When it comes to crypto investments, it is crucial to understand that this market is incredibly volatile and risky compared with traditional finances. Crypto assets are not subject to governmental control or emission by central banks. The industry is still very young and unstable, so even a news background shakes the crypto market every time, as you might have noticed. Many people still make a fortune from crypto trading in this fragile environment. How do they do it? How to trade cryptocurrency and make profit? There are several instruments to earn from crypto. Some of them are more dynamic and risky, and require quick decision-making, while others are less stressful.
Let’s see how to trade digital assets:
Or more dynamic types of trading:
Most beginner crypto users pick swing and long-term investment methods, for they are less stressful and give enough time to reflect and analyze the market. That’s the right position, and over time, a person learns how the market works and dares to try some more dynamic strategies.
There is an alternative to simply holding crypto coins – you may increase their number by doing nothing, in fact. The process is called “staking crypto”, let’s discuss it.
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If you are engaged in trading, you might notice that different digital assets are developed using different mechanisms. For example, the world’s first crypto, Bitcoin, is developed on the Proof-of-Work consensus protocol, which means, every new block in the Bitcoin blockchain is received through machine calculations of math problems, which is also called mining. People who mine crypto buy expensive equipment for that purpose, for ASICs do not work anymore – the mining difficulty is increasing, requiring more and more advanced and expensive equipment and consuming more energy. In addition, mining harms the environment.
Other types of digital coins (for example, Solana, Polkadot, Cardano, and Ethereum from recently) are those developed on the Proof-of-Stake consensus protocol:
One of the most popular PoS products is Solana. This network has become the leading platform for developers looking for the most convenient, technological, and cheap solution for building and deploying decentralized applications. Solana became the foundation for hundreds of DeFi, NFT, games, metaverses, and other products built on it. It could even overperform the Ethereum network, but it also switched to the Proof-of-Stake consensus; thus, since recently, the Ethereum network also has high speed, low fees, and high throughput.
Let’s talk about how to stake crypto. Staking is the passive income option on the crypto market. It works similarly to a bank deposit when you leave your funds in a bank and receive interest in return. In crypto, staking works the following way. Suppose you have some SOL coins and would like to get more. So you lock your SOL crypto on the Solana network for some period, and when it expires, take more SOL coins than you put (initial number plus staking rewards).
Not only PoS coins can be staked, but other cryptos are also available for staking through crypto platforms. For example, use the WhiteBIT exchange:
Many other crypto platforms like Bytbit has staking option. It is crucial to keep in mind that taking assets back is impossible without losing rewards. That is, if you withdraw funds before the staking duration expires, you will not receive bonuses. Some exchanges impose penalties for withdrawing coins beforehand. So be attentive and read the rules before locking coins.
Another thing to know is picking an asset. It is advisable to choose crypto coins with high liquidity and low volatility. Tokens with a large market capitalization resistant to market trends. Keep in mind that if the price chart drops while your coins are locked, your rewards will reduce, for it depends on the current assets rate.
Crypto staking brings the following benefits for crypto holders:
The most significant disadvantages of staked crypto are:
As we said before, crypto staking is supported by many crypto platforms. To pick the best suitable, look at the conditions they propose for staked crypto. Are there penalties for withdrawing coins beforehand? It is important to check the reputation of the platform and reward the reviews on it. Some scam services attract inexperienced traders offering high staking interest and unknown crypto. Be cautious and entrust your funds only to reliable and credible services. An example is WhiteBIT.
WhiteBIT is the largest crypto platform in Europe, focused on a high level of safety for clients. 96% of users’ funds are kept offline – on cold wallets. Every client sets a two-factor authentication and randomly receives codes to one’s phone to enter the account.
WhiteBIT offers a passive income option to earn up to 30% from holding your coins on the platform. That may be:
Smart staking involves around 40 programs for you to pick from. They differentiate by the underlying asset and the period of locking. You may pick the amount of assets and locking period and see how many bonuses you receive. Use the staking calculator to see the correlation between the length of the staking period and the bonuses. The longer you keep your tokens locked, the more bonuses you get.
To learn more about crypto lending and staking on WhiteBIT, welcome to its official blog. This educational resource will guide you and help you handle all trading and staking tools to succeed in working with WhiteBIT. There are many interesting quizzes to participate in. The WhiteBIT community is engaged and active, so you will find like-minded people and share experiences and recommendations. WhiteBIT is a big family welcoming new people to expand the crypto industry worldwide.