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Surprisingly few entrepreneurs have seized on the benefits of cryptocurrencies. Despite the risks, like all industries, the profit potential is orders of magnitude better than traditional finance.
It’s worth mentioning that the cryptocurrency industry is full of technical terms, but many of the basic concepts are similar to those in traditional finance, just with different labels. You can think of the terms “Web3”, “DeFi”, “Cryptocurrency” and “Blockchain” as almost the same thing.
Here are five easy ways to gain exposure to cryptocurrencies and make your money work for you in the most efficient way possible.
Related: 5 Things to Know Before Investing in Cryptocurrencies
1. Direct investment
There is nothing wrong with combining traditional finance with modern finance. Investing in a diversified crypto portfolio and waiting is a great way to make money, especially if you are experienced and prefer the fixed income market.
Despite its ups and downs, cryptocurrencies and the broader decentralized finance market have enjoyed an excellent compound annual growth rate every year — perhaps better than any other market.
So if you work on a three to five year time frame, the returns on a crypto portfolio can be very lucrative. You can also invest in safer cryptocurrencies and riskier tokens. Cryptocurrencies have a lot of room for innovation. Investing in this market is known as “HODLing” — hold on for dear life — Due to the volatile nature of cryptocurrencies.
2. Start a business
In the rise of any new industry, the most lucrative ones are often side jobs. During the California Gold Rush of the 19th century, the most money was made by merchants working on side jobs (shovels, boots, beer, lodging).
The cryptocurrency industry is like the rise of a new internet. It needs legal aid, PR, marketing, educational resources, blockchain engineers, web experts, content writers, social media experts, investment experts, portfolio managers, HR, talent acquisition, affiliate marketing, and more.
You can build a profitable business around any of the above and more. You might be surprised how easily your existing expertise can be transferred to the Web3 marketplace.A lot is the same on different infrastructures — Web3 infrastructure.
Related: 4 Tips for Companies Looking to Enter the Crypto Market
3. Early stage business investment
The world’s top entrepreneurs don’t usually choose to start new businesses. They simply invest in businesses that have the potential to generate decent returns at an acceptable level of risk. Entrepreneurs with spare capital can be attracted to new startups that may succeed.
The biggest returns in cryptocurrencies come from those who buy into specific items early on. From 2020 to 2021, the polygonal token MATIC will rise from $0.015 to $2.45. The price is now around $0.75 with a multiplier of around 50.
Tokens like MATIC can be likened to stocks within companies: MATIC tokens are growing as the wider Polygon company grows, but the upside potential for Web3 companies is far greater than traditional financial markets.
For those who get involved in such projects early on, the rewards can be huge. This is not typical and very rare. But for entrepreneurs in connected businesses, these are opportunities to watch.
Crypto Staking is available for most cryptocurrencies including Ethereum, Cardano, Binance and Solana. Crypto staking is the same as charging interest in a bank deposit account. The difference is that you retain ownership of the asset and the interest is usually between 4% and 8%.
So, it’s a very simple and straightforward way to make money.There is still a risk, you only get interest if your funds are locked — Funds must be deposited to earn interest. But this risk is small. More mature blockchains such as those mentioned above are unlikely to go anywhere. They are so powerful that your investments are generally very safe.
Crypto staking is built on the principles of direct investment described above. The price of your crypto asset, such as Ethereum, can appreciate in value, and at the same time you earn interest on that asset.
Related: How Crypto Education Can Change Your Business
5. Liquid pledge
Liquid staking is another way to make money in cryptocurrencies. Liquid Staking, invented by Web3 infrastructure company Ankr, is a game-changer in many ways. It allows users to gain interest from their staked tokens, but the tokens are not locked. This is done through derivative tokens.
In other words, the derivatives market is being introduced to the world of cryptocurrencies through Ankr and other platforms. Derivative tokens can be used for trading, lending, yield farming and other investment mechanisms. You can get double use. You might get a 4%-8% guarantee, and then lend the derivative tokens 4%-12%.
Of course, the marketplace for these derivative tokens was not developed or foolproof. This is not investment advice and all markets have risks. But it has been pointed out that liquid staking offers creative ways to maximize profits, which should pique the interest of risk-tolerant entrepreneurs.
put them together
There are many ways to make money with cryptocurrencies, many of which depend on your skills and preferences. A big problem with cryptocurrencies is that there are so many opportunities that it is difficult to focus and stick to a given investment plan.
In the end, however, the eternal principles still apply. Stick to your plan and work with them until they succeed. Don’t take every opportunity to shine because you’ll be split into too many different projects.
Pick your assets carefully and don’t bite too much. Even just basic cryptocurrency bets can offer good returns. Many people still lose money in Web3 due to sheer greed and bad investment psychology. Separating wheat from chaff is an important investment principle in all markets.