Have you been wondering whether or not you should take the income you made from investing in crypto forward and do something else with it? Or have you been thinking about investing, and are searching for further options on what to do with the income you earn from these assets? Well, there are a couple of ways you can do that, and this article is going to give you five options to consider.
For those who are just thinking about jumping on the crypto train, let us first hand out a couple of basic pieces of information everyone should know.
What are these digital assets?
Cryptocurrencies or digital assets are a virtual means of payment and an investment resource whose operation is based on a distributed accounting system. According to the interpretation of many ruling bodies, they are a full-fledged means of payment and are therefore exempt from VAT related to goods and services. This is exactly what makes them a perfect asset to use in further investment.
At this moment the market has around 10,000 operational coins and projects. Each of these projects represents a certain vision and different mechanisms of action, but what are cryptocurrencies? Virtual money or digital currencies is obviously an appropriate name, but we cannot stop at this simplification.
All because of the sophisticated specificity they have. As we mentioned before, they are based on a distributed, in other words, decentralized accounting system. What is the unique nature of this solution?
The philosophy behind it – you are your own bank
In this digital universe, there is no parent authority – for example, a central bank that could stop or reverse transactions. Everyone is their own bank, which, in addition to the independent and completely free transfer of funds, means that each user’s funds are as safe as the user himself will largely influence that security.
These currencies generally use advanced encryption algorithms that prevent unauthorized access to funds. The only circumstances that can contribute to the loss of virtual money are a security gap in a particular coin, which allows you to steal funds (which happens very rarely, but still is a possibility), and the second possibility – which accounts for 99% of cases of loss of funds, i.e. loss of access to the wallet along with publishing the data supporting the wallet, i.e. the private key.
Open and decentralized accounting system
This is what Blockchain is. Transactions stored on the chain are irreversible and anonymous – the block containing the transaction information contains encrypted data, such as wallet addresses or keys needed to carry out the transaction.
Each cryptocurrency blockchain has a unique specification. Bitcoin’s blockchain, despite many similarities, is different from the blockchain technology used in other currency coins.
There have been a number of different ways to earn money with these currencies, however, the most useful one lately has been by trading. You have probably met someone who keeps tracking the market on their smartphone, all the time, looking for the right moment to sell and buy. Although trading is a complex activity, there are ways to make the best of it, by learning how to properly do it, for example via https://tradingguide.co.uk.
Once you get a hold of trading knowledge and skills, it’s time to decide what to do with the money. As promised, below, we are suggesting some of the smart ways to spend your crypto earnings and even grow the amount.
1. Divide the amount earned between spending and reinvesting
The best is to keep the money circulating, but what you also want to do, is make sure at least part of the profit is safe in cash. So, before you opt for reinvesting, cash out a certain percentage. This way you get to safeguard your seed money.
How? The smartest investors wait patiently until the profit and the initial amount they have invested equalize. Then they take out some winnings and wait for the next good chance to reinvest.
2. Mining is still a good idea
Although many have seized this activity, it is still considered an effective option. Of course, for it to be fruitful you have to learn the basic mining and develop some strategy.
If you opt for mining and trading, your revenue can be greatly diversified. The income made from mining can be further used for trading, and so on. With careful money management, it can really pay off, even though there are several expenses related to mining.
Although the process is a bit slower, for those looking or earning some side money in the long run, it still is a good idea. Again, only when you have collected enough knowledge on both mining and trading.
3. Buy new coins
Substantial gains can be achieved if you follow how certain coins develop. For example, there are some with a high degree of risk, but they also come with a higher reward. First, they make a profit, then wait for the discount to buy an investment. High-risk ICOs can be bought by using only a portion of the profit, not all of it.
4. Investing in properties
Not all the money you earn this way can and should be used for investing in the same market. Rental properties are one of the ways you can diversify your investment portfolio. That is if you know how to choose a suitable property, renting will generate income. Once this income is ensured it can again be used for investing in digital assets.
So, it’s one of the smartest ways to ensure you have enough money to invest because real estate has been assessed as the safest investment you can use this money for.
5. Dividend stocks
Here’s another excellent idea, buying stocks that pay dividends. Especially if you’re aiming to diversify your holdings. You can even count on some decent monthly income this way.
As time passes, options for investing keep growing. This is because the crypto market is a fast-developing market and a hard-to-predict one. Therefore, think about your re-investments, and whichever you choose from the list will surely be successful, if done smartly.