Crypto Exit Strategy: How to Make the Most Out of Your Crypto Profits
Many intelligent investors have dabbled in the emerging world of cryptocurrency, perhaps you have as well. This revolutionary digital currency currently exists in a volatile market, but with volatility comes the potential to generate serious profits.
While buying or trading crypto is one thing, trading crypto successfully means you also need to know how to take profits from crypto. In order to help you with this, we will examine what to do after you’ve made a crypto investment. Discussing the growth of crypto, generating profits, how much money crypto traders make, and the future of crypto.
You’ve Invested in Cryptocurrency… Now What?
No matter your reason for investing in crypto, there are a few things to keep in mind in order to increase your odds of success. These key principles apply to all types of crypto investors, regardless of your specific strategy.
An Overview of Cryptocurrency
If you have experience investing in crypto, the odds are you have a general idea of what it is. However you should become aware of the lesser known details of the crypto market. Understanding the virtual asset you are investing in is an important aspect of any investment, especially with volatile crypto investments.
Cryptocurrency is a decentralized, digital form of currency based on blockchain technology. Blockchain technology validates transactions using a distributed ledger, which must be validated by all systems on a decentralized network.
Being decentralized means that there is no central location in which a database can be accessed. Rather, the entire network is distributed across the world, creating a decentralized network of systems. The decentralized nature of crypto also makes it much more anonymous and secure. Crypto transactions are oftentimes faster and cheaper to use, since there are no intermediaries (middlemen) involved in the transaction process. This approach is the complete opposite of the banking industry, which relies on intermediaries to facilitate financial transactions.
The first and most well-known cryptocurrency is Bitcoin, however it’s not the only cryptocurrency out there. In 2021, there were well over 10,000 different cryptocurrencies that were traded in various 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 inherently unique, investing in digital currency carries many of the same characteristics as alternative investments. 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. This allows you to make smart, informed decisions, and identify opportunities when they arise.
In the crypto market, which is highly volatile, investors should evaluate their 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’ve learned about the market and assess 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 with. For more tips on investing, check out our guide here.
Ways to Access Your Cryptocurrency
The most reliable way to store and access your crypto is within a crypto wallet. These wallets come in different forms, such as hardware or software wallets, which operate on the same principles. 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, more places will allow users to access crypto the same way you access traditional fiat currency. Especially as more banks are dabbling in the crypto space. At the same time, crypto ATMs are becoming increasingly common.
Cryptocurrency Adoption Sweeps the Globe
If you’re deciding to invest in crypto, you’ve probably already heard that it’s 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 utilizing crypto at record rates. Countries such as Germany, and the UK are 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 its official currency.
Countries Are Replacing Fiat With Crypto
In addition to the EU, many other countries — including the U.S. — are discussing possible use cases for 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. China plans to officially unveil this government-backed crypto for foreign visitors in conjunction with the 2022 Winter Olympics in Beijing.
Cryptocurrency Will Be Traded on Wall Street
Right now, crypto is traded on crypto-specific exchanges, this will likely change in the future. Many Wall Street firms are beginning to invest in crypto, advising their investors to do the same. As digital currency continues to become mainstream, Wall Street will likely harness its growing popularity. It’s only a matter of time before Wall Street has its own crypto exchanges that function just like the stock market.
As of now, there are plenty of crypto related companies to invest in, especially within Wall Street. For example, in April 2021, Coinbase became the first crypto exchange to become a publicly-traded company. In the future, more crypto companies will likely go public, providing additional investment opportunities.
How Do I Earn Money With Crypto?
Knowing the who, what, and where of crypto is important, but the most important thing to know is how to generate profits. There 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, much like buying a stock, you can sell your crypto at any time and receive cash. The exact mechanics of how to do this depend on how and where you trade. 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 an exchange.
What are The Withdrawal Limits?
Withdrawal limits will vary depending 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 currency. If you trade on a reputable exchange, none of this should be a major issue but you should still 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.
How Much Do Crypto Traders Make?
If you are interested in making crypto trading for more than just a hobby or a casual investment. Becoming a crypto trader is certainly something worth looking into. Here are a few things to remember about this possibly lucrative profession.
What Is a Crypto Trader?
A crypto trader is anyone who makes short-term trades on a crypto exchange, in an attempt to 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 income 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. Similar to financial companies employing professional and licensed stock traders.
How Much Do Crypto Traders Make?
Like self-employed professionals everywhere, income varies greatly. 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’s 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 still very much 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 is the norm.
This means that 2022 will be an amazing time to get into 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 prove that crypto is here to stay 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 indicator for the future of crypto, and a statistic 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 likely to remain this way in the future. The problem with Bitcoin is that it’s expensive. In October 2021, a single coin was 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 coin’ and exploded in value, making many investors rich. The truth is, you’ve missed the Dogecoin train that will make you a boatload in the short term, 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 make 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 critical to turning a profit. Keeping all this in mind can help you make the most of your crypto profits.