In 2024, the cryptocurrency market is hype, with many newcomers rushing to make a quick buck. Let’s break down what you can really make money with. The guide will be in several parts, so be patient.
NFT – now for professional players only
The sphere is going through hard times, there is no longer any of the hype that there was in the last few years. Projects are using NFT for utilitarian purposes. But if you want to speculate or invest in this market, most will fail.
It’s a very difficult market right now, there’s nothing for beginners to do in it, while the experienced can find much more interesting areas. Sure, you can find something unique to buy and it will probably grow, but why play such a difficult game now.
Better to stay away from the current market. Maybe pay attention to NFTs if you have enough money to buy blue chip (expensive top NFTs), there hasn’t been that much decay in them.
ETH staking
I specifically separate ETH steaking from DeFi and other assets, it’s an artificial separation. The options for ETH steaking are many. Liquidity steaking, steaking pools, re-staking. Even CEX offers decent conditions for ETH steaking.
Yields range from 5 to 35% (in the case of re-staking). There are even more aggressive options, but these are already highly leveraged and the additional risks are usually not worth it.
Pros:
– The yield of steaking is high
– the asset is second only to BTC in terms of capitalisation
– ETH holds a good half of the entire cryptocurrency market, so the token has great prospects, plus sooner or later ETH ETFs will be allowed.
– Reliable, stable network
– There are many projects that give you tokens via airdrop to buy ETH through them, and the yield can be well over 35%.
Downside:
– Sometimes the commissions on the network bite, but after the last update the commissions have dropped significantly.
– ETH, although it is the backbone of the industry, but the price of the asset is quite volatile, you can steak for a year and still be in the negative
– You won’t get a lot of X’s or any super profits, this is exactly the analogue of buying blue chips in the stock market.
This investment option is suitable for both beginners and experienced investors. It really works and you can make money from it. And it is these investors who earn well in the market without taking unnecessary risks. No fuss, no nerves, no need to dive into the intricacies of DeFi. But you need to be aware that if the market crashes, you will be stuck with your investment for years, so be prepared for a long investment horizon.
Scalping Trading
I have already discussed scalping in detail and in different ways (e.g. here). For 99% of traders, scalping will result in a loss.
It is stable and many people make a lot of money from it:
– Proprietary firms (giving you capital to trade, earning on leverage fees and higher commissions)
– Scalping course creators
– Unique heroes who, after 1-2 years, move into intraday or even medium-term trading (here about the transition to the senior timeframe). No one has undone the survivor’s mistake in any area.
Prop companies and course creators exploit the survivor’s error in marketing. If you can see the honest statistics of a prop company, you will be horrified. It’s a conveyor belt of people leaving the trade for good, with all the marketing built around a single hero.
The Survivor’s Fallacy is a common cognitive distortion that causes people to focus only on successful experiences and ignore failures.
It is a paradox that scalping is usually done by traders with small capital, whereas in CEX you can only get a good commission if you have a large capital. And the commission in scalping is one of the deciding factors.
Psychologically – this activity is suitable for few people. Twenty-first century – there is algo trading, can’t you describe your strategy to a bot? After all, many robots will trade against you. This way is very tempting and sweet at first glance because of the possibility of fast and big profits, but it has the lowest probability of staying in profit of all trading strategies. Potentially, it is the scalper who can lose money as quickly as possible.
BTC holdingand DCA Strategy
Together with ETH staking (described in the first part), BTC accumulation is the best strategy for beginners. In general, it is an excellent conservative strategy for experienced and long-term investors.
It is desirable to use DCA (Dollar Cost Averaging): buy in instalments and sell in instalments, equal amounts at equal intervals, and it will be almost impossible to outplay you.
It is a comfortable, stable and psychologically safe strategy, as there is little chance of getting caught out.
The only risk is that BTC suddenly loses its role as the leading long-term crypto asset.
And a long, dismal slide will begin, as we saw in 2022-2023.
Downside:
– Long-term strategy, X’s are questionable and there may be long periods where you are in the negative.
– There are not so many ways to somehow passively earn on BTC: conservative ones give 1-4% – it is lending (i.e. providing your BTC for loans), other options already involve some risk and nerves – it is investing BTC in liquidity pools, or for example in layer-2 solutions in the bitcoin network (here was a guide to airdrop in MEZO one of such projects).
– High network fees when stored on a cold wallet.
This strategy works so well that it is probably the most popular among all cryptocurrency owners. Suitable for everyone. Even for active traders, it’s a great option for diversification. No pitfalls, no need to waste time.
Essentially similar to investing in the S&P or gold, but still riskier, let’s face it. Compare BTC to instruments with such a long history.
When everything collapses and the market goes to hell, many people run to BTC instead of stablecoins. Compared to stablecoins, BTC is a very transparent asset that is accepted by TradFi via a spot ETF. So in terms of reliability, the strategy rivals stablecoin investments.
Stablecoins
Stablecoins are the top instrument in the cryptocurrency world in terms of risk and return.
You won’t find deposits at 10-30% per annum in US dollars in the traditional economy. Even in rubles, banks are now offering 12% to 16% per annum.
✔️At the time of writing, Binance is offering 6.6% on USDT, HTX – 10%, Bybit – 10.3%. These are flexible deposits, meaning you can withdraw funds at any time and only lose interest for the current day. This is a tool available to any beginner = Demand account offers 10% APR in $.
✔️If you turn to DEX you will find there already options to invest in liquidity pools at 15-20% where there will be two assets and both are stablecoins.
You can take more risk and invest in pools with a certain range or in liquidity pools that offer some operations on smaller DEX and reach 30%.
You will say “there are more returns”, I gave exactly the averages.
Now many networks have their own Steiblcoins and in them the yield can be very high.
Advantages:
– You own an asset pegged to the dollar and get income that is not available in TradFi.
– You don’t care about bull or bear markets, your asset doesn’t change in price.
Disadvantages:
– There are no X’s in this strategy, it is a conservative strategy.
– Many people underestimate the risks of forex. This is not the US dollar, the risks are higher. Anyone who saw the collapse of the UST will understand this. Remember the US regional bank crisis last year and what happened to USDC.
– There is also no deposit insurance system, there is the risk of the DeFi project being hacked, there is the risk of a centralised exchange going bankrupt.
Stablecoins are a great investment tool. Diversify your investments, don’t invest everything in USDT. 20% per year is a great result even for the stock market, not for an asset tied to the dollar. Get X’s on risky investments and save in solid assets. It is possible and necessary to make money on forex, it is an absolutely working tool.