We know this site is about casinos, but making money by trading cryptocurrencies is another form of gambling, so we thought we would put together a guide to show you how it’s done.
The truth is, you can make insane amounts of money trading cryptos. There are lots of different ways to do it, and there are some events you can take advantage of to greatly improve your chances of making profits trading cryptocurrencies.
One way to get your first crypto to trade is to play at the top Bitcoin casinos. Once you’ve got some, focus on the rest of this text.
Is Crypto Trading Really Gambling?
While traders like to think they’re different from casino gamblers, the truth is there isn’t much difference at all. Both are risking some capital in order to try to win more back, and so by that definition of gambling, yes, trading cryptocurrencies for profit is a form of gambling.
The main difference is that when you play casino games, you’re playing against the house, and each game has fixed mathematical probabilities which give the casino an advantage. This is known as the house edge, and each game has one.
For example, blackjack has a house edge of just 0.5% when played with perfect strategy, whereas games like craps can have a house edge of as much as 15%, depending on what bet you make.
When you trade cryptocurrencies, you’re not playing against the house. You’re trading in the open market with other people. The aim is to buy low and sell high. So, yes, cryptocurrency trading is gambling, but it’s fundamentally different to casino gaming in the following ways:
You don’t play against the house. You play against other participants in the market.
If you’re patient and wait out price dips, you don’t have to make a loss. If you pick solid projects to invest in, it’s unlikely your investment will go to zero.
There are no fixed odds or payouts in cryptocurrency trading. You could make 2x your money or 2,000x your money. It all depends on what happens with the project.
There are a number of different ways to trade cryptocurrencies. We’ll get into that in a later section.
Research and strategy really do make a difference when trading cryptocurrencies. You can increase your odds of making money dramatically by trading smart.
How to Buy and Sell Cryptocurrencies
Since cryptocurrencies fall under the category of ‘financial markets’ there are a number of different ways to get involved in trading cryptocurrencies.
Buying/Selling Actual Cryptos
This is by far the most common way to trade cryptocurrencies. You sign up for an account on a cryptocurrency exchange like Coinbase, and you exchange your money (USD,EUR,GBP,AUD) for Bitcoin, Litecoin, Ethereum, or any of the popular cryptos.
If you want to trade ‘altcoins’ like Tron, Ripple, or Stellar Lumens, you’ll likely have to buy Bitcoin first, then move that Bitcoin onto an exchange like Binance, where you can trade it for altcoins. This is easy, and although it’s an extra step, the altcoins are where the 1,000x returns are made, so it’s worth it.
The idea here is simple. You buy bitcoin or other cryptocurrencies when you feel the price is low and you patiently wait until the price rises. When it does, you sell, and rinse and repeat.
Since cryptocurrency prices fluctuate like no other kind of asset, it’s possible to make 20-30% in a week. Of course, it’s also possible to lose that much, which is what makes trading cryptocurrencies so exciting.
Spread Betting Cryptocurrencies
Spread betting is an interesting way of trading, but it’s not legal in the USA, so if you’re American, you can skip this section. However, if you’re from virtually anywhere else in the world, there’s a good chance you can make money spread betting cryptos.
Think of spread betting as riding a wave up or down and profiting from it. You denominate a value per dollar, say $5 per $1, and pick a direction you feel the price will move in. Using the numbers above, for every $1 Bitcoin moves in the direction you predict, you’ll make $5. You’ll lose $5 for every $1 it moves in the opposite direction until you hit your ‘stop-loss’ or limit and the trade closes.
You don’t have to bet as much as this, of course. Some crypto spread betting sites allow you to bet as little as $0.10 for every $1 the crypto price moves. On the other hand, if you’re a serious trader with a massive bankroll, you can bet as much as $10,000 per $1 the price moves.
There are some important concepts to understand before you dive in and spread bet cryptocurrencies. For example, you’ll need to understand how to use stop-losses and what trading on margin means.
Once you understand what you’re doing, spread betting is one way to make money trading crypto, and lots of it!
Crypto Futures Contracts
Futures contracts are established financial instruments and have been used for a long time to help create stable prices in markets. At the time of writing, the only cryptocurrency you can trade futures on is Bitcoin.
The idea with futures is that you buy or sell Bitcoin at the price on a certain day, and you agree to fill that order a set period of time in the future. For example, you could agree to sell Bitcoin at $10,000 per coin in 30 days time. If the price is lower, you’ll profit the difference, whereas if it’s higher, the person on the other side of the trade will pocket the difference.
That’s how futures trading works, in a nutshell. We advise you to do a lot more research than this, though. This is just a broad overview of the subject, and it is slightly more complex.
In general, we don’t recommend trading Bitcoin futures unless you know what you’re doing. The easiest (and best) way to trade cryptos for profit is to buy and sell the actual coins.
We just wanted to include futures trading to give an complete examination of crypto trading and to list it as an option for some of the advanced traders who may be reading.
How to Make Money Trading Crypto
Each cryptocurrency trader has his or her favourite cryptocurrency trading strategy. There’s no absolute right or wrong way to do it, but we’re going to include a few of the profitable ways to trade cryptos here.
We’re not advising you to use any of these strategies in particular. You’ll have to do your own research and make your own mind up.
Buy Hidden Gems & Wait
If you have a long-term mindset and you don’t mind waiting months or even years for huge profits, this buy and hold strategy could be right for you.
The idea is to do your research, find crypto projects with a lot of potential, and buy in while they’re still in their beginning stages or after they have taken a price dip and you think they’re oversold.
You’ll need to read the project whitepaper and find out about the team running the project and its future goals. It’s possible to make hundreds or even thousands of times your initial stake when you take this approach as the projects mature, people see the potential, and more buyers bail in.
Cryptocurrency traders refer to this strategy as ‘HODL’ after a famous message on Reddit where a drunk trader type ‘HOLD’ incorrectly while drinking. If you had taken this approach and invested $100 into Bitcoin when it was $0.10 back in 2010, you would now be filthy rich.
Buy the Rumour, Sell the News
This is a popular crypto trading strategy which relies on the demand which positive news creates. It works in most markets, and it can lead to some spectacular price rises.
For example, lots of crypto projects announce on Twitter that they are forming partnerships and ‘all will be revealed’ on a specific date in the future. This tends to send the biggest holders into a frenzy, who then go out and ‘pump’ the coins on their various social media platforms.
This creates ‘FOMO’ or Fear Of Missing Out. Since everybody knows a big partnership could make the price multiply by an unknown magnitude, they don’t want to miss out on the action, so they buy into the project hoping that the announcement will live up to the hype.
Sometimes it does, and other times it doesn’t, but it doesn’t matter when you’re planning to sell the news. The idea here is to get in weeks or days before the announcement, ride the wave up, and sell right when the announcement is made (or just before it).
Typically, the price dips right after a major announcement as lots of traders take their profits. Savvy traders can therefore ride the wave up, sell their coins, and place a spread bet (see above) on the price falling immediately after the news is announced.
Of course, this will only work if spread betting or short selling is enabled on that coin. It is for most well-known coins on platforms like Bitmex, but with some of the more obscure projects might not be able to do this.
You can still buy the rumour and sell the news, though. That’s enough to make a million in some cases.
Sell the FUD
Cryptocurrency is a subculture with lots of acronyms and a language all of its own. FUD is an acronym for Fear, Uncertainty, and Doubt.
Now, to make money selling cryptocurrencies you have to use instruments like futures contracts or spread bets. You’ll have to decide which is right for you, and we don’t want to make any specific recommendations in that regard here.
Selling something you don’t actually own yet is also known as ‘shorting’ or ‘short selling’. It’s possible to make incredible amounts of money, but it’s also risky since the price can keep going up infinitely if you predict incorrectly.
Selling the FUD means shorting a crypto when bad news comes out about it. For example, an expected partnership announcement could be a dud or a crypto blockchain could get hacked. There are any number of bad things which can happen which spook investors who will want to bail out at least until things settle down. This is where fast-thinking short sellers can make a killing.
Remember, short selling is extremely risky. Then again, you’re a gambler, and there’s no risk without reward. Just be sure to use risk management tools like stop-losses to close your trades automatically when you hit a predetermined loss.
Catch a Rocket to the Moon
As you might have guessed, the idea behind this strategy is to invest small amounts of money into lots of different crypto projects. For example, if you had $10,000 you could invest $10 in 1,000 projects, or $100 into 100 projects.
The majority of these crypto projects are going to fail or trade sideways for a long time before disappearing into oblivion. However, the money is made on the few which achieve extraordinary success. These are the crypto gains which blow minds and which dreams are made of.
One example would be the rapid rise of RaiBlocks (Nano). On December 1st 2017 it was worth just under 2 cents, and by the start of January 2018, it was worth $34.40.
A rough calculation tells us that $100 invested in Nano at the beginning of December 2017 would have been worth more than $18,000 30 days later.
You only need one of those to cancel out all of the other small losses and then some. If you get two or three projects like that through one $10,000 investment spread out over dozens of projects, you could be looking at serious money.
If you lose $10 or 990 projects and make $5,000 on 10 projects which succeed, well, you do the math!
