitable for more experienced investors, since it is necessary to be able to analyze ICO projects, evaluate potential of the idea, look for information about the team, and so on.

It should also be noted that one should carefully consider not only the choice of cryptocurrency, but also choice of exchange.

What news should be followed by investor?

It is worth noting that the cryptocurrency market is not only super profitable, but risky as well. So if a person chooses to invest in cryptocoins, he should be aware that this is a difficult job. He will have to not only track the exchange rate, but also to analyze a wealth of information on projects (including their teams), as well as regulatory innovations, statements by regulators, etc. To make money on cryptocurrency exchange you need to work hard.

When analyzing news, it is worth considering why a particular expert stands for or against cryptocurrency. It is also worthwhile to evaluate advices of various investment specialists. For example, representatives of traditional finance, as a rule, don't recommend to invest in cryptocurrency, since such investments create competition for bank deposits. Whereas crypto followers, who believe that cryptocurrencies will turn the world over, advise to invest in buying coins without hesitation.

The cost of cryptocurrency grows up every time when there are any negative news or statements coming from regulatory bodies. These are exactly those moments when investor can enter the market for long positions. Forks or other changes in mining protocols are also important messages that need to be tracked, since they can help determine the future potential of the currency, says Asankhaya Sharma, representative of SourceClear.

Which strategy to choose?

Experts recommend newcomers to adhere to long-term strategy on exchange, as the upper limits of the cryptocurrency market show steady growth and there are no signs of slowing down so far. In the short term, the market is unstable and unpredictable.

"Long-term strategy is always safer," says David Parmet, Blockchain Developers. "In addition, the benefits of long-term investment can be much greater than the benefits of playing on the ups and downs."

For example, to get the maximum earnings with bitcoin purchased at the beginning of the year, it was better to sell it in November than in February.

Cathy Summers, representative of Consort Partners, believes that investment strategy depends on the nature of an investor. If a person is not risk-averse, then long-term strategies are appropriate for him. An adventurer who is not afraid of exchange rate volatility can try short-term strategies.

Summing up, we can say that investing in cryptocurrency is a complicated and risky business. Therefore, before you start investing in coins or tokens, you need to study general information about crypto market, analyze key players, try to determine what factors affect the change in value, etc. Beginners are advised to invest the sums that they won't regret (especially not catastrophic) to lose. And most importantly, think in advance how you will withdraw funds from exchanges.