Crypto is a chance for everyone
Crypto is a chance for everyone
Disclaimer: The value of your investments can go down as well as up, and you can suffer big losses on your investments. Therefore, never invest more than you can afford to lose. Always do your own research before investing in any cryptocurrency. Coinformation is an information platform and the service does not constitute financial advice.
1. Invest for the long term and profit from price gains
Risk level: 2/3
Blockchain technology has enabled new business models and thus the birth of a new asset class alongside real estate, commodities and stocks: cryptocurrencies. You can invest in this asset class. On our platform you can find everything you need to know about.
Just follow a few simple steps:
- Start with a plan. You can find important tips here
- Filter by use cases you are familiar with
- Filter for cryptocurrencies that have a high long term value
- Look at your search results. You can find all the key metrics on our dashboards. If you have any questions, feel free to contact us.
- If you are convinced by a cryptocurrency, follow it. Thanks to our signals (possibly only in the Premium plan), you will be informed directly by email when something happens there.
- Fully convinced? Then invest. Start with a smaller amount. Do not try to catch the right moment. Also, keep your cash reserves at 10-15% of your portfolio. This way you can react to opportunities that the market offers to the patient investor.
- Stick to your plan or strategy as much as possible.
Investing your money in cryptocurrencies is too risky for you? There are safer ways to profit from cryptocurrencies.
2. Lend your cryptocurrencies and earn interest
Risk level 1/3
Many cryptocurrencies offer you high interest rates. There can be different reasons for this.
Staking on a blockchain - One reason could be to secure transactions on a blockchain. Most of the time, all you have to do is hold the cryptocurrency on the blockchain. The number of tokens or coins you hold is your “stake.” Comparable to an interest-bearing savings account, you can put your Stake into a “staking pool”. The staking pool is used as part of the consensus process called “proof-of-stake” to verify and secure transactions.
Note that there is often a lock or hold period associated with participation in the staking process. That is, it can take days to weeks before you get your stake paid out again.
Providing liquidity for a stablecoin - In order to exchange one cryptocurrency for another, an “intermediate currency” is often needed. This need has given rise to numerous so-called stablecoins, cryptocurrencies that have a fixed price. Stablecoins facilitate trading on crypto exchanges and are closely linked to them. Instead of buying Bitcoin directly with Euro or U.S. Dollar, a stablecoin is first purchased and then exchanged for Bitcoin. Besides the higher availability, significantly lower trading fees are usually the main reason. In order to always have enough liquidity available in the market or on the crypto exchange, most stablecoins offer attractive interest rates for making your stablecoins available. In the crypto context, this process is referred to as “liquidity provisioning.”
The Terra crash demonstrated the importance of stablecoins being backed by an equivalent value. For example, USDC should own one U.S. dollar for each stablecoin. Due to this fact, Stablecoin cryptocurrencies are also more comparable to centralized organizations, such as banks.
3. Use DeFi products for yield farming
Risk level 3/3
Many blockchain-based decentralized applications (dApps) offer financial products related to buying and holding cryptocurrencies. Depending on the dApp, these financial products are structured differently.
Yield farming by providing liquidity - The goal can be to provide liquidity for decentralized crypto exchanges (DEX). For example, you can provide two cryptocurrencies to a DEX and earn money on the transaction costs.
Yield farming by staking - In addition to the previously described staking on a blockchain, there is also the staking of transaction fees previously earned on the DEX. Those who provide liquidity can thus profit twice through this type of compounding interest.
Yield farming by lending - There is also the possibility to lend a cryptocurrency to another person within the framework of a smart contract. Analogous to a loan transaction, you receive interest for the period of the loan.
Yield farming by borrowing - Likewise, a cryptocurrency can be deposited as a security deposit in order to receive the equivalent value in another cryptocurrency. For example, the borrowed cryptocurrency can be used for yield farming purposes as long as it is profitable and ultimately redeem the deposited deposit when it is no longer the case.
Yield farming can be very risky, for example, due to the price volatility of cryptocurrencies, rug pulls, as well as smart contracts hacks.
4. Create and trade NFTs
Risk level 3/3
NFTs (non-fungible tokens) have gained incredible popularity since 2021 and have become an important part of the crypto market. NFTs can be used to store digital and non-digital assets and art on the blockchain. For example, a piece of digital art can be minted as an unique token that is easy and secure to trade.
Buying and selling NFTs - Profits can be made by so-called “NFT flipping” i.e. trading NFTs. Usually, NFTs are bought cheaply when they are new on the market and later sold at a higher price. Depending on the right timing, type of NFT and buying interest, NFTs can be highly profitable.
Creating NFTs and making profits with smart contracts - The creator of an NFT can sell it and keep the proceeds, minus a fee if applicable. In addition, when the NFT is minted (first created), corresponding smart contracts can be stored in the code. These “transfer rights” can ensure that the creator receives a certain percentage of each resale of the NFT.
Lending NFTs - NTFs can be safely and easily lent out via smart contracts and offer an excellent opportunity to generate passive income from one's own NFTs. In NFT card games, such as Spellfire, players can borrow cards to increase their own chances of winning.
NFT Games - although the majority of currently traded NFTs are works of art, play-to-earn games with their in-game NFTs are going strong. This allows cosmetic modifications (e.g., a jacket for your character) or other new items to be earned and traded in a special marketplace.
NFTs offer a variety of uses, but in many cases the value is just as intangible as the NFTs themselves. Trading NFTs in its current incarnation is therefore more for professionals.
Among the largest NFT marketplaces is OpenSea.
5. Crypto games
Risk level 3/3
Gaming - Cryptocurrencies that focus on use cases such as “gaming” or even the “metaverse” use so-called play-to-earn business models to incentivize players. Depending on the cryptocurrency, players can either earn based on their activity or usage time, or play against each other in competitive mode for the cryptocurrency or NFTs.
Gambling - The lack of regulation in the crypto market has also created a real boom in the casino industry. In crypto casinos, instead of gambling for FIAT money, people gamble for cryptocurrencies. In many countries, gambling is completely or partially prohibited and can therefore be illegal.
You have questions? Write an email to firstname.lastname@example.org. Coinformation will gladly support you with further information. However, the decision whether and how to invest in cryptocurrencies is entirely up to you.