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One of the most recurring questions among aspiring investors is: "Can you make 1% a day in crypto?". This question, often asked by traders reflecting on their strategies, actually makes sense to be answered. Although achieving such a result in a limited period (days, weeks, or months at most), doing so for years is basically impossible. In fact, if you earn 1% a day, you will get a 3640% ROI in a year (return on investment): You can easily understand that this is a challenging mission: Earning 1% a day in crypto for a year, starting from $1,000$, you will obtain $37,300 in a year thanks to compound interest. PlasBit will analyze this intriguing question deeply, dissecting strategies, risks, and tips for those looking to embark on the difficult path of cryptocurrency investment. Whether you're a curious novice or a seasoned investor, there is much to learn and explore in this captivating financial universe.
Understanding Crypto Trading and Investment
To understand how crypto trading works, it is essential that you first fully understand how cryptocurrencies work. Bitcoin was born in 2009 and marked the beginning of a new financial revolution in which blockchain and decentralized finance are emerging. Some other popular cryptocurrencies include Ethereum, Solana, Ripple, and Tron.
In this exciting and dynamic technological process toward financial security and decentralization, there have been and continue to be many opportunities for profit. Those in the crypto world, however, are mainly divided into two groups of people: traders and investors.
Trading vs. Investing
Understanding the difference between investing and trading is essential to fully understand the risks and potential of both approaches.
- Trading: Cryptocurrency trading involves buying and selling digital assets to obtain short-term profits, often with leverage. Traders try to capitalize on market price fluctuations, executing buy and sell orders based on their technical and fundamental analyses. If you are a trader, you probably use a specific trading strategy, such as day trading (opening and closing positions within the same day), swing trading (holding positions for several days or weeks), and scalping (short-term trades aiming to exploit small price movements).
- Investing: Investing in cryptocurrencies means buying and hodling crypto in a long-term strategy, usually in a cold wallet, in the hope that their value will increase over time. Investors use a long-term approach, focusing on analyzing the project's fundamentals and potential while decreasing the possibility of stress and anxiety. If you believe that crypto has the potential to revolutionize sectors such as finance, technology, and even governance, and you want to keep these assets for a long term, then you are an investor.
Trading vs Investing to Earn 1% a Day in Crypto
Assessing the differences between trading and investing and their specific pros and cons is a crucial first step in understanding the type of approach you want to take. Indeed, there are key differences between the two strategies. Trading involves actively buying and selling digital assets on a short-term basis to capitalize on price fluctuations and generate profits. Traders mainly use technical analysis, including chart patterns, market trends, and cyclical analysis to open and close positions within a limited time frame. However, trading also comes with increased risk, as market movements can be unpredictable, and losses can occur rapidly, especially if you decide to use leverage. On the other hand, investing in cryptocurrencies involves taking a long-term approach, researching, persevering in believing your own ideas, and patience, with the expectation that their value will increase over time. To briefly recap, investors focus on fundamental analysis, evaluating the project's underlying technology, team, and potential for future growth, while traders focus mostly on technical analysis and short-term fluctuations.
So, can you make 1% a day in crypto investing or trading? While investing may offer a more stable and less stressful experience compared to trading, the potential for achieving a 1% daily return through investing alone may be less feasible due to the slower pace of growth and accumulation of wealth. Ultimately, both trading and investing have pros and cons, and you definitely must carefully consider your risk tolerance, time horizon, and financial goals when deciding which approach to pursue in the mission to earn 1% a day in crypto.
Is Making 1% a Day Realistic in Crypto? 7 Tips to Maximize Your Profit
Even if you can relatively easily make a 1% profit per day in crypto for a limited time, it's essential to recognize that such profits are not guaranteed and are very improbable to reach in a longer timeframe. Trading or investing in crypto brings many risks, including market fluctuations, regulatory uncertainties, technological vulnerabilities, and black swans, like the Terra (LUNA) and Do Kwon's case, in which a lot of investors committed suicide. Therefore, setting realistic expectations and adopting a pragmatic and rational approach to trading is paramount.
1. Be Realistic
Don't set your standards too high, and also accept defeat. Earning 1% per day for a period of months and weeks is very difficult and not for everyone, earning 1% per day for years is practically impossible. Because of compound interest, if you keep any profit you make invested, your capital will grow progressively more exponentially over the years. Accept that you cannot realistically earn 1% every day, and there will be days when you will lose. It is all about making the success rate much higher than the loss rate. It is difficult, and it takes caution, study, patience, perseverance, and emotional control.
2. Learn Technical and Fundamental Analysis
To be a successful trader or investor, you need to understand market trends and cycles, which can be achieved through technical and fundamental analysis.
Technical Analysis
Technical analysis is mainly exploited by short- and medium-term traders, and is used to indicate movements or patterns that can help try to predict future behavior. To do this, traders analyze price patterns, such as double-bottom or double-high, indicators, such as the RSI (Relative Strength Index). These tools are essential to determine the right timing and price at which to open and close positions, take profits, or limit losses. When done well, technical analysis, combined with fundamental analysis, can give a fairly accurate overview of cryptocurrency trends, potential and risks.
Fundamental Analysis
Fundamental analysis, on the other hand, offers a deeper understanding of the intrinsic value and technology of cryptocurrencies. By assessing factors such as project fundamentals, development team and leadership, blockchain technology, community support, tokenomics fundamentals, and market adoption, investors can have a clear overview of the potential of cryptocurrencies to invest today. Ultimately, fundamental analysis can allow you to understand which assets are truly valuable and promising, due to certain competitive advantages, and which ones are risky, because they have little intrinsic value.
We would suggest using both technical and fundamental analysis in your analysis and strategies. It will help you with a holistic view of the crypto market and can give you the knowledge to have a critical approach to market analysis.
3. Choose the Best Trading Strategy for You
There are a lot of crypto trading strategies, each tailored to suit different market conditions and trader preferences. The choice of strategy ultimately depends on individual goals, funds available to invest, and risk tolerance.
Day Trading Crypto
In day trading crypto, traders open and close positions on the same day, avoiding keeping them open overnight. It is also plausible to make several trades on the same day to capitalize on particular opportunities in the short term. These types of investors are actually the ones who can attempt to make a 1% daily profit because they aim for specific daily gains and use a rational, mathematical approach. They often use bots and automation to execute their strategies. While day trading crypto can be lucrative, it requires high skill, discipline, technical knowledge, and attentiveness to market conditions. Don't be impulsive!
Swing Trading
Swing traders rely on the cyclical nature of markets and the tendency of cryptocurrencies to bounce often in price ranges between supports and resistances. Unlike day traders, they cushion the impact of daily cryptocurrency volatility by seeking to capitalize on larger price movements, holding the trade open for days or weeks at most. Nevertheless, it would be best if you kept in mind that all the swing traders are playing the same game, so the competition to guess the correct entry and exit point is very hard and stressful.
Trend Following Trading
This strategy involves identifying to trade following the current market trend. It is a low-maintenance trading strategy because trades are made over periods of weeks or months, but it is still potentially very profitable if proper technical analysis has been carried out and the trend has been correctly identified. The main risk of this strategy is not considering black swans and sudden market changes.
Regardless of the chosen strategy, traders must backtest and refine their approaches to adapt to evolving market conditions. Consider A/B testing as the best way to define your trading strategy, keep track of the results, and act rationally and organized without being impulsive or irrational.
4. You Need to Learn No-Stop
You need to continuously learn and stay up-to-date in order to invest in cryptocurrencies. As you well know, there are numerous factors that influence cryptocurrency price movements, and if you want to be consistent in making profits, you also need to be consistent in continuing to learn. By continually improving your education, it will be easier not to make mistakes, but surely some mistakes and disappointments will come. Again, you will have to keep improving, learn from your defeats, persevere, and you will get better and better. In fact, you must understand the market dynamics and the tech behind the cryptocurrencies and analyze all the factors that contribute to the specific crypto's growth, such as tokenomics, team, community, and so on. There are various avenues for ongoing education in cryptocurrency trading, including online courses, webinars, forums, and educational materials provided by reputable sources. Lastly, be sure to participate in online forums, such as on Reddit, Discord, or Slack, social media groups, and cryptocurrency communities that allow traders to exchange ideas, share strategies and bot automation, learn from peers and experts in the field.
5. Emotional Control
Emotional control is essential in trading, even more than technical and fundamental analysis, as market volatility and uncertainty can trigger impulsive decision-making and irrational behavior. Fear, greed, and FOMO (fear of missing out) are common emotions that can lead to mistaken judgment and wrong trading choices. To maintain emotional control, you must develop self-awareness and discipline in your trading approach. This involves recognizing and acknowledging human bias, emotional triggers, such as fear of loss or the desire for quick profits, and implementing strategies to mitigate their impact on decision-making. Be sure to practice mindfulness techniques, such as deep breathing, yoga, or meditation, which can help you to stay calm, focused, and rational during periods of market fear. Remember to follow your plan rationally and do not act impulsively.
6. Portfolio Diversification
Diversification is the key to a more balanced, proportionate, and less risky investment strategy. This means both that cryptocurrencies should be just one of several different types of investment assets you should own, and that by investing in more cryptocurrencies you reduce the risk of a large loss. One simple approach is investing in a basket of different cryptocurrencies, like the crypto index funds, including established assets like Bitcoin and Ethereum and smaller, emerging altcoins. This kind of crypto index funds includes thematic crypto indices, such as decentralized finance (DeFi), non-fungible tokens (NFTs), and blockchain platforms. Remember that diversification can and must extend beyond cryptocurrencies to include traditional assets such as stocks, bonds, and commodities. Cryptocurrency investments should be only a small part of your assets. In fact, by allocating a portion of their portfolio to non-correlated assets, you reduce overall portfolio risk and enhance stability, reducing volatility. However, it's essential to strike a balance between diversification and concentration, as over-diversification can really dilute potential returns.
7. Researching the Right Coins to Invest In
Researching and selecting the right coins to invest in is a critical and difficult task in your crypto trading strategy. With thousands of cryptocurrencies released in the market, conducting DYOR (Do Your Own Research) is essential to identify promising investment opportunities and mitigate the risks of investing in a scam or pump-and-dump project. You should begin by analyzing the fundamentals of the cryptocurrency, including its underlying technology, use case, development team, and community support. Understanding the foundation of a specific cryptocurrency and evaluating its long-term potential can help inform investment decisions, avoiding evitable losses. Be sure you follow reputable cryptocurrency news sources, forums, and social media channels. Finally, do not forget to consider risk factors such as liquidity, market capitalization, and trading volume, because they are critical when evaluating potential investment opportunities. Investing in highly liquid and established cryptocurrencies can help mitigate price manipulation, slippage and spread risks.
Can you make 1% a day in crypto? Earning 1% per day for a short-medium wireframe in cryptocurrency trading is a challenging but not impossible goal, considering the short timeframe. Anyway, be sure to adopt a strategic and disciplined approach, being proactive and using critical thinking so that you can unlock the potential for significant profits while minimizing the risks inherent in this exciting and rapidly evolving asset class.
Staking Crypto: Earn a Passive % Income Every Day
Staking is potentially a method by which you can earn a daily percentage of profit from your investments passively, while contributing to the security and decentralization of the network. Together, we will better understand how staking works and how you can earn a percentage return on your investment.
How Does Staking Work?
Staking means participating in the proof-of-stake (PoS) consensus mechanism, where users lock up a certain amount of cryptocurrency as collateral to support network operations. In return for locking your coins through staking, you will be rewarded with additional tokens at regular intervals, typically in proportion to the amount of cryptocurrency you have staked. The primary benefit of staking coins is the ability to earn a passive income stream without the need for active trading or mining hardware. In fact, unlike proof-of-work (PoW) consensus mechanisms, requiring significant computational resources and energy consumption, staking is energy-efficient, easy-to-do, and accessible to anyone with a sufficient stake in the blockchain.
To earn from staking, you have to open a wallet compatible with your chosen blockchain, deposit fiat currencies, buy the cryptocurrency, and stake it, locking your funds in the network. If you have enough funds, you can actually open your own node, and be in effect an official validator of the chain. Otherwise, if your funds are limited, you can delegate them to a validator node and staking, leaving him a percentage of the earnings. The rewards earned from staking can vary depending on factors such as specific cryptocurrency, network participation, inflation rate, and staking duration. By the way, remember that staking also involves risks, including the potential loss of staked funds in the event of network attacks or protocol failures. Finally, please note that if you decide to unstake your cryptocurrencies, you may need to wait an unstaking period in which your funds are locked. So you will not be able to access your funds immediately if you stake them.
Best Crypto to Stake to Earn a Passive Daily Income
Here there are some of the top cryptocurrencies for staking:
- Ethereum 2.0 (ETH): Ethereum has just transitioned from the proof-of-work (PoW) to the proof-of-stake (PoS) consensus mechanism through Ethereum 2.0. Users can stake at least 32 ETH to become validators and earn rewards for validating blocks on the new network. The average ETH staking APY is now about 4%, but the percentage can be higher if you run your own node with 32 ETH.
- Cardano (ADA): Cardano is a third-generation blockchain that utilizes the Ouroboros consensus protocol, which is based on staking. Users can delegate ADA to staking pools to participate in the consensus process and receive rewards based on the amount of ADA staked. Cardano has an average staking APY of approximately 4%, but it depends on several factors.
- Solana (SOL): Solana is a high-performance blockchain platform that uses the proof-of-stake (PoS) consensus mechanism. Users can stake SOL to secure the network and participate in block production, earning rewards in return. The SOL estimated APY now is 5,5%.
- MultiversX (EGLD): MultiversX is a scalable blockchain platform that utilizes the Adaptive State Sharding mechanism and a secure proof-of-stake (PoS) consensus algorithm. Users can stake EGLD to help secure the network and validate transactions, earning rewards in EGLD. An estimation of EGLD APY now is 6%.
- Cosmos (ATOM): Cosmos is an interoperable blockchain network that uses the Tendermint proof-of-stake (PoS) consensus protocol. Users can stake ATOM to participate in block validation and network security, earning rewards. ATOM’s APY is the highest in this list, reaching 10%.
Risks of Investing in Cryptocurrencies
Investing in cryptocurrencies can offer good opportunities for profit, some people become millionaires with crypto. But it also comes with various risks that investors should be aware of. PlasBit strongly advises you to thoroughly read and understand the risks associated with cryptocurrency trading and investing. Now, we'll explore some of the critical risks associated.
1. Volatility
Volatility is an inherent factor in the cryptocurrency market. It is certainly a risk, because large price fluctuations are possible quickly, often causing considerable losses for most traders. Nevertheless, in the long term, it is not a factor that has so far affected the profitability of long term investors, both due to diversification (which allows for no major losses in the event of a collapse, as in the case of Terra Luna), and due to consistent returns over the years, which make short-term volatility negligible.
2. Regulatory Uncertainty
The regulation of crypto assets is another critical issue in the investment world. Indeed, the debate between security and commodity assets, the lack of security of some platforms, and attempts at hacks and scams all make the current market a kind of jungle. This leads to the risk of seeing one's cryptocurrencies lose value very quickly, if there is regulation that prevents one from buying, or selling, on exchanges, for example. You must stay informed about regulatory developments and consider the potential implications for your crypto investments.
3. Security Risks
Cryptocurrency exchanges and wallets are prime targets for hackers due to the potential for large financial gains. In fact, holding a lot of cryptocurrencies, whales and exchanges are the perfect targets for scammers. Instances of exchange hacks, thefts, and security breaches are not uncommon in the cryptocurrency space, and you should exercise caution when storing cryptocurrencies. Take precautions such as using hardware wallets, enabling two-factor authentication, and choosing reputable exchanges with robust security measures.
4. Market Manipulation
The manipulation of financial markets is no longer a secret. Large hedge funds steer the market to their own liking, having a large amount of assets and being able to greatly influence the price of a cryptocurrency. Furthermore, it is possible to fall into pump-and-dump schemes, wash trading, and other dangers that are always around the corner for crypto enthusiasts. Exercising caution and being informed is a must if one does not want to fall victim to scams on the Web3.
5. Technology Risks
Cryptocurrencies are built on complex blockchain technology, which is still relatively new and evolving. While blockchain technology offers many benefits, including decentralization and immutability, it also poses technical risks, such as software bugs, protocol vulnerabilities, and network forks. You must be aware of these risks and assess the technical robustness of the cryptocurrencies in which you are going to invest.
6. Lack of Liquidity
If there is limited trading activity and little volume for a cryptocurrency, it is very possible that there is a shortage of liquidity. This is a serious problem because it makes it difficult to buy and sell cryptocurrencies at a given price, as it is difficult to combine buy and sell orders at the same price, as there are few orders. This is a serious problem because it causes considerable losses on prolonged trading, and these are risks that a wise investor must take into account. Furthermore, in serious cases, it is even impossible to sell your cryptocurrencies due to missing buy orders: In this case, unfortunately, you have ended up in a pump-and-dump or a rug-pull.
In conclusion, investing in cryptocurrencies can be highly rewarding, but it also carries a range of risks that you should carefully consider. By being aware of these risks and taking appropriate precautions, you can mitigate potential losses and make informed decisions about cryptocurrency investments.
Ultimate Answer: Can You Make 1% a Day in Crypto?
Achieving this in a limited time frame, such as a week or even a month, is feasible and proven in the past. But, at the moment, nobody has succeeded in this long-term strategy; otherwise, over the years, he would have become the richest man in the world, and his portfolio would have performed much better than even Warren Buffet. The reality of consistently earning such returns in the volatile and unpredictable cryptocurrency markets is far more complex. While it's true that there may be occasions where traders achieve 1% daily returns or even higher, it's essential to approach such claims with caution and skepticism because it is almost impossible to keep this average return in the long term.
The inherent volatility and not-fully regulated crypto market mean that price movements can be erratic and unpredictable, making it challenging to sustainably generate consistent returns. Attempting to make 1% a day in crypto trading entails significant risks, including the potential for substantial losses. The pursuit of high daily returns may lead traders to engage in risky strategies, such as excessive leverage, speculative trading, or chasing volatile assets, which can result in catastrophic losses and hard psychological consequences. Remember to invest only what you can afford to lose.
While generating profits through cryptocurrency trading is possible, investors should set realistic expectations and focus on long-term sustainability rather than short-term gains. Instead of fixating on arbitrary daily return targets, investors should prioritize continued learning, risk management, diversification, and a disciplined trading approach. So, can you make 1% a day in crypto? In conclusion, while making 1% a day in cryptocurrency trading may be theoretically possible, it's not a realistic or sustainable goal for most traders, especially over the months or years. At PlasBit, we remind investors to approach cryptocurrency trading with caution, conduct thorough research, and prioritize prudent risk management to maximize their chances of success over the long term.
