How To Trade Cryptocurrency And Make Profit In 2021 [12 Easy Ways]

The cryptocurrency industry is still in its early stages of development. As the crypto-assets increase in price, more people come into the industry to make a quick buck. These newcomers are always trying out new “strategies” for how to trade cryptocurrency and make profit.

Many investors like to trade cryptocurrency because not only is it a volatile asset, but you can potentially make higher returns than with traditional investments. If the market goes your way then expect much bigger profits.

Cryptocurrency is becoming a popular investment option for those looking to get into the market. It’s an extremely volatile asset, so timing your investments right can net you some nice returns.
The good news? There are plenty of ways on how to trade cryptocurrency and make profit – Since 2011 there has been consistent growth in developer activity, social media activity, and start-ups dedicated solely to developing the cryptocurrency  industry.

How to Trade Cryptocurrency And Make Profit

How to Trade Cryptocurrency And Make Profit in 2021

Here we take a closer look at how to trade cryptocurrency and make profit

1. Investing

The first step is to set a budget,  Decide how much you want to spend, do not invest more than 30% of your overall portfolio on a particular coin.

For cryptocurrencies, it is best to spread out your Fund over multiple coins rather than having all of your funds invested in just one Coin. Although this increases your risk level, it also decreases the impact any single coin has on the total value of your fund when investing in several different ones at once. This allows you to take advantage of high volatility without putting everything into one basket. You should consider splitting up your funds so that no more than 30% are allocated for any one coin, including Bitcoin.

By far the most important factor in trading is to know everything you can about a specific cryptocurrency before you invest in it. Technology advancements are happening all of the time and there will be a number of factors that influence how valuable a cryptocurrency is, which means you need to find out as much as possible about each one before deciding whether or not to buy some.

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Before buying any coins or tokens make sure that you:

  • Do your own research!
  • Never base your investment decision on somebody else’s advice!

2. Airdrops

Airdrops are basically bonuses that cryptocurrency companies give to the participants in order to attract people to try out their service. Not only do these act as incentives for customers, it also helps spread awareness about the new coin and creates hype for the coin.

There is a huge market of such free coins or tokens which you can get by joining some sort of affiliate program, share your referral link with others or performing some other tasks provided by crypto companies themselves, such as following on  Twitter  or posting something on social media platforms like Facebook or Instagram . All this work can be done daily in order to earn multiple amounts of cryptocurrencies every week.

3. Staking

Staking is a form of interest over time on your currency in order to generate profit.

You can earn extra money by keeping your coins in your wallet and letting them stake as opposed to selling them.

The most popular cryptocurrencies for staking are Trom, Dash, NEO, Stellar Lumens and Stratis. Other examples include Waves, Nxt and Ethereum Classic.

4. Peer-to-Peer Lending  (P2P)

You can also make money by lending out your coins and making a profit from the interest that they receive.
The repayment rates on loans in cryptocurrency world are much better than with fiat currencies (USD, EUR, etc.)

5. Cryptocurrency Trading  (Buy & Sell)

There is one of two ways you can go about this. Both of these approaches have advantages and disadvantages but it is up to you to decide which works best for you.

  1. Using Automated Tools: Automated trading involves using bots or other software which you can buy, along with some technical skills for working with these tools. The biggest problem with this is that the market is very unpredictable and it is hard to know what the ideal timeframe for setting up trades should be. 
  2. Trading Manually: Manual trading , on the other hand, requires more time and effort but has a higher success rate because you are able to make decisions much faster in order to take advantage of opportunities that arise.

If you decide to do manual cryptocurrency trading then here are a few things you need to keep in mind:

  • Only invest based on fundamental analysis: Try to find reasons why a Coin you are looking into will increase in price.
  • Always use stop losses: These will help you not lose any money if your trade goes wrong.
  • Make sure to always keep your coins secured: Because exchanges can get hacked and all of your money could be stolen if the system is not properly protected.
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6. Writing Reviews

There are many websites that work as review sites for cryptocurrencies. These allow active users who have experience with buying or selling a particular cryptocurrency to leave reviews on their platforms. You can earn by writing these professional reviews if you have knowledge which has been acquired through practical use of the products and services offered by crypto companies. The biggest advantage of this method is that it serves as an additional source of earning income without putting too much time or into it.

7. Chasing The Next Pump

This is one of the riskiest methods for earning at this moment in time due to a lot of scammers trying to trick people.
Although this helps you on How to Trade Cryptocurrency And Make Profit, you can also earn big profits by buying low and selling high there are also many risks involved which I will cover below:

  • You have to research about a cryptocurrency before you buy it in order to know if its price will increase or decrease over time. If you decide that the Coin will go up in value then you should be ready to invest some amount of money in order to make profit later on after selling it when the price has reached the desired selling price.
  • You have to make sure that you are buying the right coins because a lot of these scam Coin  sellers will be selling you a coin so they can easily dupe people of of their money.
  • A good way to stay safe from scammers is by using only trusted websites and avoiding shady developers on Facebook or Telegram who offer fake Coins. Make sure you investigate any developer offering cryptocurrency related tools before Investing any kind of cryptocurrency, For example: read reviews about them online, check if there are any complaints, etc.

8. Trading Altcoins 

Altcoins are cryptocurrencies that aren’t Bitcoin, for example Ethereum and Litecoin are also altcoins. There are a lot of people who trade these daily using different strategies such as technical analysis (TA). The biggest advantage of altcoin trading is that you can earn money even if the price of Bitcoin drops, however you have to be aware that altcoins can sometimes drop by a significant margin compared to BTC.

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9. Mining 

You can use your computer to process transactions and earn a reward for validating them while also securing the network at the same time. The main advantage of mining is that it’s very easy to start as long as you are using good hardware like graphics cards, although some people who want to mine without any risk will use cloud miners such as HashFlare or Genesis Mining which allows anybody with a small budget to get involved in this activity easily.

However, due to increasing competition on these services many of them now bring in lower profits so its better to setup your own mining rig if you can afford it, for example by using a mining motherboard such as the ASRock H110 Pro BTC+ , a good CPU like AMD Athlon 200GE and Vega graphics card such as PowerColor Red Dragon RX 570 4GB GDDR5.

How to Trade Cryptocurrency And Make Profit

10. Getting Paid in Cryptocurrency  (Job Listings)

The prices of cryptocurrencies are constantly increasing so this may be an excellent opportunity to get paid for something that you do anyway, whether its writing or translating content, viewing advertisements online or doing tasks on the internet.

11. Cryptocurrency Faucets

Cryptocurrency faucets are a good way to get started with cryptocurrency because they allow you to earn coins without investing much effort. Some of them may pay using Bitcoin Cash (BCH), Ether (ETH), Litecoin or Dogecoin which is interesting if you want to invest in these currencies later on, however the best thing about them is that they’re usually very simple to use and therefore suitable for beginners.

12. Cryptocurrency arbitrage trading

The main purpose of this strategy is to help you on how to trade cryptocurrency and make profit by buying a cryptocurrency at one exchange and sell it instantly on another exchange for a higher price due to differences in prices.

Conclusion: How To Trade Cryptocurrency and Make Profit

So, can you make money with cryptocurrency? Well, there, you now have your answer.

There are many ways on how to trade cryptocurrency and make profit in and you have 12 of them above. If you’ve ever tried any, please share your experience in the comments section!

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