Crypto Investment Chronicles - The Rich will be Richer and the Poor will be Poorer
This might sound weird but the truth is "It takes money to make money". It's easier for someone who already has money to spin it and make a lot more money because there are a lot of opportunities that you can jump on if you have money. If you are poor you might find some opportunities but the lack of funds will always limit your adventures. Let's say the world is hit by a pandemic the average income earners will be looking to buy foodstuffs to survive but those who are rich will be looking for opportunities to buy bulk foodstuffs at a discount so that they resale to these low income and average earners.
How does the Poor become Poorer in Crypto Trading and Investing
Most of the time average and low-income earners will be always looking at making a 1000% profit in a short space of time. By doing so they end up exposing their capital to the vultures and risking what they can not afford to lose. They tend to invest all in one project and when that project fails they will be left with huge losses written all over their faces. I remember when I first got into Crypto investment I went out to the back and took a loan and invested in a scam project and it took me 6 months to repay the loan I took with some interest. So imagine 1 fatal error that I made haunted me for 6 months and I thought I learned a lesson that day. In 2020 I made a similar mistake but this time it was not a loan, it was my savings that I put to stake and was rug pulled, and that I hen I realized that my train is moving but in the reverse mode. I was losing more than I thought was gonna make and slowly my I was getting poorer lucky enough I realized it earlier and I changed my investment strategy.
A lot of investors will be looking for altcoins and tokens that have a lot of zeros after the comma e.g 0.000000003 and their hope will be to see that token dropping 2 to 3 zeros. Usually, that happens once in a blue moon if you pick the wrong altcoins, If you pick tokens that do not have utility and a solid whitepaper then the flame of that token will be just like a fire flame made from papers that don't last long. You will just have hopes of making a fortune but in the long run, you will lose a lot of money.
How does the Rich get Richer with Crypto Trading and investing
Since Cryptocurrency trading started we have seen those who were early investors making a lot through arbitrage trading and trading the volatility waves. Successful Traders mostly focus on successful altcoins and they ride the volatility waves. Let's say you have 1 Bitcoin and 1 BTC currently costs $40,000 and mostly BTC in a day it can make a move worth $1000 - $4000. So let's say you are an early investor on BTC and you own 2BTC, this means for every move that is worth $1000 you have an opportunity to walk away with $2000 profit. Lets us look on to another altcoin that is still cheap and has nice volatility;
Let's say you have $10,000 and you purchase 8547 MIR for $1.17 per coin, then the price hits a high of $2. Then you sell your MIR for $2 and your money will be $17,094 and that's $7094 profit in one day. Then the following day you buy 5291 MIR for $10,000 and you sell them at $2.41 per coin and get $12,751, that's $2,751 profit in one day and you keep on repeating the same process over and over making thousands every day from just buying and selling.
The trick is in pushing volumes, let's say you managed to buy 1000 BNB long back at $0.2 and if 1 BNB moves from $375 to $380 in one day that means you will be getting $5 for each BNB. So multiply that by 1000 and that's $5000 profit for that move only, but for someone who just has 1 BNB he will just get $5 profit and that's all. So an early investor has an advantage here or maybe if you are someone rich then you can just jump in and make money from those moves. I think it will be wise to stop chasing newly listed sh*tcoins expecting to make millions overnight. It takes money and time to make a lot of money in the Crypto Markets.
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