Don’t bite the ‘easy profits’ bait - earning on crypto isn’t a walk in the park (unless you are staking)
Whether you're still learning about crypto staking or grappling with the decision to stake your coins with a provider like CryptoStake versus trying trading, often hyped as a source of 100x profits in the blink of an eye by less-than-honest ads, let's together examine the cryptocurrency market's overall state over the past few years to give you a clearer perspective.This will help you grasp the challenges of generating profits unless you're actively staking your assets, meaning you're putting your funds to work around the clock with minimal human intervention and risk.
No matter what influencers or social media advertisements might claim, consistently profiting from cryptocurrency market speculations is far more challenging than maintaining a traditional nine-to-five job. This is not to advocate a lifetime of employment; instead, it's about safeguarding against the numerous risks that lurk behind the shiny facade.
What crypto staking means for modern investor
Let's assume that you are a beginner investor who works hard to put some money into a small but actively growing portfolio. Instead of splurging on a car or a luxurious holiday, you opt to invest in crypto, the most dynamically developing area of global finance. Investing in crypto is more like a fun hobby when you have a minuscule three-figure portfolio. However, when it balloons to four or five figures, you begin asking the ultimate question: "How can I save and multiply my capital in this inherently volatile market?”
Buying and holding (commonly known as 'HODLing' in crypto slang) is a straightforward investment approach that becomes even more effective when combined with a basic dollar-cost averaging strategy. This strategy involves buying a fixed amount of a cryptocurrency of your choosing at regular intervals, irrespective of the market's situation and the asset's price. For instance, you've committed to purchasing $1,000 worth of Ethereum (ETH) every weekend, when the market is generally considered to be the least volatile, and maintained this approach for a little over a year. Given that the average price of ETH in 2022/2023 stands around $1,500, you would have been able to accumulate over 32 ETH. By the way, this amount meets the minimum threshold required for staking on the Ethereum network.
Owning three dozen ETH constitutes a decent-sized portfolio that can be actively managed, rather than allowing those coins to sit idle and be eroded by unfavorable volatility. Unfortunately for holders, the market has been on the decline for the past year and a half, with the negative trend heavily exacerbated by the downfalls of the Terra (LUNA) network in May 2022, and a major crypto derivatives exchange FTX, along with its FTT token, later that same year.
LUNA and FTX catastrophes: a strong case for switching from trading to staking
Terra was a blockchain project that featured an algorithmic stablecoin (UST) and a decentralized finance (DeFi) protocol called Anchor, which offered a high-yield savings program. At the beginning of May, UST lost its peg to the USD, causing its value to plummet from $1 to $0.1, while the LUNA coin became virtually worthless after reaching an all-time high of $119.51.
FTX was the third-largest centralized exchange, run by Sam Bankman-Fried, one of the biggest names in the crypto industry. However, the media's report on FTX's leverage and solvency issues brought to light a host of problems, including possible fraud, which ultimately contributed to the platform's demise. As a result, FTX's native token FTT plummeted from $25 to the current $1.25, triggering a domino reaction across the entire cryptocurrency market.
Both events inflicted substantial damage on the entire industry and a series of cascading price drops, having left many investors holding large amounts of severely undervalued currencies or ‘the bags’ that supposed to be dead weight if there was no staking that offers a chanсe to earn rewards on those bags, thus partially recover the losses until the market reverses.
Crypto staking: a saving grace amid the bear market struggles
Crypto trading gets tricky and risky when the bears are in charge. In such an environment, even a minor bullish rally encounters substantial selling pressure at the nearest resistance levels, leading to rapid market crashes of 5% to 10% within hours. We have witnessed such a situation time and again in 2023, and heard countless stories about crypto traders blowing their accounts through over-leveraged trades.
It was only by the middle of this autumn, a traditionally positive season for cryptocurrencies, that the market began to display signs of recovery. However, as of the time of writing, ETH, by the way, one of the best cryptos to stake, remains 3% below its value from the past six months, and as much as 63% down from an all time high of $4,890, recorded on Binance on November 9, 2021. It means that many of those who invested in crypto over the past three years are likely to remain 'in the negative territory' until Ethereum becomes bullish again, which isn't expected to happen anytime soon, at least not until the first quarter of 2024. Such a situation doesn't leave those unfortunate investors with too many viable options, one of which is certainly staking with a reputable provider.
For a novice crypto investor, there’s never a good time to dive into the depths of a bearish market and risk causing a dent in the portfolio by making emotional decisions or betting on no-name altcoins. Speculating with non-fungible tokens (NFTs) seems like a thing of the past, as their capitalization vanished as soon as the market began trending downward. Don't get us wrong, having a few NFTs in your wallet is still trendy. However, constructing your entire investment strategy around these cool but often overrated tokens might be imprudent.
So, holding is impractical, trading is risky, and NFTs are more like enjoyable collectibles than serious portfolio builders. In these unfavorable conditions, what's the best way to earn income with crypto? A simple deduction leaves staking - the non-custodial staking to be precise - as the only meaningful option that the contemporary crypto industry can offer. With its stability, predictable returns, and reduced exposure to market volatility, non-custodial staking emerges as a reliable and secure avenue for sustainable income in the midst of turbulent market conditions.
By embracing non-custodial staking solutions offered by CryptoStake, investors can navigate the stormy seas of the crypto market with confidence. It not only provides a sanctuary against the pitfalls of holding and trading but also offers a steadfast path to financial growth, ensuring that, even in the face of market uncertainties, their crypto assets remain a source of reliable and consistent returns.