It is difficult to earn on crypto using just exchanges but without special financial tools and tips that can make your money work, so in this article we will check how to increase this profit.
After creating wallets and registering at the trading platforms, the most interesting part starts: choosing an investment strategy. You invest your money, and the benefit depends on how accurately you assess the situation in the financial market. A reliable start is the use of proven exchanges. However, what other tips are there that will help earn more?
There are many crypto earning strategies and even more platforms and tools to simplify this process, saving time and other users’ resources. Below are the most interesting strategies in terms of earning and solutions that automate these strategies.
Trading bots to increase crypto profits on exchanges
Personal participation in trading 24 hours a day is simply physically impossible, therefore a trading bot that is able to track bets and make transactions itself comes to the rescue.
A trading bot consists of a number of a set of indicators and algorithms allowing the latest trends detection and can be a good choice to increase the trader’s portfolio by performing trades automatically on users’ behalf.
If the user has never used a trading bot before, it is better to start with the simplest bots that have a minimum of customizable parameters, but remember that such an assistant will not bring serious profit. More complex bots for crypto exchange will bring good income, but for this, traders need to gain some experience in order to properly configure it.
A typical trading bot, which is also known as an arbitrage bot, works only on a specific site and covers several services at once. Arbitration is a trading option. You will earn from the difference in exchange rates on different exchanges. The fact is that the exchange rate of digital currencies can differ at different sites, and this is a great way to make money. You should monitor the situation on the selected exchanges and sell the currency where the rate is higher, and buy where the rate is lower.
The main thing is to act promptly. It is worth a little delay – and you will not have time to make money on the difference. That’s why bots are usually used for arbitration. In general, trading can be a good passive income to earn up to $300 a month.
Classic trading on exchange
For absolutely win-win trading on cryptocurrency exchanges, it is worth dividing the bank into 4-8 different directions. It can be Bitcoin, Litecoin, forks or fiat pairs. Moreover, it is best to place orders no more than 2-3% of the amount allocated for each position. In the event of an unexpected dump or depreciation, it will allow a trader to win back even in the case of an initial purchase at the highest values.
To maximize the profitability of trading on the exchange and making good bets, according to the opinion of most crypto traders, the trader needs at least $ 1,000.
However, the minimum bid for a transaction on popular exchanges starts at $ 20-50. In general, it is more profitable to play for an increase, since the cryptocurrency market is growing again.
At the peak: futures trading
Futures contracts allow investors to earn on the movements of the Bitcoin exchange rate, without being its holder directly. Another advantage of this strategy is that investors can earn on bitcoins in countries where cryptocurrencies are prohibited (since traders do not buy and sell bitcoin itself, but a contract).
Trading in bitcoin futures and options has reached maximum levels. In May, trading in futures and other cryptocurrency contracts increased by 32% compared to April of this year. In monetary terms, this volume amounted to $ 602 billion. Moreover, the trading volume increased by 36% even on the Chicago Board of Trade (CME). This is the first traditional exchange that became involved in trading bitcoin futures and options.
The first crypto exchanges with futures support began to appear in the mid-2010s. In particular, in 2016, the famous Deribit exchange appeared in the Netherlands. The next step in the formation of the crypto derivatives market was the appearance in 2017 of bitcoin futures on the Chicago CBOE and CME exchanges. These futures were only settlement, but completely legal. Settlement futures does not give the investor the right to directly buy BTC but allows the trader to play on fluctuations in its price and insure against unexpected jumps.
To date, most of the crypto derivatives market falls on the usual crypto exchanges, among which the leaders are Huobi, OKEx and Binance. Along with the growing interest of institutional investors in cryptocurrencies, many alternative platforms start offering more interesting conditions for users. For instance, the European cryptocurrency exchange Cryptology offers traders a number of unique features such as fee-free deposits even by credit card and referral program for futures trading with up to 50% bonus.
Digital assets will rise in price as they spread, many experts are sure. For example, the research department of one of the oldest cryptocurrency exchanges Kraken predicted that the cost of bitcoin will increase to $ 350,000 in 25 years, as the younger generation will invest in it. An analyst at the Amsterdam Stock Exchange Michael van de Poppe predicted BTC to grow to $ 150,000 by 2025–2026.
One way or another, right now the market is truly unstable and it’s not worth investing the money that you are not ready to lose unless it is a long-term investment that thousands of people are consistently earning.