Before starting a new business, a smart person asks himself or herself the question - what will I get in the end, is there any benefit from my actions, what will I spend my money and effort on?
Before investing their own money into the cryptocurrency industry, a smart investor will find out how much the active market players earn on cryptocurrency to compare the costs with the possible outcome.
The amount of earnings in the cryptocurrency market depends on the investor's strategy and direction of investment.
Trading and mining are considered the most profitable ways to make money from digital currencies. Trading on the exchange and mining of digital coins require different amounts of investment at the start.
Mining starts with setting up a cryptocurrency farm, the days of farms for mining on ordinary computers with a few video cards are over. The number of miners is growing, and as the number of mining farms grows, so does the complexity of mining, and more total power - the hash rate - is required to be successful. In contrast, the reward for mining decreases as the complexity increases.
HOW MUCH INCOME A MINING FARM GENERATES
In 2021, setting up a mining farm with 6 GTX1060 or RX570 level video cards will cost about $2350. A day of such a farm including power costs will bring $2.5. The investment in the farm will not be repaid in 950 days at the earliest.
A novice miner must have basic technical knowledge. Professionals will help to assemble and configure the farm, maintenance, troubleshooting and technical problems will be provided by miners themselves at the initial stage.
Mining is not the best way to invest for a novice crypto investor.
THE BENEFITS OF TRADING DIGITAL CURRENCIES
Trading digital currencies on a cryptocurrency exchange can be started with a small amount. Experienced investors advise investing no more than 10% of your monthly income in cryptocurrency trading. The average salary in North America is around 1000 USD/week. Unlike other financial markets, in the cryptocurrency market, you can start trading with 100 USD. You can read about bitcoin trading options here.
Experienced traders can increase the amount of investment by 100-150% within a month. A novice investor in the digital currency market should not count on easy enrichment. Exchange rates of digital currencies are highly volatile, fluctuations of 15 - 20% up and down during the day are common. A beginner, if he sets himself realistic goals, can increase his initial investment by 10-12% in 12 hours of trading. In a month, you can count on a profit of up to 50%.
The cryptocurrency market is unpredictable. In August 2020, the DeFi token YFI became a sensation, with the value of the coin increasing by more than 400%. The newcomer YFI overtook bitcoin BTC in value. In July 2020, a single YFI coin was worth $35; by the end of August, YFI had crossed the $30,000 mark. By mid-September, the YFI went down, reaching $23,597 by the 20s. As of May 2021, 1 YFI is valued at $48,000.
The example of YFI, a token created to manage the yEarn Finance platform, shows what kind of rate hikes the cryptocurrency can make.
When choosing to invest in cryptocurrency as a way to make money, a beginner should remember that adhering to the principle of reasonable sufficiency will give the necessary trading experience and allow, over time, to multiply funds by 100% or more.