Blockchain Investing options

When you start investing in cryptocurrency, you have a couple of ways to earn money.

Which one is best for you depends on your knowledge level and your amount of time you are willing to invest. 

Let's go over the suggestions:

1.  HODL
2.  Daytraden
3. ICO/Presales
4. DeFi staking
5. Borrowing/Lending
   
6. Leveraged trading 
   
7. Guided investing
8. Outsourced investing
   

HODL
As mentioned before, HODL stands for Hold On for Dear Life.

People who HODL are convinced the price of the coin will go up in the long run.
They do not get scared when the market plummets, what goes down must come up again.
Most people who hold their coins in the long run, pay little to no attention to the moment of buying.

A method often used is the DCA (Dollar Cost Average), this method aims to reduce the impact of volatility on the total investment. For example, when you want to invest € 1200,- you can invest € 100,- a month without even looking at the charts. Besides reducing the risk of volatilty you also save a lot of time, as you do not need to do your research in timing the trade. As you do not need to time the trade, you will not have to educate yourself in technical analysis, which will save you time as well.

When I HODL I try to time my purchase, as I do love to buy my tokens with a nice discount.

Timing your purchase takes knowledge of the marketprices and of technical analysis.

Traders I know use only the price and the trendline to establish a good entry point.

You can hold your coins, but you can also do a bit more. Most exchanges offer the possibility to stake your coins. Staking works the same as putting your money in a savingsaccount.

You will earn a % reward expressed in APY (annual percentage yield). You will receive coins according to the APY. The stakingpercentages differ greatly per exchange. Be aware, some exchanges offer fixed staking options for a certain period. The percentage you see, is the percentage per year and not per short period! Staking can provide some extra passive income and you know I like that.

Binance also has the option to put your coin in a savins account and earn a rather modest percentage per year. But if you intend to HODL, every little bit you get extra is nice.

Long story short:

– HODL takes less skill, ideal for starting crypto investors

– It does not cost a lot of time

– It provides a way to create a passive income

– Timing the market may yield you more dividend in de long run.

Daytrading
The goal of daytrading is to buy your tokens low, sell them high and buy more tokens back for the same money. When the price goes up again, you will have more money as well.
When you are just getting started, the name daytrading can be a little misleading.

Depending on your tactic, you can stay from only a couple of seconds up to a couple of days in a trade.
The major advantage of daytrading is the power of compound interest. If you can make a trade with 1% net profit every single day of the year, you will have 37 times as much money after the end of one year. Making a 1% trade every day in a highly volatile market should not be that difficult.

Easy money, isn't it?

What is the catch? In order to make a 1% trade every day, you need to obtain the skill of technical analysis. There are a number of markers that can predict how the market will react. But trading is an emotional activity and no marker can tell what people do out of emotion. When you entered the trade and the market plummets, you will have to sit out the dip, or take your loss and enter a new trade another time. Investing in your knowledge about risk management, money management, reading charts and recognizing the right moment to step in, will pay great dividends in the long run.

One major lesson in daytrading is to change the perspective, do not only look at the 3 minute chart, but also at the 15 minute chart and the 4 hour chart (or another larger timeframe). This will give you a clear view of what the trend of your coin is at the moment. Is the trend upwards? Is the price going down? When the trend on the 4 hour chart is upwards and the 3 minute chart shows a dip, this normally would be a sign to enter the trade.

You should avoid trading out of emotion. Fear of missing out can cost you a lot of money.

When in doubt, do not make the trade.

When you daytrade, you need to constantly check what the market is doing. Compared to HODL daytrading takes a lot more time.

A long story short:
– daytrading can be extremely profitable
– daytrading takes considerable skill and knowledge
– daytrading takes a lot of time

The lesson to be learned: Invest in your knowledge and keep your emotions in check.

ICO/Presale

One of the fastest ways to make money in the world of crypto is joining an Initial Coin Offering or participating in a presale. Obviously this is one side of the coin. You may also very well lose your money just as fast when you enter a presale. That's why you need to pay close attention which project deserves your hard earned cash. One will give you a great ROI, the other one will liquidate you faster than you can blink your eyes.

What do you look for in a new coin?
Nowadays a lot of memecoins get launched after DOGE coin performed ridiculously well without even having any utility. Now you have SHIBA pulling a DOGE. These coins offer little value, but they have a lot of hype. Hype is needed for a coin to grow exponentially. Knowing which coin will have a lot of hype is a bit harder than telling it in hindsight. I look for an active and growing community, most crypto communities are active on Telegram or Discord. The rate a community grows can be a good indicator for the amount of hype that is being created.

One thing you can determine is the utility of a coin. What does it do? BNB for example, is the native token of the Binance Smart Chain. You need BNB to do any kind of transaction on this chain, like buying, selling or staking. Blockchain is still rather new and a lot of utility is still to be utilised. When you find a coin that actually solves a real life problem, you have struck gold. 
Check out the website of the coin. If it looks like a child made it, it probably has. Look for professional looking websites.

Do you want to learn all there is to know about ICO investing? Check out our ICO course in the Get Financially Smart Academy.

DeFi Staking
Let your money work for you. How cool would it be, if you invest in a coin and earn extra money with it?
The best part? You hardly need to do a thing!

Staking is best to be compared with putting money in your traditional bank account and earning an interest on your initial investment. You simply put tokens into an account and earn interest daily.
If you choose to reinvest your rewards, you make use of the power of compounding interest.
This is a nice way of growing your crypto portfolio witouth putting additional funds into it.

You have a couple of options:
1. Stake native token / earn native token;
2. Stake native token / earn ABC token;
3. Stake ABC token / earn native token;
4. Stake ABC token / earn ABC token

1. Stake native token / earn native token
Native tokens are almost always inflationary, meaning the value of the token goes down, when the demand is not continiously increased. In a bull market, this is not a problem, as the demand is much higher than the inflation. In a bear market it does become a problem. Something to keep in mind when you asses the risks. Usually the APR is one of the highest when you stake native tokens. The DeFi platforms often burn a batch of tokens once in a while to bring the price back up.

2. Stake native token / earn ABC token
Stake the native token to earn a blue chip token, like BTC or ETH. Some even give out BUSD (Stable coin always worth one dollar per token).

You could also stake the native token to earn an upcoming token.
This could be very interesting, since the value of an upcoming token might increase heavily over time.
If you get for example 100 tokens worth $ 0,01 per token, you would receive $ 1 dollar in interest.
That is not that much, but when the project hits mass adaptation and takes off, the price per coin might as well be $ 1 per coin. Your $ 1 dollar interest, you got for free, is now worth $ 100!
This is a very low risk way of investing in new tokens, without actually buying the tokens!

3. Stake ABC token / earn native token
Stake a blue chip token to earn native token. Because of the lower volatitily of the blue chip token, the APR is lower than the first two options.

4. Stake ABC token / earn ABC token
Stake a blue chip token and earn a blue chip token. Most of the time this gives you the lowest APR. Than agian, this is also the staking option with the lowest risk.

The same goes for creating liquidity (LP). You combine two tokens and couple them together. Now you will earn rewards for each transaction made in this token pair. You may also choose to stake your LP to earn native token. We will post more about creating a LP later.

If you want to keep the risk lowest, I would advise you to stake a blue chip token, like BTC or ETH and earn interest on them. Interest rates are lower, but the volatility of the coin is also much lower. Meaning your risk of losing your money is not that high. You could reinvest the earned money in more risky endeavors. This way you let your money work for you, without putting your initial investment at risk.

Stake your tokens on BiSwap now and earn very high dividend by using my referral link:


Use our referral code to help us facilitate high quality information for free. It will not cost you anything, but you will help us with it.

Any questions about staking?

Schedule a one-on-one session now via:

richard@getfinanciallysmart.nl or via +31681464630

It will take roughly half an hour up to an hour to explain the basics of staking, so you than can go ahead without our help.

Learn more about DeFi investing here.

Guided investing

If you are interested in investing in the blockchain, but you are not sure where to start or what to do, 

you may use our Investing Guidance Service. We will guide you step by step along the way.
With our vast experience we are able to guide newbee investors and turn them into moderate and experienced investors. It is our goal to guide you on your way to being a autonomous investor, where 
you will have obtained the right knowledge and skills to make it on your own in the Wild West that is the world of crypto.

Our fee is € 100 per hour. You may choose how long the guidance takes, with a minumum of 15 minutes per time. You can both pay in fiat or in BNB.

Subjects where we help:

• setting up Metamask wallet (or any other type of wallet, with respect for your privacy);
• sending funds from one wallet to another;
• staking on centralised exchange;
• staking on decentralised exchange;
• providing liquidity;
• participating in presales;
• bridging funds from one chain to another
• compounding interest/yield
• etcetera.

Interested?
Book your first session now via richard@getfinanciallysmart.nl

Outsourced investing

If you are interested in investing in the blockchain, but you do not have the time, the knowhow or the willingness to do so, you can outsource the investing to our professional team. 
This way you can sit back and relax and let your money work for you.

Please note the outsourced investment part is still under development.

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