How to Invest In Crypto (All Possibilities)
Cryptocurrencies have evolved to be a favorable investment option among various investors. While initially it was only super-geeks and technology nerds that were interested in investing in this industry, the recent boom has drawn the attention of a wider range of investors, including major institutions as well as top-tier financial organizations.
From jaw-dropping returns to passive income yields, there are numerous reasons why one should consider investing in the nascent crypto market. Unlike government-backed fiat currencies, some crypto assets like Bitcoin have a finite supply and are thus immune to inflation or hyperinflation, making them an even more attractive investment option.
However, there are also some risks associated with cryptocurrencies. For one, they are highly volatile. This is a double-edged sword. While it offers investors the opportunity to earn massive returns in a short span of time, it can also lead to losing all money. Not to mention fraud, scams, and technical risks, all of which can cause loss of funds.
That said, there are different ways to invest in crypto and earn money. These can range from simple strategies like holding to more technical methods like staking and farming. Each of these methods comes with its own risk/reward ratio. Read on to learn how you can invest in crypto and what strategy might best suit you.
Is Crypto Worth Investing in?
Investing in crypto can make you filthy rich, but it can also result in losing all of your money. In a nutshell, cryptocurrencies are potentially extremely profitable but also quite risky. Safely storing crypto is one of the more notable risks.
Centralized exchanges, which are used to purchase or trade cryptocurrencies, are vulnerable to hacks and security breaches. Non-custodial wallets might prove safer, but since they can only be accessed through a private key, there is the risk of losing or forgetting that key. In such a scenario, the crypto held inside the wallet would be inaccessible forever.
Another major risk is fraud and scams, which are prevalent in crypto. Some emerging crypto projects that look very promising can even come out to be a scam. It is also worth noting that some legitimate crypto projects can end up failing, and with that investors could lose all their money.
Despite all the risks, signs are emerging that cryptocurrency is here to stay. Investors are now able to access institutional-grade custody services with the help of new tools developed for safely managing and storing crypto assets. Moreover, crypto futures markets are being established, while Bitcoin-linked ETFs have hit the markets.
It is worth noting that some cryptocurrencies, including Bitcoin and Ethereum, have launched with ambitious objectives. The former was intended to provide an alternative payment system, while the latter aimed to power an entire financial network. Early investors in these projects would be richly rewarded when these goals are achieved.
What Is Holding in Crypto?
The term holding refers to the procedure of buying and holding cryptocurrencies indefinitely. The strategy advocates not selling crypto when markets go down or become volatile. Since cryptocurrencies are volatile, investors and enthusiasts employ this strategy for long-term profit.
Crypto natives often term hold as HODL, which is sometimes said to mean “hold on for dear life.” It is said that HODL originated from a typo of “holding” in a 2013 online post.
Aside from being a core tenet of many Bitcoin and crypto believers, holding is a form of long-term crypto investment strategy. This approach is based on the rationale that novice traders are likely to botch their attempts to time the market and might end up selling at low prices during a bear market. Therefore, it is recommended that they simply hold their coins.
Who should HODL?
Generally, holding can be a lucrative investment strategy for all traders given that the crypto market is extremely volatile. However, the strategy is best for novice traders who can be influenced by profit-eroding emotions like FOMO (Fear of Missing Out), FUD (Fear, Uncertainty, and Doubt), and more.
Notably, devoted long-term crypto investors turn to HODLing because they believe crypto will eventually replace government-issued fiat currencies as the basis of all economic structures. The exchange rates between crypto assets and fiat currencies would become irrelevant when that occurs, thus it makes sense that they don’t want to sell no matter how much the price appreciates.
Cryptocurrency and Token Staking
Cryptocurrencies are the native digital currencies of blockchain networks. Examples include BTC, ETH, TRX, BNB, XRP, and others, each of which has its own blockchain. For instance, BTC is the native currency of the Bitcoin blockchain, while ETH is the protocol token of the Ethereum network.
On the other hand, crypto tokens are digital currencies built on existing blockchains. They do not have their own blockchain but exist on different blockchain networks. Networks like Ethereum, which supports smart contracts, allow other tokens to be built on their blockchain. Examples of crypto tokens are USDT, USDC, WBTC, STEPN, DAI, LINK, and others, as well as non-fungible tokens (NFTs).
Meanwhile, staking in crypto refers to locking crypto assets to earn rewards. Staking is a win-win for everyone involved. Users can earn rewards by staking their digital assets while projects can offer staking services to amass liquidation.
Staking can be considered as another form of crypto investment. More and more crypto exchanges and platforms allow users to stake dozens of coins with varying APY rates. Crypto exchanges usually offer staking rates based on demand and other factors. Staking rewards are also usually paid out in the form of the coin itself.
Stake GMPD and Earn up to 78.5% APY
GamesPad token (GMPD) owners who wish to hold their coins but also earn rewards can stake their tokens on the GamesPad platform. GamesPad currently has two staking pools that offer different APY based on the amount of GMPD locked as well as the lockup period.
The first staking pool, which has a 48.95% APY, offers investors to stake their GMPD for six months. The pool has a reward token supply of 332,406 GMPD (worth around $5,000) that will be shared among stakeholders in this pool. Rewards are distributed in the form of GMPD token.
The pool is flexible, meaning stakeholders can decide to pull out their tokens whenever they want, but this comes with penalties. For instance, if a user decides to pull out their funds in less than 30 days, they will lose 35% of their accumulated staking rewards. However, there won’t be any penalties for pulling out funds after 150 days.
The second staking pool has a 78.6% APY and allows users to stake GMPD for a full year (365 days). The reward token supply for this pool is 4,000,000 GMPD tokens (worth around $60,000) and will be distributed among stakeholders.
This pool is also flexible but has penalties for pulling out funds early. If you pull out in less than 90 days, you’ll lose 30% of your accumulated staking rewards.
Who should use staking?
Crypto staking is a suitable investment option for both seasoned and new investors, especially long-term holders. Staking is comparable to opening a savings account in a bank, as it would offer passive income. This strategy is also suitable for novice traders who have decided to HODL their crypto for the long term.
However, it is important to keep in mind the risks that come with staking when considering this strategy. For one, there is market risk, meaning that the price of the coin you are staking could drop more than the expected reward. Some staking pools don’t allow users to withdraw their stacked coins until the lockup period is finished, exacerbating the market risk.
Trading is essentially buying and selling assets. In cryptocurrency, trading means taking a financial position on the price direction of a particular crypto asset against fiat currencies like the dollar or against another crypto. Different trading pairs allow a crypto asset to be valued with respect to other assets.
There are different styles of cryptocurrency trading, as well as various platforms that offer these services. While crypto exchanges can be the most straightforward destination for trading crypto assets, an increasing number of traditional brokerage firms are also adding support for cryptocurrencies.
After choosing a platform, coming up with the right trading strategy would be the next big step. From day trading and scalping (using arbitrage to make money from small price movements) to dollar cost averaging (the practice of investing a fixed dollar amount on a regular basis, regardless of the share price), there are dozens of trading strategies.
Spot trading, margin trading, and futures trading are three of the most popular crypto trading formats. Spot trading in crypto refers to buying and selling crypto tokens at real-time prices. This kind of trading involves purchasing the underlying crypto and storing it in your wallet or exchanging it for another crypto or fiat currency when selling.
Margin trading is where third-party crypto assets are used for trading. Here, traders don’t trade only the assets they own. Margin traders have access to a large sum of crypto that they can use to trade and earn enormous profits, or bear huge losses when things don’t go as planned. The crypto used in this kind of trading is provided by other traders.
On the other hand, crypto futures are an agreement to buy and sell a specific amount of underlying crypto at a specific future price on a specific date in the future. This strategy allows traders to speculate on the price of cryptocurrencies without actually owning them. They can go LONG if they believe the price would increase or go SHORT if they believe the price would drop.
Pros of trading cryptocurrencies
- 24/7 trading; no limitations on trading hours.
- It is permissionless.
- Cryptocurrencies are secured from cyber-attacks cryptographically.
- Crypto trading can help hedge against national inflation since it is not tied to governments.
- High volatility in crypto can yield huge profits.
Cons of trading cryptocurrencies
- High volatility can lead to price declines and loss of funds.
- Cryptocurrencies are not regulated by the governments.
- Risks of fraud and scams.
Who should trade cryptocurrencies?
The risks of trading cryptocurrencies are mainly related to their volatility. However, volatility can act as a double-edged sword. While it offers investors the opportunity to earn massive returns in a short span of time, it can also lead to losing all money. Therefore, there is a significant risk/reward ratio with trading cryptocurrencies.
It is worth noting that there are some tools that crypto traders can use in order to minimize risk and spot the most promising projects. Nevertheless, crypto trading remains risky and novice traders are best advised to avoid this option. And if you want to give crypto trading a try anyways, make sure to invest only what you can afford to lose.
What Is an ICO?
An Initial Coin Offering (ICO) is a crypto fundraising approach that raises capital for early-stage companies using cryptocurrencies. It is the crypto industry’s equivalent of an initial public offering (IPO). In this type of fundraising, a blockchain-based startup mints a certain number of new tokens and offers them to early investors, normally in exchange for other crypto assets like Bitcoin and Ethereum.
These newly minted tokens could have some utility related to the product or service the blockchain-based startup is off, or can simply represent a stake in the project. The token is usually sold at a major discount compared to its projected price once it is listed on exchanges.
Buyers normally invest in ICOs with the expectation to enjoy some price appreciation once the newly minted token is listed on major exchanges. Aside from this, token holders might also get the chance to participate in the governance of the new project.
However, ICOs have recently come under fire amid concerns that they can be used by scammers and market manipulators. Because projects are not always examined and approved by reliable entities before an ICO, some projects turn out to be exit scams and rug pulls. This shortcoming of ICO gave rise to another more trustworthy form of crypto fundraising called IDO.
What Is an IDO?
An Initial DEX Offering (IDO) is a crypto crowdfunding technique that enables blockchain-based startups to raise funds through their newly introduced native tokens. IDO is superior to ICO in many ways, particularly since the method is becoming more regulated in a bid to minimize exit scams and rug pulls.
Unlike an ICO, where investors need to wait for the token to get listed on exchanges in order to cash out, tokens in an IDO are immediately listed on the DEX via which they are launched. That is because some of the raised funds are added with the new token to a liquidity pool (LP) before being returned to the project.
Entering an ICO or IDO is usually pretty straightforward. All you need is a launchpad where the ICO and IDO are taking place and some crypto assets. However, it is imperative to choose a reliable launchpad that performs rigorous due diligence on all projects before listing them. One such launchpad is BullPerks, which has offered many profitable deals.
Successful IDO deals on BullPerks
BullPerks is a major crypto launchpad and IDO platform that implements a unique tier-based system aimed to democratize investments, offering users a relatively easy way to participate in deals. In order to protect users, BullPerks is committed to performing rigorous due diligence on all projects, including their regulatory, legal, financial, and business capabilities.
This has helped BullPerks to bring some lucrative deals to the table for its users. One such deal is the IDO of StepWatch (SWP), a web 3.0 fitness and health tracking mobile application. The IDO offered users access to SWP tokens at a rate of $0.05 per token. One day after the deal, the coin’s price jumped to $0.08. SWP also reached an ATH of $0.092 three days after the deal, representing a more than 90% return.
Another successful deal was IDO of World of Masters, a blockchain-based martial arts-themed metaverse game. The deal allowed investors to purchase WOFM tokens at a rate of $0.011 per token. Notably, the coin more than doubled in value on the day of its IDO deal, reaching an ATH of $0.028.
Who should participate in ICO and IDO deals?
ICO and IDO deals have proved to be one of the most profitable forms of crypto investment. However, they are still subject to risks. As noted above, ICO deals can turn out to be exit scams or rug pulls. While IDO deals don’t bear such risk, there is still no assurance that the project would be successful.
All in all, both crypto veterans and novice traders can participate in these deals. However, they should find a reliable launchpad and also do their own research about the team and the project before investing in it.
Short for non-fungible tokens, NFTs are unique tokens stored on a blockchain. NFTs are non-fungible, meaning they are non-interchangeable and thus can be used as a deed of ownership to a digital item. NFTs can represent real-world objects like art, digital items like music, videos, journals, domain name, collectibles, and more.
The market for NFTs saw massive growth starting in late 2020, which led to the prices of many collections skyrocketing. Buyers started paying millions of dollars for NFTs. This lured investors to this nascent and promising space, further empowering the idea of investing in NFTs for future returns.
Besides buying and selling NFTs at a profit, another way of earning money with NFTs is to mint them. Sites like Rarity.tools or NFTcatcher.io have an upcoming list of NFTs, which investors can use and find promising collections that could appreciate in value in the future.
GamesPad NFT collection
Capitalizing on the NFT boom, holistic gaming, NFT, and metaverse ecosystem GamesPad has also launched its own exclusive collection, which comprises five tiers of NFTs. The collection is limited and capped at 5,910 pieces.
GamesPad NFTs sold out during the INO (Initial NFT Offering) for $4.5 million on BullPerks, marking a success for both the team and the NFT ecosystem at large. The collection has since been listed on the Binance NFT marketplace as well as the next-generation NFT marketplace Liquidifty.
GamesPad employs a tiered system, where each level provides a different entry point into the growing community. Each NFT, which features high-quality artwork and unique design, is associated with a specific GamesPad level that provides an investment opportunity.
Who should invest in NFTs?
NFTs offer a wide range of use cases, but they mainly use blockchain technology to digitally signify ownership. Therefore, in many cases, an NFT is merely a unique, digital piece of data, which might not have value at all. What makes NFTs valuable is their use case. For instance, the Bored Ape Yacht Club collection aims to create an entire metaverse for its NFTs.
Therefore, a general rule when investing in NFTs is to look for projects that offer use cases. It is also important to avoid hyped projects to not end up buying at elevated prices. As long as these rules are respected, both novice and experienced traders can invest in NFTs.
How to Earn Money With GamesPad?
GamesPad is a gaming, NFT, and metaverse ecosystem that incorporates a decentralized VC, game incubator, multichain launchpad, and NFT marketplace. The platform aims to provide equal opportunities for retail customers to invest in promising crypto gaming projects.
There are various ways investors can make money on GamesPad. In the first place, since GamesPad is a launchpad, users can participate in investment deals like IDO, INO, and VC deals. GamesPad strives to bring only lucrative deals to the table, making sure that investors have the opportunity to invest in what could be the next big thing in GameFi.
Moreover, GamesPad (GMPD) token holders have the option to earn passive yields by staking and farming their coins on the GamesPad platform. There are currently two staking pools and one farming pool, each offering different APY rates based on the amount of GMPD locked as well as the lockup period.
Does that sound intriguing? Learn how to get started with GamesPad in this comprehensive tutorial!
Disclaimer. This material should not be construed as a basis for making investment decisions or as a recommendation to participate in investment transactions. Trading digital assets may involve significant risks and can result in the loss of invested capital. Therefore, you must ensure that you fully understand the risk involved, consider your level of experience, investment objectives, and seek independent financial advice if necessary.