The prices of ETH and BTC have been pretty steep, but you should not let them scare you. It is possible to start your crypto journey with only $1,000 and become the huge success that you always wanted.
As a retail investor in the crypto industry, you need to appreciate that the landscape has undergone a major transformation. Today, investing only requires a fraction of what you would have required in the past. Again, technology has simplified everything so much and the number of assets available is pretty large.
In the crypto world, the start of the cryptos around 2009 was shaky but the coins have grown and are now worth more than $1.03 trillion. Bitcoin and Ethereum have particularly grown at supersonic speed. This does not mean that you are late.
With thousands of crypto coins hitting the market, being traded on exchanges and used for other reasons, the blockchain and crypto space is a lot more diverse. Investing in cryptocurrencies is more than simply blowing all your funds on a few ETH or BTC. So, if you only have $1,000, keep reading as we tell you some awesome ways to get started on the crypto journey.
Go for Altcoins with Potential for Growth
As we indicated earlier, there are thousands of crypto coins on the market. You can even get stablecoins, which are pegged on the value of fiat money and commodities. Remember that cryptos are not a sort of direct investment but are crucial in supporting trade in the exchanges and marketplaces.
Another option that you should throw into the ring is altcoins. These are considered the main alternatives to Bitcoin. The most notable thing about the price of altcoins is that they can move rapidly, at times by thousands of percentage in a night.
Let's take a closer look; if you have invested $1,000 and the price of the selected coin moves by 500%, the return on investment will be pretty awesome. In just 24 hours, it is possible to make over $4,000. So what if you maintain that trend for the entire month? The return on investment will be even higher.
Note that the price can also move against your prediction with a huge margin because of high volatility. This often happens in the event of pump-dump-schemes, where developers create coins, market them and then walk away after making money. So, buyers are left with coins that have no demand. To avoid this, you should carry due diligence before settling on a specific coin.
The good thing is that there are many reliable altcoins that you can work with. They are traded in major exchanges and come with reliable development teams. Some altcoins to consider are Cardano (ADA), XRP, Solana, and Polkadot (KO).
Play Axie Infinity
Do you love gaming? If you do, it is now possible to earn money simply by playing games. One of the blockchains that are facilitating this is the Axie Infinity, which you can access via most platforms, from Android to Windows. There are two ways you can earn some cash in Axie Infinity:
Earn an in-game currency SLP. This coin is traded in most exchanges.
Breed and sell Axies. The axolotl-esque creatures can be bred with SLPs before selling for ETH.
Although it might feel like this method takes a lot of time because you require playing the game and comprehending different nuances, the truth is that it can be a good option when getting used to it.
Investing in Blockchain ETFs
Are you the type of person who prefers traditional assets? Well, the crypto world has not forgotten you. Now, you can invest in blockchain ETFs. The good thing about blockchain ETFs is that you do not need to take a lot of time trying to select the preferred stocks or commodities. All that you need is to buy the targeted ETFs on the selected brokerage to diversify your portfolio.
While the names of different ETFs might look new, the good thing is that the ETFs are pretty reliable. This is because the ETF you pick selects and buys stocks of the top companies that have already adopted blockchain or are running in the blockchain niche. Indeed, they can be an excellent entry for people not willing to hit cryptos directly. Take the example of MicroStrategy Incorporated. If you select this ETF, it buys stocks of more than 20 leading firms. So, if you are a person with a lower-risk appetite, a one-time deposit of $1,000 can be a good choice for you.
Consider Staking, Yield Farming, and Liquidity Mining
In 2020, high-yield savings accounts returned high-interest rates. The high returns trend continued in early 2021. So, what exactly are yield farming, staking and liquidity mining?
Staking is the process of locking your crypto coins in their respective blockchain networks so that they help with confirming transactions. In return, you are rewarded with some part of the transaction fees. Here, you are not selling the coins and they will be returned to your crypto wallet after the staking period.
Yield farming involves lending out your cryptos to earn some interest. Liquidity mining is like yield farming, but on top of the interest, you get the native coin of the selected blockchain.
Staking is the easiest and less risky of the three. What you need to do is buy coins worth $1,000 and lock them to your preferred blockchain network. You can do this on your computer, but a simpler method is using a decentralised finance (DeFi) platform.
Buy/Invest in Select Crypto Company’s Stocks
If you are an investor willing to take a higher risk level, you could go for stocks of firms in the blockchain. Unlike ETFs, stocks can be riskier because you are dealing with individual security. Again, the number of companies dealing with cryptocurrencies might be few right away, but it will most likely continue growing as the industry grows.
At the moment, some of the companies that you can invest $1,000 in are Coinbase Global, PayPal, and CME Group. Remember that even with these firms, it is a good idea to follow the stock performance for some time before making the decision to buy.
Join an NFT Project
NFTs, shortening for non-fungible tokens (NFTs), are some of the hottest considerations in the crypto world today. NFTs are digital certificates that demonstrate the authenticity of digital art projects. Indeed, they can be used to represent anything, from artwork to digital albums. For example, the first tweet by Jack Dorsey was sold as an NFT for U$2.9 million. By participating in an NFT project, you can get a chance of $1,000 in giveaways of presale collection launch. Finally, you can sell them.
Investing in cryptocurrencies today is a way to join the fast-moving tech world. You do not need a lot of money to invest in this emerging niche: $1,000 can be a good point to start.
Note: This post has demonstrated a few options if you plan to invest a smaller amount in cryptocurrencies. Remember that the world of cryptocurrencies is unpredictable and that the risk related to this type of investment is always high. Lendela does not encourage anyone to take up a personal loan or any other type of credit to invest in cryptocurrencies.