Mid-2022 marked the beginning of hard times for the crypto market. Bitcoin has lost more than half of its price and dragged other altcoins with it. However, many see this period as an opportunity to profitably invest in cryptocurrencies. Are you one of them? Here’s a concise guide on how to do it.
5 Ways To Invest In Crypto In 2023
Investing in crypto assets is considered to be one of the most profitable and trandy types of passive income, although this form of investment is speculative in nature and is known for its volatility. Moreover, the prices of even the most popular and seemingly stable coins can collapse in a matter of seconds. For example, Bitcoin hit its all-time high of about $67,000 in 2021, while its current value is just over $17,000.
Despite all the risks, many investors are attracted by the quick and easy profits that investing in crypto can bring. If you are one of them and are not afraid of the crypto winter, here are the most popular ways to invest in crypto assets.
1. Buying and Staking Crypto
It should be remembered that cryptocurrencies are associated with high risks, so select an amount that you do not mind losing. You can either buy mature coins like Bitcoin or Ethereum or you can invest in newer but promising projects like VeChain, Solana, Hedera and others. For coins that you stake without spending or withdrawing, some projects pay out rewards. Some digital wallets already have this feature built in.
2. Becoming A Crypto Miner Or Validator
One of the most popular ways to earn some crypto is to confirm transactions on a blockchain. While this is more like a job than an investment, you can keep your crypto rewards as an investment afterwards.
3. Investing In Crypto-Focused Companies
These are companies that are somehow connected with the crypto world. For example, they can build their products or services on blockchain technology, produce mining equipment, or invest large sums in crypto.
4. Providing Liquidity
A liquidity pool is a place where traders can quickly swap one coin to another. For lending your crypto or holding them in a pool, you will get interest or transaction fees.
5. Investing In Crypto-Focused Funds
Another way to earn passive income is to invest in funds. The rate for such deposits is usually higher than the rate for bank ones.
How To Choose The Right Crypto?
There is no 100% way to estimate the likelihood of a currency being successful in the future. For example, deposits always bring guaranteed income, albeit not very large, and securities quotes are much easier to predict. The value of digital assets is often influenced by factors that have nothing to do with the economy. Nevertheless, you can try to assess the potential of a crypto through fundamental and technical analysis, comparison and news.
Fundamental & Technical Analysis
Fundamental analysis is more often used to analyze a particular coin in order to find out how reliable it is, what opportunities and prospects it has, as well as how many people use it. As part of this study, the development plan of a crypto project, as well as the development team behind it, are evaluated.
With the help of technical analysis, you can study the quotes of digital currencies at different time intervals. Is the crypto going up or down? Are people investing or withdrawing? What events influence price fluctuations and so on. Technical analysis is about numbers and figures.
There is a lot of information and comparative analysis of various coins on the Internet. If, for example, you are in doubt between Hedera and VeChain, google HBAR vs VET. You will find a lot of analysis of different comparison parameters of the coins you are interested in.
Following the News
When investing in a certain cryptocurrency, do not forget to follow the news. For example, if your coin has been listed on a popular new exchange or a well-known person has commented on it, this is a very good sign and you can expect quotes to go up.
Where To Buy Crypto?
Buy crypto only on trusted exchanges that guarantee security and the best exchange rate.