We all want to make money, preferably a little more than a few bucks, otherwise, you probably wouldn’t have ended up on NFThotShot. Nowadays you can make money in countless ways.
But the big question is: is it better to trade cryptos or NFTs? What is the most profitable? Where is the most or least risk? What can you learn the fastest?
These are all questions that you will find the answer to in this article. We make the comparison between trading cryptos and NFTs.
What is crypto?
We assume that you are somewhat familiar with crypto by now. In short: a cryptocurrency is a digital currency. So no physical euro or dollar in the sense of coins or bills. Cryptocurrency is used as an alternative. The most famous cryptocurrency is Bitcoin. In addition to Bitcoin, countless coins have now been developed. You can make payments with these cryptocurrencies.
In order to own crypto, you have to purchase coins. You can choose to buy x amount of coins once, hold (hold it for a longer period of time in the ‘hope’ that it will become worth more), but you can also sell them at a point that your coin is worth in value increased.
Suppose you buy Bitcoin for $1,000 on March 1, 2022, and you sell it three months later when the value is $1,250, then you have a $250 profit. You are currently trading crypto.
What is crypto trading?
With crypto trading, you buy and sell coins that you think have potential in value. It is therefore the intention to make profits with the purchased coins. Nowadays there are countless coins on the market, of which there are also a lot of shitcoins. We will come back to this later in the section on the disadvantages of crypto trading.
All coins that have been put on the market can therefore be bought and sold. If you get good at this, you can earn a lot of money with this.
The risks and benefits of trading crypto
Trading crypto is never without risks. That is why you always hear: trade with money that you can spare. You never know if things will go well and there is always a risk. Yet trading one currency is riskier than another.
It is almost impossible to imagine life without a currency such as Bitcoin. More and more companies are investing in Bitcoin or even Ethereum.in a number of places legal tender. So you see that Bitcoin is accepted in several places in the world. In addition, there are also a number of stablecoins. These are coins that remain the same in value, preventing huge fluctuations. You can’t trade this much, but you do need it to trade. With stablecoins, you can think of USDT, for example.
Profits made by trading can be reinvested, put on a crypto credit card, or transferred directly to your bank account. If you take your profits in time, there does not have to be much risk. A common strategy is that with 100% profit you always take your profit. You can then no longer suffer a loss with this money.
By doing good research into (new) projects, reading up on the white papers, and looking at the team behind the project, you learn whether projects can be trusted. If you do this, you minimize the risks to yourself as much as possible.
In addition, you can make certain technical or fundamental analyzes in order to estimate the projects and price decreases and increases. You cannot learn to make analyzes within one or two days. This takes time, and research and it is bound to go wrong.
Bull market & bear market
Taking profits is nice. Your numbers are in the plus, everyone is enthusiastic, you see a lot of green candles and there is no fear at all. The bull run, the period in which cryptocurrencies rise sharply, is a good time to sell. But there is always a bear market.
In contrast to the bull run, you see red candles here, there is a lot of panic and people are going to sell completely without a plan. Make sure you don’t go along with this and stick to your own plan. A bear market can be exciting for a while, but see it as an advantage: the coins have dropped in value and therefore cheaper. The bear market is therefore the perfect period to purchase new coins that you have been eyeing for a while. Also, pay attention here: make sure you know what you are doing and that you don’t just buy coins like crazy.
Always think of a good strategy to buy, good risk management but also a good exit strategy, to trade crypto as favorably as possible.
FOMO and emotions
Trading crypto can be heart-pounding. The crypto market is extremely volatile. This means that the value of coins is constantly in flux. The value of the coins you have purchased can therefore experience a huge plummet in no time, even outside the bull and bear market. And then it’s time to squeeze the butt. Advice? Never sell at a loss. You only really lose if you actually take your loss. Are you down? Then wait quietly, inhale and exhale, and only take action as soon as the coin rises in value again.
Emotions can also be a risk when trading crypto when things are going well. If you see everyone around you taking profits, you could be experiencing FOMO: Fear Of Missing Out. In other words: you also want to buy that coin that is rising so fast at that moment. Again, inhale, exhale, and wait for the peak to pass. Buy the coin at a later time when the price is more favorable. If you buy at the peak, it will also take much longer before you can sell at a profit.
It’s great that more and more promising projects are coming along, but this development also has a downside. You see more and more shitcoins passing by. Shitcoins are coins that have no project, roadmap, or technology but are completely hyped by the media or the team. This makes people buy like crazy, which increases the value. At the highest point, the team behind the shitcoin sells all the coins, making the team take all the winnings. This is known as pump & dump. The buyers who have fallen for the hype are left with a coin with no value.
Unfortunately. Scams and crypto are no exception. There are several ways to deal with scams. Think, for example, of the shitcoins, but also of crypto trading platforms that empty your wallet as soon as you have put money on it. So always research the exchange, and the currency and never click on links that you do not trust. Never, ever pass on your Metamask seed phrase to anyone.
In this article, you can read an overview of all kinds of scams from recent times. Make sure you don’t become a victim of this. Read yourself in detail about what you should pay attention to in crypto trading and the prevention of scams.
Success Stories of Crypto Traders
It’s no surprise that you can become incredibly rich from crypto trading. An exceptional example of the youngest crypto millionaire is the story of Erik Finman. He invested in Bitcoin at the age of 12 and has set up all kinds of projects with his crypto investments.
Erik Finman’s story is no exception. There are plenty of stories from people who invested a small amount years ago and have built up a considerable crypto existence.
So it is absolutely possible to make a lot of money trading crypto. Yet here again a reminder: invest with money that you can spare, do your own research, and don’t trade if you don’t understand what you’re doing. Also do not compare yourself with all kinds of millionaires and follow your own path.
What is an NFT?
NFTs are hot & happening. NFT stands for Non-Fungible Token and is a digital, unique asset. NFTs are all the rage at the moment and we can’t ignore the fact that they bring in a lot of money. Just like trading crypto, you can also trade NFTs.
Trading in NFTs
On various platforms, you can purchase an NFT for a certain price and sell it again for a higher price. In this way, you simply trade in NFTs.
It may sound simple: trading NFTs, but of course, you shouldn’t just start doing this if you don’t know anything about it. Behind every project is a team of developers, a certain technology, and a future plan. It is therefore important to do research so that you purchase a good and valuable NFT.
The risks and benefits of trading NFTs
As with crypto trading, there are also benefits, but also risks associated with trading NFTs. We’ll start with the benefits.
Awareness of NFTs
Trading NFTs is becoming increasingly well known and is increasingly brought to the attention of big names. Have you heard the story of Elon Musk and Dogecoin? After he tweeted about this, the value of the coin exploded. Elon Musk and many other celebrities have also delved into and spoken out about NFTs. This also ensures that NFTs are becoming increasingly popular. More and more famous people are joining the NFT communities.
NFTs in games
NFTs are now more than just a piece of digital art. NFTs are widely used in games, music, and also more and more in the Metaverse. In games, you need certain NFTs, where you can also add parts of NFTs to make your position in the game stronger. So you can actually use the NFTs. YouTube also wants to make more use of NFTs. Something that sometimes still feels elusive is being used in more and more places.
Unfortunately, we also deal with scams with NFTs. For example, there are more and more fake NFT websites or social media accounts or you can be hacked because you click on a link that criminals have shared in Discord or on other media channels. It is unfortunately no exception. So be aware of this and here too the following applies: do your own research.
NFTs are worth so much money because they are unique. Others like to abuse that. Some projects are copied almost one-to-one, which can make you think you’re purchasing a valuable, unique NFT. Afterward this turns out to be an (almost) copy of the project you actually had in mind. The purchased NFT is worthless, you can no longer sell it and you have lost your money. Bad luck. You accidentally counterfeit NFT bought
NFT Trader Success Stories
Buying and selling NFTs can make you a millionaire overnight if you’re lucky. We wrote an article about the 10 most expensive NFTs sold. And on February 14 this year (2022), it was even tweeted that the most expensive NFT of $23 million has been sold. This is an NFT of CryptoPunks.
Do you know the story of Sultan Ghozali? For five years he took selfies every day and sold them as NFTs. With success, because in no time his meaningless selfies were worth over 314 ETH. This is then one million dollars.
This is a success story, but you understand that you don’t have to hope for this when you start trading
Is it better to trade crypto or NFTs? It will not surprise you that we (can) not give an unambiguous answer to this. Trading crypto and NFTs requires knowledge, time, and experience. It is different for everyone where your interest or focus lies. One has a keen eye for trading crypto, while the other is extremely successful in trading NFTs.
At the time of writing, we are in a downtrend when it comes to the typical cryptocurrencies and more money is being made with NFTs. This may change again in a few weeks or months.