How To Make (Or Lose) Money With Cosmos (ATOM)

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Cryptoasset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.

Last Updated November 22nd 2021
6 Min Read

How can you make money with Cosmos? Can you lose money with Cosmos, and even more importantly, how do you protect your Cosmos investment and keep as much as you make?

We will start by saying that there exist multiple beginner-friendly and highly rewarding ways of making money with Cosmos. But we must also caution that you can lose the income from Cosmos investing and your initial capital investment just as easily as it was earned. Making and retaining money with Cosmos, therefore, boils down to the art of balancing between income-generating opportunities and risk exposure.

Here is an example:

If you invested $1,000 in Cosmos on 1st January 2021, you would have grown this investment by 400%+ to $4,000 by mid-February - less than two months later. Similarly, if you had invested $1,000 in Cosmos at its peak price of $29 on 8th May 2021, you would have lost more than 65% and had your investment shrink to $350 by 23rd May - less than 2 weeks later.

Of course, the art of making and losing money with Cosmos - or any other cryptocurrency - is more complicated, especially when you factor in the different external factors. This post will, however, seek to simplify this by helping you understand straightforward ways of making money with ATOM available to you, how others have lost Cosmos investments in the past, and how to maintain the integrity of your investment.

Read on.

How To Make Money With Cosmos (ATOM)

We need to start by mentioning that ATOM is designed to serve as the native token for the Cosmos network - the internet of blockchain. It has, however, been picked up as a speculative investment product by the crypto community, who make a living out of interacting with it in different ways. Here are the three most common:

1. Investing (HODLing)

Investing in Cosmos has to be the easiest and most beginner-friendly way of making money with ATOM. By investing, we mean buying and holding on to ATOM tokens for a long time, watching as the crypto and your investment appreciate in value.

Look at it this way, Cosmos was launched via an ICO on 5th April d 2017, where 236 million ATOM tokens were sold for $17.3 Million - giving it an introductory price of $0.07. Four and half years later, the altcoin price averages $30. This says that if you had participated in the Cosmos ICO and invested $1,000, this value investment would have appreciated by 42000% to reach $420,000 today.

To get started with Cosmos investing, you only need to create a user account with an exchange that lists ATOM, deposits funds, buys ATOM tokens, and moves them to a crypto wallet.

2. Trading

Trading is a short-term investing strategy. It involves buying ATOM tokens - if possible in a dip - and selling them immediately their price improves. The highly volatile nature of Cosmos’ price action makes it a perfect trading instrument.

Look at it this way, it is not uncommon for Cosmos prices to fluctuate by double-digit percent percentages in a day. If you are experienced enough and can manage to pluck a gain of just 1% per day, you will have grown your Cosmos investment by 365% at the end of the year.

3. Staking

Yes, you can stake ATOM tokens in the Cosmos Hub in return for the rights to vote on proposals on the network, the privilege of securing the Cosmos network, and the reward is in the form of more ATOM tokens. At the moment, the typical interest rate on the Cosmos Hub is 9.7% annually. That is to say that for every 1000 ATOM tokens you lock in the hub, you will receive an additional 89.18 ATOMs (less the 10.28% commission).

At the moment, the minimum staking limit for the top 100 validators looking to run full nodes for the platform is 39,047 ATOMs. You can also choose to stake lower ATOM tokens on third-party platforms as the Exodus wallet for similar rewards.

Check Out: Pros And Cons Of Investing In Cosmos (ATOM)

Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.

Ways To Lose Money With Cosmos (ATOM)

Careless trading

We call it careless trading because, while it is risky by nature, not everyone who trades Cosmos loses their investment. You only lose money when trading Cosmos - and virtually any other crypto/financial instrument - if you trade without a strategy or allow emotions to cloud your trades investment decisions. You will also lose money when trading if you are inexperienced and don’t have access to the much-needed trading, analysis, and research tools.

Solution: You can avoid losing money when trading Cosmos by first ensuring that you accumulate enough trading experience and perfecting a trading strategy - this can be done using a free demo trader account. You also need to learn how to take emotional bias from the decision-making process. Lastly, you need access to advanced analytical and research tools.

Cosmos theft and hacks

There also is the risk of losing your Cosmos investment to hackers. In the first half of 2021, for instance, CipherTrace reports that more than $681 million worth of crypto assets had been lost to hackers and other cybercriminals. The report also indicates that hackers are increasingly targeting the DeFi niche - a key tenet of the Cosmos ecosystem - thus the reason to be cautious with DeFi protocols and investment-focused crypto dApps.

Solution: There are several measures you can take to shield your ATOM investment from hacks and exposure to cyber-related crimes. For starters, you will want to invest in a reliable hardware wallet that stores your Cosmos keys offline. If you must interact with the DeFi projects and investment dApps, vet them and their developers thoroughly before investing. We would also like to encourage you to start small and avoid having all your ATOM eggs in one DeFi/dApps basket.

Don't Miss: Is Cosmos (ATOM) Safe?

Crypto scams

Crypto scams are also on the rise, and they range from crypto Ponzi and pyramid schemes to rug pulls, crypto pump and dump schemes, and phishing via fake emails, websites, and social media promotions. They all have a few things in common. Most investment schemes promise above-market rate returns on investment without going into details on how this is realized. Phishing scams, on the other hand, often involve action-based prompts, such as an ‘urgent need to change your wallet/trader account credentials.

Solution: You can avoid falling for scams by maintaining reasonable expectations when it comes to crypto investments. For starters, avoid falling for MLM schemes that promise high returns on investment, especially when they are designed or promoted by individuals with sketchy or non-existent backgrounds. You can also avoid fake websites and emails by whitelisting official email addresses for your wallet and crypto exchanges and bookmarking exchange and wallet websites.

Conclusion: How To Make (Or Lose) Money With Cosmos

You can make money when you invest in ATOM tokens when you trade Cosmos and by staking either on the Cosmos network or third-party staking platforms. You can also lose money with Cosmos if you trade carelessly, if either your exchange or personal wallet are hacked and if you are scammed out of your ATOM tokens by fraudsters through phishing and pyramid schemes.

To retain as much you earn from you make from investing, trading, and staking Cosmos, you will need to avoid losing cash to hackers by investing in a hardware wallet. You also need to come up with a working strategy and eliminate emotional bias if you are to avoid big losses when trading. But more importantly, you will need to keep abreast with industry news to learn more about how to keep your crypto investments safe as well as how to avoid emerging crypto scams. 

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