The crypto ecosystem is growing more and more in the country thanks to its mode of operation, low barriers to entry, 100% online and with low requirements. Notable differences with respect to traditional markets.
Those who already have a little more experience, stopped limiting themselves to just buying and aim at yields. Beyond staking or “crypto fixed terms”, which raises doubts after the collapse of LUNA and USDT, two other options appear: trading and mining.
Cryptocurrency trading: what is it and what to consider?
Trading consists of buying and selling liquid assets in a short period of time. The goal is to make a profit on the difference in prices. That is, “buy low and sell high”.
Darian Yane, economist and master in business administration, tells iProUP that “the most important thing to keep in mind is capital management. Trading is not a magical method to become a millionaire from one day to the next, but it works in the long-term”.
He warns that no one will be successful in 100% of the operations, no matter how expert they are: the key is to win more than you lose. “Trading can be for anyone, but it is essential that you are disciplined and have patience,” says Yane, who points out that at the beginning you have to start with little money.
Nahuel Martínez, director of operations and co-founder of South American Miners, tells iProUP: “It is a mechanism that must be taken as a serious activity” so as not to have surprises.
“It is a difficult path and requires a lot of learning. We must constantly watch the market and read news that affects valuations. In short, we must always be up-to-date so as not to miss out on entry or exit opportunities,” he highlights.
Indeed, experts say that before investing, two types of evaluations should be carried out:
- Internal: available capital, type of investor, risk that is willing to assume, desired duration and expected return
- External: technical analysis (based on the evolution of prices); and the fundamentals (robustness of that asset beyond its price)
Maximiliano Hinz, director of Binance, points out to iProUP: “Before trading, it is important to carry out an analysis and have a plan. There is no bad strategy if a study underlies it.”
“It is important to learn because, although it is possible to operate without knowledge, this can cause us great losses. One of the easiest ways to learn is to use the test mode offered by many platforms,” recommends Martínez.
Regarding the initial capital, Camilo Rodríguez, trader and teacher at CR Academia, assures iProUP that it is a subjective amount: “It is not about an amount, but about whether the investment is strategic.”
Therefore, experts recommend allocating no more than 10% of the crypto portfolio to trading, at least in an initial stage. And they classify the coins to choose based on the level of risk:
- High cap coin: High cap currencies, listed from 1 to 10 (led by Bitcoin and Ethereum)
- Medium cap coin: from 11th to 100th position, they offer moderate risk and could “sneak” into the top-ten
- Heavy low cap coin: very low capitalization or “shitcoins” (junk coins), which are highly volatile
Trading is a high risk investment and requires some knowledge of the markets
Federico Goldberg, executive director of Tienda Crypto, adds to iProUP that the next step is to find a platform that:
- Have good currency availability, to maximize the chances of finding opportunities
- Do not charge high commissions, so that you do not discourage moving capital
- Offer 24-hour availability with no hang-ups.
Yane emphasizes consistency rather than starting money: “I always say that if you make a return of 1% per day per year, you’ll be making close to 400% per year. If someone earns that percentage over a number of years, they’ll make a big difference.” difference no matter how much money you started with. The key is in the long run,” he adds.
What is crypto mining and how to get started?
Cryptocurrency mining is a process in which transactions from a network are validated and aggregated and then recorded on the blockchain.
Thus, thousands of computers in the world compete to solve a mathematical puzzle that allows strengthening network security. Those who do it before will get the new coins that are created as a reward.
“The first thing that is required is to have knowledge. Also to have the appropriate Bitcoin equipment, since Ethereum will not use mining soon,” says Goldberg, referring to the ASIC equipment designed to operate in Bitcoin and that costs about 8,000 dollars.
Martínez points out: “You can start with an ASIC, although you have to take into account the necessary space, not only because of the size of the equipment, but also because of other issues such as the noise they generate.” And he assures that it is profitable for any investor, although the profit will depend on the equipment that he acquires.
“Some grant US$280 per month and others US$320. That is multiplied according to the quantity and quality that is acquired. It is an activity that leaves a considerable and constant income compared to other investments,” he remarks.
However, Goldberg warns: “We must consider the end of energy subsidies. The cost is related to consumption and whoever mines will surely exceed 400 kWh per month.” Yane adds that profitability depends on the price of the asset to be mined. If the price drops too low, many pull the plug because the costs rise above what they can get.
Today it is estimated that it will take about three years to recover the investment in this equipment, since the value of the currency fell two-thirds from its peak in November.
Is it more profitable to trade or mine cryptocurrencies?
For Yane, at the moment it is more profitable to trade than to mine, although he remembers that it is not something simple: it requires knowledge, experience and discipline.
“Anyone can read a chart and try to interpret it, but the experience required to trade efficiently is not achieved in two days, as it involves many aspects,” she remarks.
Martínez believes that they are two totally different activities. In the case of mining, the investor is “guaranteed” a certain amount of cryptocurrencies per month and can make a projection, while “trading is totally variable and the profit will depend on whether the expected results are given.”
Thus, trading has higher profit potential, depending on risk and skill, while mining offers greater stability. “None, by itself, is better than another. It will depend on the knowledge of each one, on the bet that is made and, also, of course, on luck,” concludes Goldberg.