What are retail investors? How can retail investors make money in the cryptocurrency market?
Cryptocurrency is a virtual currency that is not sold by legal tender institutions and is not subject to the supervision of the Central Bank. Cryptographic design enables the cryptocurrency to be migrated or paid only by the real owner. Of course, there are professional investors and some retail investors investing in cryptocurrencies. So, what are retail investors? How can retail investors make money in the cryptocurrency market? Next, let's have a look.
What are retail investors?
Individual investors, also known as individual investors, are amateurs who trade securities or funds including mutual funds, exchange traded funds (ETFs) and other packages of securities.
Individual investors trade according to traditional or online artist companies or other types of investment accounts. Individual investors purchase securities for their own personal accounts. Compared with institutional investors, the trading quota is usually much smaller. Organizational investors refer to professional asset allocation that may manage mutual funds or pension funds and large-scale investments carried out by fund managers.
How can retail investors make money in the cryptocurrency market?
1、 Low risk income approach
1. Cryptocurrency faucet
This is one of the least budgeted and easiest ways to make money with cryptocurrency today. All you have to do is do some small tasks to get smart (1satoshi=000000001BTC). These tasks can include browsing a website or watching advertisements.
Finding cryptocurrency taps is easy. Nowadays, the Internet is full of services that can give you small rewards at any time. The important thing is to choose a reliable portal, which can really provide you with profits. The highest scoring services are Bonus bitcoin, Moon bitcoin, Free bitcoin and AdBTC.
The airdrop is a free distribution of currency by the new cryptocurrency project to raise awareness and attract new promoters. You can find information about upcoming airdrops in unique forums (such as Bitcoin talk and social media) and their Telegram channels. Each cryptocurrency can have different rules. Some projects require you to share their posts on social networks, care about their accounts, write a brief comment, and even store another cryptocurrency.
For example, until 2025, the TRON Foundation will distribute BitTorrent (BTT) currency to each wave field currency holder every month. One way to interact with wave field coins is to set up an account on the Free wallet, which will participate in this activity and provide BTT coins for wave field coin holders on the Free wallet.
This method is still effective today. You can use air drop to get a small part of virtual currency. In fact, this kind of thing is rare, and the number of distribution is very small. Therefore, the main benefit gained from these events is the ability to use encrypted wallet.
3. Signing promotion activities
For many years, a famous encryption enthusiast forum has been carrying out the so-called signature campaign. You can use your account to promote the cryptocurrency project and receive rewards through each blog post you publish. However, only advanced accounts can participate in these promotion activities. Therefore, it takes time to upgrade your account to the required level.
Each project has its own rules for signature activities. These standards may vary in the amount of rewards, the number of posts required for rewards, the length of posts, and even the content you can write. Before participating in any sport, please ensure that you have carefully read the rules and standards, and then decide whether you can meet all the requirements. In addition, master the project, its team and development prospects to prevent hidden fraud.
2、 Medium risk return approach
1. Purchase cryptocurrency and hold it
Holding is a long-term deposit of cryptocurrency in order to make profits within a few years. This is one of the most common strategies when you want to make money with cryptocurrencies. Therefore, you need to do the following:
A large amount of funds suitable for this pursuit. Under no circumstances can cryptocurrency be purchased by credit method. You should never invest more than you can afford to lose in cryptocurrencies.
Research before investing in cryptocurrency projects. You need to carefully study the projects you are interested in, so as to know whether there are really high-quality goods behind them, and whether they are really an unprecedented technology that can affect changes in the global scope, rather than some stupid goods.
Have an iron will. After purchasing one or more of these cryptocurrencies, the main thing is patience. You need to be patient in case you lose your head and sell your property a few months later because of the market decline or other reasons. It is better to ensure that you hold cryptocurrency in the exchange and store it in your wallet to protect yourself from being hacked into the exchange and being damaged by unfortunate events.
2. Cryptocurrency mining
Today, if you want to make any profits, mining is no longer really important. The fact is that mining now requires expensive equipment and high electricity costs. You will not make profits immediately, but it is very likely that you will dig up a certain amount of cryptocurrency and hold it for further market growth.
If you don't want to buy expensive mining equipment, you can use cloud mining. In this case, you need to pay the enterprise rent and apply their equipment. But be careful, there are many fake companies. Among mature companies providing such services, GenesisMining and Hashing24 are among the best.
3. Equity pledge (Staking)
Equity pledge is the "mining" of cryptocurrency based on proof of equity (PoS) algorithm. You deposit a certain amount of currency to promote the operation on the blockchain and get benefits for it. In this way, you can passively obtain some benefits without purchasing expensive equipment, but you need to maintain the equipment online to participate in equity pledge. The reward will be distributed according to the pledge quantity of "Miner".
For example, if Jack has 1% of all issued tokens, he is entitled to 1% of the reward he received when searching for new blocks. This is a very rough description, but it highlights the general principle behind PoS algorithm.
There are many currencies that can be pledged. The most popular are DASH, Lisk, VeChain, NEO, Tezos (XTZ) and Cosmos.
3、 High risk return approach
1. Cryptocurrency transactions
Crypto trading is one of the key ways to make money from cryptocurrency. Trading cryptocurrencies and currencies is not much different from trading precious metals and stocks. The main task is to keep consistent: buy as cheaply as possible, sell at a higher price and make profits. The important difference between cryptocurrency trading and stock market is the high volatility of rates.
Trading is not based on conjecture and luck. Successful traders spend a lot of time learning principles, trading strategies and understanding market behavior patterns. In order to achieve sustainable success, cryptocurrency traders must learn the following professional skills:
Analyze cryptocurrency and transaction volume; Application charts and prices; Carry out transactions; Track bidding history data.
Once completed, they can trade well in the rising and falling markets, but they also realize that they can easily lose money within a few minutes. This is a highly profitable but highly risky investment.
2. Cryptocurrency lending
A popular way to increase capital is to become a lender on one of the credit platforms and sell loans in BTC and counterfeit currency. Such services act as an intermediary between lenders who must encrypt currencies and lenders who are willing to provide currencies at interest rates.
As this kind of loan is a risky project, the interest rate is very high. At first glance, borrowing seems to be a very attractive way for lenders to obtain passive income. Who can reject such a high return when earning 15% of money every year?
However, it is worth considering that such loans have no mortgage in fact. Therefore, it is highly likely that your money will not be returned.
3. Attend IEO
IEO (Initial Exchange Offering) is a crowdfunding method to provide funds for the project. It buys its currency at a very cheap price and expects them to grow significantly in the future. This may be a very profitable and risky way to make money.
Most of them are variations of ICO (first token issuance), but the activities are carried out on the exchange platform. The Exchange shall undertake the project quality and assess the feasibility, risk, operation and market position of the developed products. The fact that the trading platform bears the reputation risk in selling products enhances the trust of potential currency consumers.
In any case, the token price is easy to fall after the currency is sold. One of the hottest activities of IEO is BitTorrent (BTT) monetary activity. Although this project has been widely publicized, cryptocurrency has not performed well in the market today.
Speaking of this, I believe you have a certain understanding of what retail investors are and how retail investors make money in the cryptocurrency market. In general, I remind all investors here that although investing in cryptocurrency is a very popular project at present, the currency circle market is volatile and unpredictable, and investment is accompanied by certain risks. You must have a comprehensive understanding before entering the arena, and do not invest blindly.