Many people inexperienced in crypto markets wonder how to start earning with cryptocurrencies.
To tell the truth, there isn’t a specific process to follow, nor a path that suits everyone, but some general things can be said.
It is necessary, however, to specify that cryptocurrencies are not only financial assets to speculate on, but in several cases, they have a development project behind them that aims to produce something concrete. The vast majority, however, indeed remain purely speculative assets.
Earning with crypto
The first thing to say to anyone approaching this world for the first time is that cryptocurrencies are not financial assets meant for earning.
They are financial assets on which one can easily speculate, if not even invest in some very rare cases, but to speculate is not necessarily synonymous with earning.
In fact, the vast majority of inexperienced people who speculate on financial markets, including crypto ones, lose money, because it is much easier to lose than to earn, especially if one is not an expert in financial markets.
So not only is the gain with crypto not guaranteed at all, but on the contrary, the loss is often guaranteed if you don’t know exactly what you are doing.
The first step
In light of this, the first step recommended for anyone who is a beginner is to study.
First of all, it is necessary to understand how financial markets work, and in particular the crypto ones, and only secondly can one begin to evaluate some trading or investment strategies.
In this regard, the second step is to ask oneself what goals one aims to achieve, and within what timeframes, as well as to correctly assess one’s own risk tolerance.
This is precisely the reason why there is no exact process to enter the world of crypto speculation, or a procedure that is good for everyone.
For example, there is really a big difference between investment activity, based on holding, and speculation, based on trading, with the latter not being suitable for everyone at all.
The trading raises the level of risk, so it is inherently not suitable for those with a low level of risk tolerance, and it requires much more experience and much more know-how to be done profitably.
On the other hand, holding is much simpler, but in theory, it produces lower returns, as long as you don’t end up losing out.
The second step
After thoroughly understanding how the crypto markets work and precisely outlining your profile as an investor or speculator, it is advisable to start doing some “exercise”.
First of all, it is advisable to register with one or more crypto exchange, starting with the most well-known and widely considered reliable.
Note that even this first operation is not as simple as it might appear to a superficial judgment, because an inexperienced person does not even know which exchanges are considered reliable.
Unless you have a high degree of risk tolerance, and a bit of capital to throw away for the initial tests, it is advisable to be guided by an expert, even for these first simple steps.
After registering on one or more crypto exchanges, you are ready to make your first trial operations. It is recommended to use very small amounts for these operations, because at the beginning it is very easy to make mistakes and lose everything you put in.
The further step
After becoming familiar with the technical functioning of crypto platforms, it is necessary to develop one’s own investment or speculation strategy.
This is by far the most critical and delicate phase, because many of the simplest strategies turn out to be counterproductive in the end.
The fact is that financial markets are often competitions that see on one side the expert professionals, and on the other the inexperienced novices. Generally, the latter lose, and what they lose constitutes the gain of the former.
It is precisely for this reason that the vast majority of crypto speculators are actually at a loss, because on the other side there are top-notch professionals, perhaps with decades of experience behind them and substantial capital, who are now very skilled at inducing the inexperienced to make mistakes.
In this regard, in order to avoid a very long learning period, and especially a very costly one due to the inevitable numerous losses, it is advisable to have an expert professional who is good at disseminating this information explain how it is advisable to proceed in this sense.
Continuous Learning
Let it be clear: everyone makes mistakes, continuously. Even the most experienced.
What really makes the difference in the financial markets is the percentage of wrong trades.
Often, beginners lose in more than 75% of their trades, while skilled professionals might manage to stay below 25%. The real big difference lies all here.
To significantly reduce that percentage, which is often initially higher than 90%, it is necessary to carry out many trial operations for a long time and learn both from those that are successful and from one’s own mistakes (which will be the majority at the beginning).
It is in all respects a continuous learning process, also because the crypto markets evolve over time, so even expert professionals must continue to learn for the rest of their professional lives.
The various strategies
The simplest strategy of all is holding, which means buying crypto just to put them in the portfolio and keep them indefinitely.
The goal is to be able to select only crypto whose market value rises in the medium or long term, so that one day you can decide to sell them to cash in the profits.
This strategy can be complemented by another one that is absolutely compatible.
In fact, some platforms pay returns on deposits. Therefore, for a holder who has no ambitions to sell in the short term, leaving the crypto on a platform that pays returns on deposits can be an additional strategy to try to obtain more gains, but it should be remembered that this strategy raises the level of risk, and it is not necessarily guaranteed to produce real gains.
There is also trading, which is pure speculation involving short-term operations aimed at generating profits in a short, or relatively short time. It is a strategy with very high risks, suitable only for those with experience or deep knowledge of the crypto markets. It is not recommended for beginners.
