Many novice crypto investors are interested in how to make money by buying Bitcoin, but they do not know that they can save money and increase the return on their investment. The crypto market infrastructure has grown significantly over the past three years, and new services have appeared that allow holders to use them to their advantage. In this article, we will talk about simple life hacks for bitcoin investors.
Life hack #1. Buy cryptocurrency through exchangers, not exchanges
If you want to buy cryptocurrency for fiat, it may seem logical to do it through an exchange. But don’t rush. It is likely that you can find a more profitable, easier and faster way. Of course, crypto exchanges offer the best exchange rate. But this method has its own significant drawbacks.
- You pay fees three times: for deposit, exchange, and withdrawal. Trading fees are usually low. However, fees for depositing fiat and withdrawing cryptocurrencies can be to 3% – 5%, and the total amount will be about 6% – 10%, respectively.
- This is inconvenient. You have to do a lot of things. When you buy cryptocurrencies through exchanges, the coins are immediately transferred to your wallet, where you can safely store them.
- You’re wasting your time. Accruing currency to your account may take from a few minutes to an hour or more. During this time, the rate can grow significantly.
The list of available exchangers can be found via the Changevisor service (https://changevisor.com). The site displays exchangers sorted by offers – from the most to the least profitable one. You can filter exchangers by the chosen payment method: PayPal USD Bitcoin or Advanced Cash BTC.
Life hack #2. Increase the yield of crypto you hold
Often, after buying cryptocurrencies, they become a dead weight on the wallet. Crypto lending is gaining popularity: platforms provide solutions on the blockchain and not only, which allow users to issue loans secured by cryptocurrency. This way you can get additional income through public lending. Here are some of such services:
- Aave (https://aave.com/);
- Compound (https://compound.finance/);
- MakerDAO (https://makerdao.com/);
- BlockFi (http://blockfi.com/);
- Celsius (https://celsius.network/).
There are decentralized platforms (Aave, Compound, and MakerDAO) and centralized platforms (BlockFi and Celsius). DeFi (Decentralized Finance) services are more reliable, work independently, and do not have a single point of failure, but their yield is less impressive. CeFi products are managed by a single company but offer higher interest rates on deposits. In addition, many DeFi platforms only work with ERC-20 tokens issued on the Ethereum blockchain. And BlockFi and Celsius Network allow you to make a Bitcoin deposit.
Life hack #3. Choose the most appropriate time to purchase
Use news aggregators such as Coindar (https://coinmarketcal.com/en/) and Coinmarketcal (https://coinscalendar.com/) to keep up to date with current news and updates. Crypto calendars promptly publish information on important new developments:
- Listings on exchanges;
- Hard forks;
- Major updates to the blockchain;
- Launchpads and so on.
Major news can push the rate of individual cryptocurrencies or groups of cryptocurrencies up. And hard forks allow you not only to profit from the price increase, but also to get additional cryptocurrency for free. Some forks, such as Bitcoin Cash and Ethereum Classic, have greatly increased in price and brought investors BTC and ETH a good profit. But do not forget to evaluate the overall situation on the crypto market: a downtrend of panic can neutralize the positive return from the news.
Life hack #4. Take a closer look at crypto funds
You can take on the role of a passive investor and transfer your money to professionals who will choose crypto projects for you and invest in them. All you have to do is to make a profit. But there are risks: if the reporting period turned out to be unprofitable for the crypto fund, then investors also lose some money.
In addition, there is still a high risk of running into scammers. When searching, you should carefully study all the information about the crypto fund, including legal information. Suitable crypto funds such as Pantera Capital (https://www.panteracapital.com/) or Digital Currency Group (https://dcg.co/) can be found on the Crypto Fund Research website (https://cryptofundresearch.com/cryptocurrency-funds-overview-infographic/), which analyzes services and compares their profitability. But large crypto funds require large investments – up to $100,000 or more. If you don’t have such an amount, then you can look at projects such as Tokenbox (https://tokenbox.io/). There $100 will be enough, but managers have less experience, so the risks will be higher.
Life hack #5.
Did you know that you can profit from two cryptocurrencies by owning only one? You can earn money on crypto loans not only by issuing a loan, but also by receiving it. Some crypto exchanges, such as Binance (https://www.binance.com/ru) and BitMEX (https://www.bitmex.com) provide margin trading. You can use Bitcoin as collateral and buy another cryptocurrency with borrowed funds.
In the crypto market, there are often situations when altcoins grow after bitcoin and even faster. Thus, you can make a profit by selling an altcoin that has risen in price, and then return the Bitcoin collateral and also sell it higher. But there is a high risk of losing collateral if cryptocurrencies fall in price.
Following these simple life hacks, you can not only reduce losses in the event of an unfortunate combination of circumstances, but also significantly increase the return on crypto investment. But don’t forget to follow risk management and learn the basics of Bitcoin investment.