Once you’ve mined your Crypto Currency, you can either hold on it in the same form it is in. Or you could exchange it for a newer currency. Here is a strategy that will help you trade whatever you mine. This will help increase your profit.
Before you develop your investing strategy, you need to learn how to evaluate a given Coin.
When buying cryptocurrencies, specifically altcoins, it is important to know a few details about them. A major thing to note when deciding whether to buy a coin, are it’s functional use cases. Most coins will have a mission statement on their homepage. By understanding what purpose a coin serves in the real world, we will have a better idea of how to evaluate it further. For example, Litecoin has the same goal as Bitcoin. In this case, it would be a good idea to compare its market capitalization with Bitcoin.
If you notice a large shift in market cap on a certain date, it may be worth it to check for any news that day to see what may have caused it. This can be extremely useful as positive and negative press can really affect Crypto Currency.
On the other hand, some coins serve a very unique function in the real world. For example, Power Ledger is a fairly new and interesting cryptocurrency. The goal of this project is to provide a system for consumers to trade electricity with one another. If you believe in this idea and the technology around it, invest in it. If you feel it’s a far fetched idea, avoid it. The second thing you can do is read news surrounding the project. All of that information, along with a look at the coin’s market cap, is going to ultimately determine whether you think the technology might reach mainstream adoption, thus making an investment worth your while.
After some time using exchanges to buy and sell currency that you’ve mined, you’ll notice something huge. You will notice that the price of a crypto currency is often not the exact same on each exchange. That means, you can buy a crypto currency on one exchange for a cheap rate, and sell it on another for a higher rate. This is called Arbitage.
You need to be careful here though. It needs to be as close to real-time as possible. This is possibly one of the hardest things to get right, and also the most underestimated aspect of arbitrage in crypto currency. The markets, compared to ForEx trading, are ridiculously slow – at busy exchanges, there may be a couple of dozen trades executed. The difference of a few seconds can be the difference between a profit and a loss
In 2018, you need to not only mine Coins, but also trade them to maximise your profit and increase your own holdings. With this guide, you are well on your way to learning to do so