Can you make money investing in Celo (CELO)? Of course, you can. But you can also lose money in the process. Celo began trading at below $2 but has since gone as high as $10. That means that people who bought the coin at the launch price or even earlier made a decent profit when they sold at the all-time high price.
On the other hand, people who bought CELO when it was trading at above $10 are looking at losses today. You can also lose money investing in CELO through hacks, careless trading and a series of crypto frauds.
Like with most cryptocurrencies, it is difficult to predict if the future will bring you higher profits or significant losses. Certainly, many experts believe that Celo has great potential and is an interesting project worth investing in.
In this guide, we will be looking at the different ways you can make money with CELO tokens. We will also go through some of the ways you can lose your money and how to avoid them.
Ways to Make Money With CELO Token
There are several ways to make money with CELO. The two most common are:
- Trading for the short term
- Buying and holding for the long term
- Staking
Trading CELO
Trading CELO is the simplest way to make money. Because of the volatility associated with this token, you can easily buy low and sell high for a profit. However, there are risks associated with trading cryptocurrencies.
When you trade CELO or cUSD against other currencies, you will be able to make profits in the short term. However, you also face the risk of losing all your money if the value of the coin suddenly drops or if it is delisted from exchanges.
Despite these risks, you can still make money with the right trading strategy.
Holding CELO
If you buy CELO and hold it for a long period of time, you can make a decent profit. However, this strategy does not work for everyone. It requires a lot of patience since the price might remain very volatile before it settles down. This means that you could lose some or all your money if you sell after a big price drop.
There is no set rule for how long you should hold your coins. It will depend on your risk tolerance and the maturity of the market, i.e., whether there are enough buyers and sellers with a clear understanding of what they want to achieve from a trade.
In most cases, the longer you hold, the more valuable your tokens might become.
Staking CELO
Unlike trading and holding, staking allows you to earn interest on your tokens. By running the Celo app wallet on dedicated hardware or a Virtual Private Server (VPS), you can gain passive income from interest earned on the coins in your wallets.
Staking is a great way of earning daily income, even though it does have some drawbacks. For instance, stakers need to ensure that they keep their wallets running at all times; in case they stop working or lose internet connection for too long, they will not be able to generate income.
The main difference between staking and holding is that staking allows you to earn passive income and possibly increase your tokens without buying more, while holding your tokens will not increase unless you buy more.
Check Out: Could Celo Be A Millionaire-Maker Coin?
Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.
How To Lose Money With Celo
While there are several ways of making money with CELO, it is also possible to lose money if you do not manage risk properly. The most common ways you can lose money with CELO include:
- Careless trading
- Crypto scams
- Hacking
Careless Trading
Trading in the cryptocurrency market is not for the faint-hearted. This is because prices are very volatile and can drop or rise quickly by several percentage points within a few hours.
This means that you could lose all of your investment, even if you had bought at what seemed like an attractive price. Trading without a plan is one of the main reasons why most people lose money in this market.
How to avoid losing money when trading CELO
To avoid losing money when trading CELO, you should always have a plan before you start trading. This means that you need to know your entry point and where you want to exit the trade.
Have a set of rules for yourself – this includes knowing how much loss you are willing to take – and stick to them at all times.
Also, do not place all your funds in a single crypto asset, or you could end up losing everything. Spread your risk among several cryptocurrencies and tokens that have strong fundamentals to avoid sinking with the ship when prices drop.
Even more importantly, take time to understand how trading works. This way, you will know when to take profits and avoid taking unnecessary risks.
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Crypto Scams
As with any emerging technology, there are many scams associated with the cryptocurrency market. Unfortunately, this means that you could lose CELO tokens to scammers pretending to be genuine investors.
How to avoid crypto scams
To avoid getting duped by these scammers, there are several things you should do before investing in any CELO. For instance, avoid investing in projects that promise high returns with little to no information on how they will achieve these targets.
Also, do not trust anyone that is asking you to invest in CELO outside of the official sources. This is because scammers are likely to take advantage of any excitement associated with this project. For instance, scammers might use social media or airdrops to lure you into investing in a fake project.
Hacking
Unfortunately, with the blockchain being decentralized and no one to regulate CELO, there is nothing that will prevent hackers from trying to break into your tokens. What's more; since this space is relatively unregulated, hackers are likely to get away with their dirty deeds, and there is not much you can do.
How to avoid losing your CELO tokens to hackers
To protect yourself from hackers, you should always store your tokens in a secure wallet. We recommend hardware wallets because they are the most secure. You should also keep your wallet safe by using a strong password, especially for desktop or mobile wallets.
Another thing you can do is to trade on exchanges that have a good track record of securing their clients' tokens. Also, store only the amount of CELO that you need for trading or staking on exchanges.
This way, you will not be affected greatly if a hacker takes advantage of any loophole to steal your tokens.
Conclusion: Should You Invest In Celo (CELO) Token In 2022?
By targeting mobile phone users, Celo offers a great way for people to access financial services. This is especially true if you consider how almost everyone has a mobile device and will soon have a crypto wallet.
This means that in the next few years, the coin could be very profitable for people who bought it early enough.
There are several ways of making money with this project. However, if you are not careful, you may also lose a lot of money in the process.
So, whether or not you want to invest in CELO depends on several things, such as your risk appetite, investment strategy and general market sentiment.
Read More:
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What Is Celo? Should You Invest In CELO And Where To Buy It?