In addition to the direct purchase of cryptocurrency at various sites, there are several other methods to make money on digital assets. The experts explained how they differ and what are the advantages of each of them.
The opinions of experts may not coincide with the position of the editorial board. topplabs.org does not provide investment advice, the material is published for informational purposes only. Cryptocurrency is a volatile asset that can lead to financial losses.
At the end of April, according to Google Trends , there was a surge in interest in investing in cryptocurrency. Search statistics show that more and more people are showing interest in methods of making money with crypto assets. Experts interviewed by topplabs.org named the main ways of investing in bitcoin and explained their advantages.
Direct purchase of cryptocurrency
The first way to get bitcoins is to buy them on a cryptocurrency exchange. However, the platform for conducting transactions must be chosen responsibly, taking into account the authority, fame and stability, advises Grigory Klumov, founder of the stable cryptocurrency platform STASIS. According to him, it is worth deciding in advance with the purpose of buying digital coins. If your goal is to trade cryptocurrency and often use it for various transactions, then it is better to store the purchased tokens on the exchange, this will greatly facilitate access to them, the expert says.
Among the advantages of this method of investing, Klumov named the opportunity to use the purchased bitcoins for trading, the protection of investors, since most of the largest crypto-exchanges have long entered the legal field, as well as the ability to transfer bitcoins to stablecoins at any time if quotes begin to decline. If bitcoins were bought for the purpose of long-term investment and will not be used in the near future, then it is better to withdraw digital coins to a cold wallet, Grigory Klumov recommends.
You can get cryptocurrency in another way – by mining it by providing your own computing power to service the network. Buying one ASIC miner and connecting his house will not bring a normal income, says Roman Nekrasov, co-founder of LAZM. However, this can be done in order to get acquainted with the mining industry and gain experience, he added.
To count on a serious profit, according to Roman Nekrasov, you need at least 10 thousand cars, since then service maintenance per device will be cheaper. The expert also noted that people who are not familiar with the mining industry will have technical difficulties when trying to get cryptocurrency.
If you approach mining professionally, then in the event of a sharp rise in the rate of cryptocurrency, the miner has more chances to make money than a simple investor, said the co-founder of LAZM. However, the risks of miners increase when quotes begin to fall rapidly, since then mining may become unprofitable, Roman Nekrasov added.
If an investor does not want to contact crypto-exchanges and take responsibility for storing cryptocurrency in cold wallets, then he has the opportunity to invest in instruments related to digital coins, explained Nikita Soshnikov, director of the cryptocurrency exchange service Alfacash. He attributed the advantages of this method to a lower risk of asset depreciation and lower volatility, but this also reduces the potential income.
“There are fewer risks associated with hacking a crypto exchange and a wallet, securities are kept at the depositary. There are financial statements. All this to some extent reduces the risks of losing funds for the investor, ”the expert added.
According to Nikita Soshnikov, investment instruments related to cryptocurrencies include:
- securities of companies related to cryptoassets, for example, shares of the crypto exchange Coinbase or the manufacturer of mining equipment Canaan;
- shares of funds investing in cryptocurrency;
- shares of exchange-traded ETFs based on cryptocurrency;
- Bitcoin or Ethereum futures on the Chicago Stock Exchange, which do not involve physical delivery of cryptocurrency.