Why Long-Term Investment in Crypto Is Useless
Credit to Author: The Manila Times| Date: Wed, 23 Jan 2019 00:00:33 +0000
Throughout 2018, the price of Bitcoin fell by more than 400%. Which means that investing in cryptocurrency is a horrible decision. However, there is another way to make money on crypto.
Why Investing Isn’t Working Anymore
Investing is purchasing some product with an intent to sell it later at a higher price. Which is pretty tricky when that price is falling.
The BTC/USD price chart for 2018.
Most people that bought crypto in 2018 are now at around 40% loss. Those that bought in late December are the exception, because of an ongoing price correction, but only for now. The forecasts place the price of BTC at the end of 2019 at 2000 USD. And with day trading, you can actually profit from that.
What Is Day Trading
The idea behind cryptocurrency trading is to utilize price changes for profit. On the growing markets, you can buy low, wait until the price grows, then sell high. And on the falling markets, you can short.
Shorting means borrowing the crypto, selling it, then repurchasing and returning it to the loan provider. If the price falls between the selling and the repurchase, you get to keep the profits. And on the cryptocurrency market, the price is always falling.
How Profitable Is Cryptocurrency Trading
A USD/BTC chart for January 15, 2019.
The starting point for the January 15 was 3750 USD/BTC. The closing point was 3659 USD/BTC. Which means, that had you bought your Bitcoin on that day, you’d be 3.5% in the red. Even if we disregard the downfall at 20:30, the closing position of 3710 USD/BTC at 20:00 is still a 1% loss.
Yet, if you were to short the Bitcoin on that day, you’d end up with a ~3% profit. Not all days are so good, but you can safely expect at least 1% daily profit — or 20-30% of profit each month. Which is much better than being in the red for the same amount.
Conclusion
Cryptocurrency trading at this point is pretty much passive income. The occasional bullrushes are weak, frail, and give the traders plenty of chances to short crypto. It’s not entirely safe but this is the best trading opportunity of 2019.
That said, before you can short crypto, you need someone to borrow it from. The majority of traders use JustForex or any other cryptocurrency broker. Aside from providing shorting opportunities, they offer delayed orders, convenient indicators and trading robots. You can even open a demo account to test your strategies and theories before going live with them.
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