Secondary Investment Methodology in the Crypto World
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Secondary Investment Methodology in the Crypto World
Some ways to make money in cryptocurrency.
Navigating Web3 tides with focused insights
Author: Shivsak
Translation: TechFlow intern
In cryptocurrency, there are multiple ways to make money. This article introduces several methods to help you earn.
1. Buy and Hold (HODL)
Purchase tokens with solid fundamentals that have performed well over long-term observation.
• Conduct thorough research before buying.
• Only sell when there is a significant change in fundamentals that invalidates your research.
Advantages:
• A passive strategy
• Requires minimal time and effort
• Low stress, since you don't sell frequently
• Generally hard to go wrong if you buy reliable tokens and manage position sizing appropriately
Disadvantages:
• Requires patience
• Not the fastest way to make money (but has high success rate)
2. Altcoin Trading
Many people have become extremely wealthy through altcoins, especially during bull markets. Coins like LUNA, MATIC, and SOL increased up to 100x within 12–18 months. While I'm not the most successful altcoin trader, I've learned a few things along the way:
• It might already be too late when a coin you're interested in gets featured by a YouTuber with 500k subscribers.
• You need to know where to find the next alpha.
• High-quality low-market-cap coins have greater upside potential.
• However, low-market-cap coins can also drop harder during broad market downturns.
• You must stick to your profit-taking rules.
Altcoin trading differs from HODLing—you must understand what you're doing.
HODL: You're investing in tokens with strong fundamentals that you believe in for the long term.
Altcoin trading: You're speculating on narratives and trends to make profits.
Advantages of Altcoin Trading:
• Excellent strategy during bull markets
• Can significantly grow your portfolio
Disadvantages:
• Most altcoins underperform ETH. Finding alpha isn't easy.
• Requires substantial time dedicated to research for success.
• High risk—bear markets can destroy your portfolio.
3. NFTs
Find NFTs, buy them at mint or at a low price, promote them within communities/markets, and sell when prices rise.
Advantages:
• A few successful trades can increase your holdings 10–100x
• Greater profit potential through community engagement, whitelist access, etc.
Disadvantages:
• Hard to pick winners; many small projects become worthless once initial marketing fades.
• Requires extensive research, whitelist applications, community participation, etc.
• NFTs are less liquid than altcoins. You can't always sell instantly—you must find buyers.
4. Leveraged Trading
This is often highly attractive to newcomers in crypto. "If BTC rises 50%, I can make 500% with leverage." Tempting, but risky. My view on leveraged trading: It requires far more skill than you think—understanding markets, technical analysis, timing, risk management, position sizing, knowing when to trust signals or not, and much more.
Advantages:
• Can profit in both bull and bear markets if done correctly
• Helps learn how to use different tools for hedging or increasing leverage.
Disadvantages:
• Most traders lose money.
• Requires significant time and practice, often at the cost of losing money—don't assume you're an expert after watching a few videos.
• Requires constant active monitoring.
• Exposes you to many uncontrollable risks.
5. Single-Asset Staking
This is an area I’ve consistently focused on, and it teaches you a lot about cryptocurrency—it opens your mind to understanding how many things work.
Advantages:
• A great complement to HODLing. If you’re already holding a token, you can earn extra yield without selling.
• Many options available to generate yield on your crypto.
• Can be active or passive, depending on your goals.
• Involves interacting with protocols (not just buying tokens).
• Passive income strategies can boost your crypto returns by 10–20%.
Disadvantages:
• Steep learning curve with many new terms and concepts.
• Researching, executing, and tracking positions can be quite time-consuming.
• Chasing high APYs may lead to investing in junk tokens, increasing risk.
• Connecting to more protocols increases exposure to hacks, bugs, etc.—you must take security seriously.
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