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Types and ways of crypto investing in 2021

25.10.2021
Types and ways of crypto investing in 2021

Crypto investment 2021. Best ways.

The high demand for cryptocurrency is due to the fact that the owners of digital currency can make an investment and increase their funds. Today, there are many ways to invest in cryptocurrency. However, many people have a question of how to invest their funds properly to get a return on investment.

To begin with, each investor needs to use a wide range of tools and methodologies to analyze the crypto market. These methods are divided into two categories:

  • fundamental analysis (FA)
  • technical analysis (TA)

What is fundamental and technical analysis?

Fundamental analysis allows investors and traders to figure out the intrinsic value of an asset or business. For this, it is necessary to investigate internal and external factors. The obtained results will help you determine the strategy that will bring you a huge income.

With the help of technical analysis, investors can predict the possibility of price movement based on past data, price charts, and market trends.

These types of analyses differ and use different approaches, as well as methods to collect information about a business. In terms of objectivity, neither fundamental nor technical analysis is the best method of investigation, as each of them provides valuable information. Most investors and traders combine these two types of analyses to obtain more detailed information about the crypto market.

Types of investments in cryptocurrency

Trading

You must be aware that blockchain and cryptocurrencies are already being used in many areas. Undoubtedly, speculation is one of the most common use cases of earning money nowadays.

Trading usually involves making a profit in the short term. Traders constantly open and close positions. But, how do they determine when to enter and exit a trade?

One of the most common ways to understand the cryptocurrency market is a way of using technical analysis (TA). Technical analysts study charts, history of the price, and other types of market data to find trades with good odds of profit.

Investment

Investing in cryptocurrencies is one of the easiest ways to make a profit. All the investor needs to do is create his account. Also, there is no need to invest a large amount of money, as the minimum investments in a cryptocurrency start from a few cents.

Passive income

In addition to trading and investing, users have the opportunity to receive passive income from cryptocurrencies. Trading and investing require effort and a lot of time, so passive income is suitable for those people who are busy but want to increase their profits.

Types of passive income of cryptocurrencies

Mining

Mining is considered the oldest method of receiving a passive income. To earn coins with this type of passive income, you need to use computing power equipment to make your network safe and receive coins. By the way, there is no need for cryptocurrency holding. It should be noted that you should have initial knowledge related to investments and technologies before you decide to set up and maintain mining equipment.

Staking

Staking is considered an alternative to mining, but this kind of investment significantly wastes fewer resources. Investors have to keep funds in a suitable wallet and perform different network functions, for example, validating transactions. Due to performing each one of these actions, users receive coins. The stake helps maintain the network’s safety due to ownership of digital assets.

Staking networks use Proof of Stake as a consensus algorithm. There are other versions of the algorithm, such as Delegated Proof of Stake or Leased Proof of Stake.

As a rule, there is created a separate wallet for staking with the aim to store coins on it. In some cases, this process includes adding your funds to the total or delegating them to the staking pool. There are several exchanges that will do this for you. All that is required of you is to keep your tokens on the exchange, while all aspects of this process will already be considered.

Staking can be a great way to receive your cryptocurrency with a minimum amount of effort on your part. However, staking is used as a tactic that artificially inflates your predicted earnings in some projects. For this reason, it is recommended to study in detail the economic model of tokens, as the amount of your reward may be less than the predicted one.

Lending

Landing is a passive way to earn a percentage of your crypto assets. There are a huge number of peer-to-peer (P2P) lending platforms that allow you to lock some of your funds for a certain period of time to receive profit. The interest rate can be fixed and determined by the platform, or you are allowed to set it based on the current market rate.

This feature is natively implemented on some exchanges with the margin trading option.

This method fits for long-term holders who want to increase their profits without much effort. It should be noted that locking funds in a smart contract bears the risk of possible bugs.

Setting up Lightning Network node

The Lightning Network sits on top of a blockchain to make easier fast peer-to-peer transactions.

Lightning Nodes supply liquidity and expand the capacity of the Lightning Network by temporarily locking bitcoins within channels of payments. After completing the transactions, the nodes charge a fee of payments that run through their channel.

Setting up a lightning node can be a problem for a bitcoin holder who is not tech-savvy. For this reason, all the nuances must be taken into account, in particular, that the rewards for work depending on the general determination of the number of payments in the Lightning Network.

Affiliate programs

Some cryptocurrency companies may give you a reward for bringing new users to their platform. This includes affiliate links, referrals, and many other rewards that are provided to new users you invite.

Masternode

A masternode is more like a server running on a decentralized network, which has more functionality than other nodes.

Projects that issue their tokens tend to provide special privileges only to those participants who have a high incentive to maintain the stability of the network. Masternodes require a large initial investment and technical knowledge to run them.

Forks and airdrops

Taking advantage of a hard fork is a relatively simple strategy for investors. To do this, you must have coins in your wallet for which the hard fork date has already been published. If there are several chains after a fork, the holder’s balance is duplicated in each new blockchain.

Airdrops are like forks and demand to have a wallet during the distribution of the airdrop. Some exchanges periodically distribute the airdrop to their users. Please note that you will never be asked to provide your private key to receive an airdrop. Otherwise, this is a sign of financial fraud.

Why is it worth investing in DBX cryptocurrency?

Nowadays, one of the most popular cryptocurrencies for investments is considered the “DBX” token. Although this kind of coin was recently developed, it has already attracted a huge number of users who would like to invest in this token.

“DBX” token is issued by the digital ecosystem “DBX”. It is a decentralized asset, allowing investors to use it to enter other investment areas. This solution helps to make an investment system more flexible. "DBX" builds communication in the digital space to the growth of people's interest in the cryptocurrency market and the simplicity of the transactions.

The creators of "DBX" aim to provide the users with digital tools that are protected from third-party interference for everyday payments and long-term investment purposes. The "DBX" tokens have been installed on two blockchains known as Quark and ERC-20. Due to the Quark uses in POW or POS consensus mechanics, the team of DBX could provide their users a high level of security and anonymity while maintaining the operation of the cryptocurrency ecosystem. As far as concern the protocol of ERC-20, it provides the flexibility of transaction and quick integration of the users in Defi space.

DBX platform provides its users with the following types of investments:

  • Crowdsale
  • Masternode
  • Airdrop
  • Referral program, etc.

The DBX team offers various ways to invest in cryptocurrency on favorable terms. The detailed information about investments in DBX tokens can be read here.