How to profit from bitcoin trading, mining and holding

There’s an air of uncertainty around bitcoin at the time of writing, so quite a number of cautious traders have sold their stock. After all, maybe the dark prophecies of skeptics about the fall of bitcoin are true? Maybe it will all go bust tomorrow? Maybe now is not the right time to ponder how to profit from bitcoin?

Our position is that the price of bitcoin will eventually crawl up, no matter what. Keep on reading, if you agree on that. 

Unless you are a fan of scam tokens like Bitcoin Turbo Koin, or crypto gambling services, it is perfectly possible to make money on trading, mining, speculation, or long term investments. So ready you bitcoin wallet.

How to profit from bitcoin basics: security

Some part of your assets that are being actively traded will invariably be stored on a cryptocurrency exchange account online. Although such giants as Binance surely take care of their security, talented hackers step out from the shadows from time to time and steal $40M in the blink of an eye. It may not even be the fault of Binance itself; the users might have left enough authentication data for hackers to let it happen.

Hot wallets are risky. Cold wallets are more reliable yet somewhat less convenient and user-friendly. That said, have you considered an open-source Trustee Wallet? We’ve designed it to be the best of the two worlds.

How to profit from bitcoin basics: diversification

Holding 100% of your crypto investments in bitcoin is a horrible idea. Split it between Ethereum and Litecoin at the very least. It would be a lot better to gradually add various altcoins to the portfolio, so that even when the bitcoin price experiences a crash, the total value of your assets will not suffer a devastating blow. Altcoins and the other major crypto assets will pull it up.

Expand the portfolio with dozens and or even hundreds of promising altcoins.

How to profit from bitcoin mining

The easiest path, almost zero-effort, is to find a bitcoin mining farm and invest into it. If you are willing to risk giving away the money for a tiny return-of-investment. We won’t even include the links to these services because, considering the murky history of them, it is best to avoid any kind of advertisement or financial advice.

You’d buy shares of a company that produces ASIC miners: it is like investing into a pickaxe manufacturer during the gold rush.

How to profit from bitcoin mining: pools

Suppose that you have a strong determination to buy an ASIC (because there is no other way to efficiently mine bitcoin nowadays).

Calculate potential earnings to see how much surplus you can get. Each particular mining pool should display their pay outs per terahash of computing power of the said ASIC. Then, you can estimate the electricity expenditures based on the power consumption rate of the latter and the cost the electricity costs. Finally, subtract the income tax from the earnings. Are you still content with the result?

How to profit from bitcoin mining: solo mining

Far more effort and money is going to go into construction of a custom-built mining rig. It may occupy a separate room in your dwelling and certainly need proper cooling.

Take into account the abovementioned expenditures on energy and taxes.

Mind that, unlike participating in a collective mining that guarantees a small payout, solo mining is like a lottery: you get a jackpot if the network allows you to process the next block. Otherwise, the energy, effort, and money go to waste.

Of course, the chance to add the block to the blockchain is proportional to the total computation power, and it’s pointless to mine with a single ASIC. Each of them will cost about $5,000.

How to profit from bitcoin trading

A true story about profitability of HODL keeps inspiring hundreds of newcoming traders. It also works fine for top tier traders: buy and hold, diversify. It is a win-win: no matter what happens to a few coins in your portfolio, the other projects will bring x10, x100, or crazy x1000 in the right time, covering the initial spending excessively.

Crypto is the new gold, silver, platinum, and palladium.

How to profit from bitcoin trading: day trade

Investing and holding bitcoin does not yield too much adrenaline, which is, indubitably, its biggest downside. To feel more alive, one may try to catch the daily cycles of bitcoin price and enter the community of day traders. Prepare to withstand immense mental pressure and proceed with building up a solid system of rules that protect your starting balance and multiply it day by day.

How to profit from bitcoin trading: futures and options

Perhaps more tricky from the legal or economic point of view, futures and options are the deals delayed in time.

Some of the platforms that enable trading bitcoin futures and options are Deribit, LedgerX, and FTX. Needless to say, the proper estimation of bitcoin price at the moment of deal expiration is the core skill here.

It is fair to say that patient and gradual buy & hold strategy remains the simplest way to make fortune with bitcoin.

How to profit from sale of bitcoin

The experienced traders taunt the newbies calling them Hamsters. A hamster is not the one who buys crypto during the highs, it is the one who sells it on the lows, giving in to mass panic and losing the nerve.

How to profit from sale of bitcoin: hold it longer

The right approach in trading is to do exactly the opposite. Wait out the panic and the price of bitcoin will most certainly rise again during the next growth cycle.

When the price dips down and it is lower than the price of the initial purchase, some traders would suggest to buy more BTC, which is counter-intuitive. The reasoning for this is to lower the average price of investment, per coin.

How to profit from sale of bitcoin: detect the cyclical high

One has to be very attentive and intelligent to figure out the cycles in bitcoin price. They are surely connected to the dates of Bitcoin halvening.

Based on this BeinCrypto research, the next high is expected somewhere at the end of 2022. The research is pretty outdated so here is a live tool that tracks the bitcoin price and illustrates the highs and lows on a rainbow chart.

We just gave only a couple of sources that may help to determine the right moment to sell. Your personal experience and awareness of the situation on the market will help to find further hints about the moment of a perfect bitcoin price peak.