Crypto

Learn now to choose the strategy that suits you best

Written by CHANEL G.

1. Arbitration

To make a profit, cryptocurrency investors around the world take advantage of the differences in buy and sell prices on exchanges. This is especially useful during volatile periods. This article will discuss what arbitration is and how it works.

What’s the secret?

You can arbitrage by transferring cryptocurrency from one exchange. If you can find a way for you to buy at a lower rate and then to sell at a higher price, it’s easy to transfer to the lowest exchange. This activity is crucial because price fluctuations can happen very quickly. Investors need to monitor the prices of exchanges they arbitrate. Portals such as Cointrader Monitor and Biscoint Monitor can help.

Transactions sometimes take too much time and profits can be lost or reduced by the delay in which the money arrives at another brokerage. Keep in mind the average speed of brokers. Coinext is one example of a company which prioritizes cashout requests. Robotic arbitrage may also be possible for investors. However, this requires further education and programming.

Benefits

Arbitrage is possible because cryptocurrencies can be volatile. They can profit large amounts from fluctuations in the daily price of cryptocurrencies. You can make significant gains by using many altcoins. These rates can be used to convert between Bitcoin and traditional currencies (Real, Dollar, or Bitcoin). Arbitrage using cryptocurrency is a great option. The number of exchanges around the globe and Brazil increases your chances of making a profit.

Both advantages and risks

Arbitrage can be a risky investment and could lead to loss. You should thoroughly study and read all available information before you begin practicing arbitrage. More information is better.

You must trust trades made with exchanges. Arbitrage funds may not be available to the broker. This is worth looking into. Coinext is the only Brazilian exchange offering insurance that will cover your reservations in case of hacker attacks. Arbitration can be the difference between profit and loss, even though the fees difference between Coinext and brokers may not seem to be significant.

There are always problems. An example of this is when an exchange runs out of hot wallet resources in a busy day. It is important that exchanges are familiar with arbitration and how they can assist you.

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2. HODL

Every investor is different, regardless of whether they invest in traditional stock markets or cryptocurrency. Warren Buffet is the most well-known investor. He prefers to buy assets and hold them for an indefinite time or for a longer period. This strategy is called “HODL” by crypto investors. This involves purchasing cryptocurrencies and keeping them for long periods of time, sometimes for many years, for different purposes. This article will describe what “HODL” means and how it works.

Term origin

It is unclear where this name came. After Bitcoin reached $ 1000 in December 2013, many investors sold their Bitcoin assets. Further sales drove the price down as more supply was available. A Japanese investor decided not to sell any stock in order to prevent currencies from increasing in value. The Japanese investor posted an energetic message online declaring his intention to keep the stock, but then he lost track and wrote “I AM HOLDING”. This was quickly made viral on the internet and became a HODL phenomenon.

What is the answer? Hold How can I get started?

It is a smart idea to think about the potential for any investment, regardless of whether it be in stocks or cryptocurrencies, real estate, or both. Learn about cryptocurrency’s potential, structure, and prospects before you invest. This is the fundamental principle of fundamental analysis: Value increases and grows when it is built on solid foundations.

Holder of cryptocurrencies is an option for those who can see its potential, and embrace the digital revolution. Year after year, we have seen an increase in the number and types of digital currency-friendly services, payment methods, and stores. This is a sign digital currency will be used on a large scale sooner than anticipated, so it makes sense that it is valued fairly. They don’t want to miss out on investment opportunities and will take advantage of them before they become too expensive.

Holda provides a good example. A history of Bitcoin’s highs, and lows creates a pattern. Investors, even in low moments like this one, are optimistic about the future. This is the moment holderstake the opportunity to invest and strive for the next height. Although the classic saying is “buy low, buy high”, it can also be used for many years. Bitcoin is not a long-term investment. Guilherme from Criptomaniacs did a long-term analysis of the “rainbow charts”, which were logarithmic scales used for Bitcoin valuation. This reflected the upward trend.

A 37,000% profit was made by holding Bitcoin. Imagine investors who purchased Bitcoin at a record-breaking $ 198 in 2013 and decided to keep it the whole time.