How To Make (or Lose) Money with Bitcoin Cash?
Like every other cryptocurrency out there, Bitcoin Cash is highly volatile and speculative. This means that you can either make (or lose) a lot of money, depending on what you know and how to handle your investment.
You either win big or lose everything if you are not careful or start investing without doing enough research.
What makes Bitcoin Cash both risky and appealing is that its price is highly volatile, with massive movements in both directions. This means that if you are holding Bitcoins, your current holdings could be worth double within a few hours. It can also happen that they are valued at half the price of what they were before.
It might not seem like it at first, but this is actually something to look forward to, not to fear. So, how can you make (or lose) money with Bitcoin Cash?
How To Make Money With Bitcoin Cash
Let's start right at the start: what makes most people interested in cryptocurrency investments is greater returns on their initial investment. There are many ways by which you can increase your crypto stack when you decide to invest in Bitcoin Cash (BCH).
Mining is the most popular way of earning from cryptocurrencies such as Bitcoin Cash and Bitcoin. There are several ways of going about this: you can either mine at home or use a cloud mining service.
However, both come with their own problems. Mining from home requires very powerful computers, which are expensive to buy and maintain, as well as a significant level of technical knowledge. Cloud mining companies generally have a bad reputation for either scammers or incompetent ones putting their users at risk.
If you can afford it, though, either one will work just fine — but there is another option that is even better.
Investing in Bitcoin Cash
Even though you can use Bitcoin Cash to trade other cryptocurrencies, the best thing you can do with it is purchase and hold it long-term. The reason for this should be clear: holding Bitcoin cash means that if the coin gains value, so will your investment.
Of course, this might also make it lose value, but given the fact that its price is volatile, you are more likely to earn money with this approach. You can either hold your coins for a few days or months, depending mostly on the price growth rate.
We usually recommend this method for newbies, as it is far less risky than trying to mine or trade your way into riches. However, you could still potentially lose everything if the market crashes, so only spend what you can afford to lose.
Trading Bitcoin Cash
Unlike investing in BCH for the long term, trading Bitcoin Cash is a bit different. You cannot sit on your coins and wait for the price to rise - you have to actively trade, buying and selling as currency prices change so that you always maximize your profits.
This is the best way of getting more coins if you already hold some, but it comes with a few downsides: most traders lose money because they are not experienced enough. The cryptocurrency market is highly volatile, and it takes a lot of experience to know when you should buy or sell in order to get the most value out of your funds.
With that said, trading can earn you more than a long-term investment if done right - but remember that it is more complicated and could milk a novice trader dry.
Ways To Lose Money in Bitcoin Cash
Just like with traditional investment, it is fairly easy to misuse crypto funds and lose them all. However, the thing that makes this different from other markets is that cryptocurrency prices are highly volatile, which means you could even completely wipe out your bankroll within hours if you make a very bad decision.
The following are some of the ways that might cause you to lose your money while investing in BCH.
Some people trade and invest in cryptocurrency with the goal of scamming you out of your money. It happens more often than you might think, and it is not just novice traders who fall for these simple tricks — even experienced ones can be caught off guard.
Some common scams that you should watch out for are using fake exchanges, mining schemes (which usually turn out to be malware), and pump and dump groups.
Of course, there are many more types of crypto scams, so do your research before you even think about entering any investment or trade with someone else.
Hacking / Malware
One of the other things that can cause you to lose money with Bitcoin Cash is malware. Mining, hacks, and other malicious attacks are becoming more common.
A good example happened not too long ago when someone hacked into NiceHash, a cloud mining service provider used by many miners all over the world. As a result, over $64 million worth of Bitcoin was stolen.
You do not want to be a target for hackers if you seek to make any kind of decent profit, so watch out for anything fishy on both your computer and cryptocurrency wallets.
One way to avoid falling victim to crypto hacks is to use cold storage for all your coins. But even this cannot protect you against malware that comes pre-installed on your computer or mobile device, which is why it is best to practice caution at all times.
While you can make money by trading Bitcoin Cash BCH, you might also lose money while at it. Trading requires a lot of skill, time, and effort to be put in before you are even remotely good at it.
As we mentioned above, the world of cryptocurrency trading is filled with both winners and losers. You can easily become one of the losers if you are not careful enough when investing your funds in different markets.
You can avoid losing money through BCH trading by doing your research before you even think about buying or selling anything. Learn technical analysis and how markets work so that you know when to act in order to get the most profit out of it. When you understand what you are doing, only then should you go ahead and invest your currency into different markets.
There are several currency-based multi-level marketing schemes that exist where the only way to earn more is by recruiting other people into it. These usually go hand in hand with some sort of cloud mining or similar investment, which you are required to pay for if you want to make any profit with them.
In most cases, people might be okay with making a bit of money from signing up their friends or family members in these schemes, but they end up losing the majority of what they have invested in there. For instance, one scheme that has been pretty popular recently is BitConnect — it promised monthly returns for investors who gave it their funds, but they stopped paying out after a while.
Another example is OneCoin, a Ponzi scheme that was considered to be a scam by various countries and cryptocurrency experts.
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Bitcoin Cash is one of the most popular cryptocurrencies in the market today. And like most cryptocurrencies, you can either lose or make money while investing in it. The best ways to make money with BCH are through holding, mining and trading.
On the other hand, careless trading, hacking, scams and falling for MLM and Ponzi schemes will see you losing all your money.
So, be careful and do enough research before you decide to invest in Bitcoin Cash.
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Virtual currencies are highly volatile. Your capital is at risk.