Must-read for beginners, summary of cryptocurrency profits
1. Trading
Spot Trading: Earning profits by buying low and selling high in digital currencies. This requires investors to have strong market sensitivity, be able to capture market changes in a timely manner, and pay attention to news, technical analysis, and indicators (such as mainstream coins like Bitcoin and Ethereum and potential altcoins). Spot trading is flexible but also requires managing risks associated with market volatility.
Futures Trading: Investors can buy or sell futures contracts to predict the future price trends of digital currencies. Futures trading can use leverage to amplify profits, but it also magnifies losses, making it riskier.
Arbitrage Trading: Focusing on price differences between different exchanges, earning profits by buying at lower-priced exchanges and selling at higher-priced ones. Arbitrage trading requires quick reactions and high market liquidity, but it has a higher technical threshold, and as the market matures, arbitrage opportunities gradually diminish.
2. Mining
Physical Mining: Purchasing specialized mining machines to validate transactions and generate new blocks by solving complex mathematical problems, earning block rewards. Physical mining requires a significant capital investment and consumes a large amount of electricity during operation, accompanied by high equipment maintenance costs, noise, and heat dissipation issues.
Cloud Mining: Purchasing hash power contracts from cloud mining platforms and entrusting the platform to mine. Compared to physical mining, cloud mining does not require buying and maintaining mining machines, making it easier to operate, but one must carefully choose the platform to avoid unreliable projects.
3. Investment
Hoarding Valuable Coins: Choosing cryptocurrencies with long-term growth potential, buying during market lows and holding for the long term, waiting for their value to increase over time. This method requires a deep understanding of market trends and patience, with higher risks, especially as market volatility may lead to asset depreciation.
Participating in the Primary Market: Investing through private placements, seed rounds, or strategic rounds before a cryptocurrency project goes public. Such investments require investors to conduct in-depth research on the project's team, technology, and market prospects, involving higher risks but potentially very considerable returns.
