If you are like many smart investors in the past year-plus, you may have dabbled in the exciting world of cryptocurrency. This revolutionary digital currency exists in a volatile market, but one where you can also make serious profits.
Buying and trading crypto is one thing, but to become a successful trader, you also need to know how to take profits from crypto. To help you do this, we will examine what to do after you’ve bought cryptocurrency, the growth of this new digital form of money, how to take profits from crypto, what crypto traders can make, and the future of crypto.
So You’ve Bought into Cryptocurrency. What Now?
If you are an investor who has bought into the crypto market for its long-term potential, an aspiring high-volume trader, or somewhere in between, here are a few things to think about as you take the next step on your crypto journey.
A brief overview of cryptocurrency
If you’ve bought crypto, you have a general idea of what it is, but you should know the details of crypto. Understanding the virtual asset you are investing in is an important part of any investment, especially one as new as crypto.
Cryptocurrency is a decentralized digital currency based on blockchain technology. This technology creates a digital “block” each time there is a transaction involving a coin and records the history of these transactions in a “chain.”
Being decentralized means that a central bank or government does not issue the currency. The decentralized nature of crypto also makes it anonymous and secure. It is also faster and cheaper to use because you don’t need the “middlemen” in the banking industry to facilitate payments like with traditional fiat currency.
The first and most well-known form of crypto is Bitcoin, but it isn’t the only cryptocurrency out there by any means. In 2021, there are well over 10,000 different cryptocurrencies that are traded on open markets.
This can make diving into crypto trading daunting, but huge opportunities exist for even the most novice crypto trader or investor.
Tips for saving and investing in cryptocurrency
While the crypto market is unique, investing in digital currency shares many of the same principles as investing in any type of market from stocks to bonds to real estate.
The first thing you want to do is perform your due diligence. Get to know as much as you can about the crypto you’re interested in so you can make smart, informed decisions and can identify opportunities when they arise.
In this market--more than in most--you also want to evaluate your risk tolerance. Crypto markets are incredibly volatile and, if you’re not careful, you can lose your investment just as easily as you can turn a major profit.
After you know about the market and understand your risk tolerance, it is time to invest. You’ll need some crypto-specific tools like a crypto wallet to store your crypto, and you’ll need to find the best cryptocurrency exchange to buy, sell, and trade coins. For more tips on investing, check out our guide here.
Ways to access your cryptocurrency
The best and most secure way to store and access your crypto is with a crypto wallet. These wallets come in different forms. You can get hardware or software wallets and, if you opt for software, you can choose a desktop, mobile, or web wallet. There are pros and cons to each of these, depending on your needs.
As the crypto industry develops, you will find more places where you’ll be able to access your crypto in the same ways you access your cash now. More and more banks are getting into the crypto space, and crypto ATMs are becoming increasingly common.
Cryptocurrency Adoption Sweeps the Globe
If you are deciding to invest getting into crypto, you probably already know that it is the next big thing in the financial world. Many worldwide crypto-related developments support its growing influence and prevalence.
Europe is adopting cryptocurrency at record rates
All across Europe, people are buying and using crypto at record rates. Countries like Switzerland, Germany, Ukraine, Spain, Czech Republic, and the UK are all among the top crypto hotspots in the world. The European Union (EU) is also one of the leading governmental entities that is exploring using cryptocurrency as official currency.
Countries are working toward adopting cryptocurrency as official currency
In addition to the EU, many other countries — including the U.S. — are discussing the use of crypto as a national currency. In fact, El Salvador recently became the first country on record to adopt Bitcoin as a national currency.
The next big shoe to drop in this area is when China rolls out its digital yuan. The superpower plans to officially unveil this government-backed form of crypto for foreign visitors in conjunction with the 2022 Winter Olympics in Beijing.
Cryptocurrencies will be traded on Wall Street
Right now, crypto is traded on crypto-specific exchanges, but that will likely change in the future. More Wall Street firms are investing in crypto and advising their investors to do the same. As digital currency becomes more mainstream, it is only a matter of time before Wall Street has its own crypto exchanges that function just like the stock market.
For now, if you want to go the traditional Wall Street route to invest in crypto, there are plenty of crypto-related companies you can buy stock in. For example, in April 2021, Coinbase became the first crypto exchange to become a publicly-traded company.
How Do I Get the Most Money from Crypto?
Knowing the who, what, and where of crypto is important, but the most important thing to know is how to take profits out of crypto. Here are a few FAQs about getting money out of crypto after you’ve invested in the crypto markets.
Can I cash out my crypto?
The short answer is yes. Just like buying a stock, you can sell your crypto at any time and get cash. The exact mechanics of how to do this depend on how and where you trade. Most major exchanges have clear rules about how to convert your crypto into cash and how to withdraw it when you’re ready. Make sure you understand the process and any limitations before you start trading on any exchange.
What are the withdrawal limits?
This depends, again, on how and where you trade. Some exchanges do have withdrawal limits, while others don’t. You will also find exchanges that charge a fee to convert your crypto into fiat/cash. make cash withdrawals. If you trade on a reputable exchange, none of this should be a major issue but you should know and understand the associated fees and limits before you start trading.
Can crypto make me rich?
Absolutely. The crypto markets are incredibly volatile, with wild swings and huge runs that can (and have) made plenty of people rich. A quick Google search will produce plenty of stories of crypto investors starting with a small investment and becoming millionaires seemingly overnight.
That said, there are also plenty of stories about people who have bet big on crypto and lost it all. That is why doing your research and understanding your risk tolerance is such an important part of crypto investing if you hope to take profits out of crypto.
How Much Does the Average Crypto Trader Make?
If you are interested in making crypto trading more than just a hobby or a casual investment, becoming a crypto trader may be something to look into. Here are a few things to know about this possibly lucrative profession.
What is a crypto trader?
A crypto trader is broadly defined as anyone who makes short-term trades on a crypto exchange to try and generate a profit. The idea is to buy a crypto asset at a relatively low price and sell it — usually within the same day or week — at a higher price for a profit.
Can you buy and sell crypto for a living?
There are plenty of crypto traders these days making a full-time living from buying, selling, and trading Bitcoin and other cryptocurrencies. For the most part, these people are self-employed and are doing it on their own. However, as the crypto world expands, more companies will be looking to hire professional crypto traders just like so many financial companies employ professional and licensed stock traders today.
How much do crypto traders make?
Like self-employed professionals everywhere, some do and some don’t. Some crypto traders make millions, others make a very healthy living, some just get by, and others don’t do all that well.
To put some general numbers on what an average to above-average crypto trader can make, ZipRecruiter reports that the national average for a crypto trader is $7,868 a month or $94,427 per year. The top 25% of traders make $131,000 a year or more and the best of the best make somewhere in the neighborhood of $173,000 to $188,500 annually.
How Will People Make Profits Off Cryptocurrency in 2022?
The thing about crypto is that, because it is the wave of the future, it isn’t just about how to take profits from crypto now, it is about how to take profits from crypto in 2022 and beyond.
The crypto forecast
The forecast for crypto in 2022 and beyond is bright and sunny. Digital currency is and will continue to be adopted all around the world in the coming decade. As mentioned above, countries and major corporations are already preparing for a time when cryptocurrency will be the norm.
This means that 2021 into 2022 should be an amazing time to get into the crypto space. Some cryptocurrencies may explode in value in the coming years and, if you get in early like the first investors in Bitcoin did, the potential profits can be extraordinary.
The proliferation of Bitcoin ATMs
One way to know that crypto is here to stay and is only growing is by watching the proliferation of Bitcoin ATMs. Right now, most of the value in Bitcoin is speculative and based on the markets. As it becomes more popular, easier to use, and more widely accepted, its value should only grow.
Bitcoin ATMs increased by 120% worldwide in 2020 and, through the first three quarters of 2021 are up another 70%. These ATMs are found in 75 different countries around the world and the U.S. is home to around 21,000 of them.
This is a great sign for the future of crypto and a good indicator to watch in 2022 as the digital currency space continues to grow at a rapid pace.
What will some of the most popular cryptocurrencies be in 2022?
The easy answer is Bitcoin. It is the first and still the most popular (and most highly-valued) crypto in the world and is likely to remain so for the foreseeable future. The problem with Bitcoin is that it is expensive. In October 2021, a single coin is priced at over $50,000.
As a result, it may make more sense to look at other, more affordable trading and investing options. Cryptocurrencies like Ethereum, Tether, Cardano, Ripple, and Dogecoin are all worth looking into in 2022.
Dogecoin is interesting because it started as a joke or meme crypto and exploded in value, making many investors rich. The truth is, you’ve missed the Dogecoin train that will make you a boatload in a short time, but the next Dogecoin is out there now, and that is what many traders and investors are looking for.
Investing in cryptocurrency is a good first step to grow your personal wealth, but having an exit strategy is an equally important next step. When considering how to take profits from crypto, there are a few important things to know.
You need to know as much as you can about crypto in general and have a sound strategy for investing. Knowing what cryptocurrencies to invest in and the tools and exchanges you must use to do so is also critical in turning a profit. Also remember that you can make a lot of money in crypto if you invest the right way and in cryptocurrencies that have the potential to explode in value in the future. Keeping all this in mind can help you make the most of your crypto profits.