A crypto investor is an individual or organization that buys, holds and sells cryptocurrencies as a form of investment, with the aim of profiting from price increases.
How do Crypto Investors make money?
There are many ways to make money in cryptocurrency. Here are five of the most common methods:
- Capital appreciation: Crypto investors buy cryptocurrencies and hold them for a long time, with the hope their value will increase over time. If the price of the cryptocurrency goes up, the investor can sell for a profit.
- Trading: Crypto investors that buy and sell cryptocurrencies frequently to take advantage of price fluctuations and are often referred to as day or intra-day traders. This requires more time and effort as they need to monitor market trends and make trades more frequently based on daily market conditions.
- Mining: Many cryptocurrencies offer the ability to be "mined", which is the solving of a mathematical problem in which the "winner" who solves it first is rewarded with crypto. Crypto investors invest in buying the necessary computing hardware and software to mine cryptocurrencies and have the ability to earn crypto rewards in return.
- Staking: Staking is a process where investors hold their cryptocurrencies in a specific wallet to help support the network and validate transactions. In return, they receive rewards in the form of additional cryptocurrency.
- ICOs and token sales: Crypto investors have the ability to participate in Initial Coin Offerings (ICOs), also known as token sales, where new (to the market) cryptocurrencies are created and sold to investors before being sold publically. If the new cryptocurrency becomes popular and increases in value, the investor has the option to sell it for a profit.
What type of Crypto Investor are you?
There are 5 main types of cryptocurrency investors - Which are you and which type makes the most with their crypto investments?