3 Alternate Strategies For Cryptocurrency Investors To Make Money In 2019
2017 was an annus mirabilis for cryptocurrencies, so much so that one could whimsically throw a bucket of paint at a wall and conjure up a Monet. This would not be an exaggeration of the euphoria that drove cryptocurrency markets to new highs in December 2017. However, those halcyon times proved typically fleeting, a distant conceit in the current climate.
As we embark on Q4 of 2018, it’s safe to assume that after an incredibly bearish year almost everyone awaits the arrival of 2019 with crossed fingers and bated breath. Nearly all of the agreed upon methods for making money from cryptocurrencies fell flat and unless one shorted the market or executed swing trades with impeccable timing, multiplying one’s outlay proved to be somewhat of a Sisyphean task throughout 2018.
What Happened To The Crypto-Explosion Everyone Expected In 2018?
Analysts, hedge fund managers and nearly every retail investor had forecast 2018 to be the year of unbelievable gains. ICOs, mainnet launches, airdrops, cryptocurrency futures and institutional investment were expected to push the aggregate market valuation above $1 trillion dollars.
While at the time, each of these components combined to form what appeared to be an inevitable rally to new heights, in hindsight, we can now review each of these categories to see how ostensibly assiduous projections can sometimes be grossly misleading.
ICOs Fell Flat
Initial Coin Offerings (ICO) were meant to continue exploding into a nearly trillion dollar market in 2018 and various analysts predicted Ethereum would rise from $1,400 to $3,500 – $4,000. Fast forward to the present and handfuls of ICOs have liquidated their ICO funding for fiat and the hype and constant media coverage of ICOs nearly ground to a halt.
ICOs were meant to be an easy avenue for maximizing investments, but right at the start of 2018 global regulatory pressure by an assortment of governments and the precipitous decline in ETH prices made this less of a reality.
Furthermore, a number of ICOs transitioned from being open investments to only allowing private and accredited investors which effectively cut out the little man.
Altcoin Mainnet Launches Misfired And Airdrops Fizzled Out
Once again, the general consensus dictated that altcoins would diverge from ERC-20 standard by launching their own mainnets which would lure other crypto-startups to build on their platforms. This was further underpinned by the belief that altcoin values would skyrocket as numerous partnerships with established companies looking to become a part of the blockchain revolution occurred.
Investors expected to make a hefty profit from the flood of airdrops that would ensue after various altcoins transitioned from Ethereum standard to their own mainnet and while airdrops did occur, the frequency and projected price outcome failed to meet investor expectations.
Profits Are Still Available, Even In A Bear Market
So, since conventional cryptocurrency investing theory proved to be fallible, what options are left for turning a profit in the remainder of 2018 and the start of 2019? This is likely the question on the minds of every cryptocurrency investor.
Fortunately, all is not lost and there is a guiding light at the end of the tunnel. While bullish price forecasts mostly fell short, adoption and crypto-investment platform expansion are definitely on the rise. From a technical standpoint it appears that the end of the bear market could be in sight and as Bitcoin approaches the end of the current long-term descending wedge, investors and analysts eagerly await a self-imposed deadline for either a strong upside or downside move.
The larger question should be: What if it doesn’t happen? What if BTC dips below the descending triangle and the entire cryptocurrency market capitalization plummets further?
The partnerships and blockchain adoption will continue. The exchanges will remain open for business. The world will keep on turning and blockchain technology will continue to grow its use cases, but what happens to investors? Or more importantly, how will investors make a buck in worsening market conditions?
Let’s discuss three strategies that investors could employ while waiting on a bull market reversal.
Strategy 1: Go Long On Crypto Startups With Real World Partnerships
Investors may need to re-adjust their expectations and allocate a certain percentage of their portfolio toward long picks.
Of course, the cryptocurrency market is fast paced, high risk and possibly better suited to day traders in 2018, but a small selection of coins that one is willing to wait 2 to 5 years on might not be the worst idea.
Given the inherent volatility of cryptocurrency, it’s probably best to select cryptocurrencies that have solid partnerships with established industry players that are more likely to bear fruit over the long term. The likes of IOTA, Ripple (XRP), and Stellar Lumens (XLM) are potential contenders.
Currently IOTA has partnerships with Volkswagen, Bosch, Fujitsu and DNB ASA. Ripple (XRP), while contentious among many circles, is challenging Ethereum’s status as the top altcoin with powerful partnerships and multiple use cases worldwide.
GoByte Network has partnered with iVend and is well positioned for the growing crypto-payments sector. Currently, revenues from e-commerce and mobile payment processing gravitate near $530 billion and the sector is expected to rise to $886 billion by 2021.
IOST develops blockchain infrastructure that serves as a bomb proof solution to the scalability issues commonly faced by Ethereum and Bitcoin. Their blockchain is fully capable of meeting the enterprise level needs that a company like Amazon or AliBaba might need and they have an impressive array of investors and partnerships. At the moment IOST price is possibly the most attractive it’s been since 2017.
Stellar Lumens is ostensibly similar to Ripple (XRP) except for the fact that it is less centralized with greater focus on cross-border P2P payments rather than B2B, has its own exchange and also recently launched a decentralized exchange where each token is paired with XLM. Stellar Lumens also has an array of impressive partnerships with IBM, Shift, Deloitte and Stripe to name just a few.
Strategy 2: Margin Trading
While spot trading only allows betting on an asset’s price going up, margin trading provides the option of betting on an asset losing value. Using leverage borrowed from an exchange/broker, traders can bet on the price going up(long) or down(short) with more money than is possible with spot trading. The trader’s own funds towards a margin trade order is their margin and leverage refers to funds borrowed from the exchange/broker.
While highly profitable, the risks are equally pronounced. Margin trading requires a strong understanding of TA(technical analysis) and is only recommended for sophisticated traders. It’s important to start with small amounts to cultivate familiarity.
Genning up on some basic TA, familiarizing with support/resistance levels and key indicators such as RSI(Relative Strength Index) and MACD(Moving Average Convergence Divergence), would be a good place to start for the uninitiated.
The most popular margin trading platform for cryptocurrencies are Bitmex and Deribit, both exchanges allowing leverage upto 100x on BTC futures. Bitmex also offers futures on other major cryptocurrencies with upto 20x leverage.
Strategy 3: Run A Masternode To Maximize Returns While Accumulating Extra Coins
Instead of investing one’s full attention to trading, investors could also consider operating a node as this provides the opportunity to earn passive income in the form of extra coins, while also remaining positioned to benefit from the price appreciation of staked coins.
While operating a masternode tends to require a hefty initial investment, operators are rewarded with block rewards (tokens) of whichever cryptocurrency network they are supporting. Most operators are compensated with 5 to 20 percent of a block reward and these ‘rewards’ are meant to help compensate operators for the cost of running the node.
While operating a node in 2017 required a treasure trove of capital, this year’s bear market has significantly reduced the cost and the opportunity to earn passive income on a cryptocurrency investment is worth considering.
While Dash, PIVX, ZCoin are among the most widely known currencies featuring masternodes, they all pose an expensive barrier to entry in the cost entailed to run a masternode. Currently, GoByte (GBX) is one of the most affordable cryptocurrencies to operate masternodes.
GoByte CEO, Hisyam Nasir believes that operating a masternode has multiple advantages, even when run during a bear market. Nasir points out that
“Printing coins allows operators to save on cost and this could potentially be more effective than just holding.” Nasir also explained that,“running a node is great in a bear market, because you are printing new coins to offset downturns in price. This is much more effective than holding depreciating coins that don’t offer rewards.”
While there are are list of great cryptocurrencies that one could take a stake in, GoByte already has a decent foothold in e-commerce and mobile payments. Not to mention, the sector is slated to grow to represent 46% of the global e-commerce market by 2021 and a recent report found that 40% of survey participants with some cryptocurrency awareness would be content to use it for everyday purchases.
While nothing is a given, it is relatively sensible to surmise that as more vendors accept crypto-payments, GoByte token (GBX) will appreciate in value, thus making the operation of a masternode extremely lucrative.
The cost of operating a GoByte masternode is a one time investment of 1,001 GBX. At the time of writing, the cost is roughly $370.00 and hosting is merely $1 to $4 per month. Visit https://masternodes.online/currencies/GBX/ to learn more about the process.
Smart Investors Will Be Ready For 2019 With A Multi-Level Investment Plan
On the face of it, 2018 has been a harrowing year for cryptocurrencies and unless one shorted the market it’s hard to argue against that observation. While the world’s top analysts are resolute in their belief that cryptocurrency prices will soar in 2019, nothing is a given and 2018 taught plenty investors of the dangers of making assumptions in an emerging market.
Investors and traders need to conceive a multi-pronged strategy retaining a long-term vision for this nascent sector and look further than speculative short-term gains. With cryptocurrency valuations at 2018 lows this might be the best time to take stock and deploy some well thought out investment strategies.