In the previous guide on how to earn Bitcoin, we touched upon the subject of trading digital currency for profits. Even though this is a very risky strategy, Bitcoin is not the only cryptocurrency you can trade on a daily basis in order to increase your BTC stash. Trading altcoins is a good way to make lots of money in a short timespan, but it’s also far riskier compared to Bitcoin trading.
One of the things you have to keep in mind is that altcoins are mostly subject to massive pump-and-dump schemes. In saying that, there are very few actual altcoin developers compared to the number of coins in existence. With over 3,000 altcoins at your disposal, there may be about 200 actual developers working on coins with an actual future plan in mind.
That is not to say there is no real innovation in altcoins, as they are a developer toolbox to test new features and additions which may make their way into the Bitcoin Core client at some point in the future. Especially in regards to anonymity, there are a lot of paths left to explore, and many coins are trying to one-up each other in that area.
With so many altcoins at your disposal comes another major problem: not every coin will make it to “bigger” exchanges, nor should they for that matter. But there are a few dozen altcoin exchanges and if you are really in this to make profit, you need to get your hands on these new altcoins as soon as possible. After all, once they hit a “bigger” exchange, prices can skyrocket upwards or downwards relatively fast.
On top of that, most altcoin traders cannot be bothered with creating an account for every altcoin exchange out there, let alone keep a few Bitcoins spread out among them. This creates an opportunity for novice users willing to explore the world of altcoin trading to increase their Bitcoin portfolio. It takes money to make money in this game, but you need to be prepared to lose it all in a heartbeat as well.
Abundance of Coins, But Which One To Pick?
If you look at altcoin trading from a pure profit perspective, any new coin you can get your hands on during the early stages could be your golden ticket to striking it rich. Unfortunately, with so many coins being released on a daily/weekly basis, any coins you can get your hands on quickly give a diminishing ratio of success in the long run.
It is nearly impossible to give you any pointers in this regard, as most altcoins are not about innovation or a development roadmap anymore but more about creating something and paying exchanges to list it as a trading pair as soon as possible. Regardless of how worthless you think a certain new coin might be, don’t be surprised when its price increases tenfold in a few days after the initial launch.
There is only one set of golden rules you have to keep in mind when it comes to trading altcoins: do your own research, do not invest money you can not afford to lose, and don’t invest during a price increase as the value will come down sooner rather than later during these pumps.
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