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DEEP DIVE

The 6 Ways to make money in Crypto

The crypto bull market is here, and life-changing gains are on the horizon. Yet 90% of crypto investors still end up losing money.

Why is that?

When it comes to investing - there’s only one rule you should follow - buy low, sell high.

It sounds simple yes, but judging from the success rate, it’s definitely not easy.

Here’s how to think about investing so you can be in the 10% of winners.

Risk is everywhere.

As markets are always changing, one can never be 100% sure whether what you have bought will be worth more in the future.

Worse still, even if you know for sure an investment is sound, you can never pinpoint the timing.

As the saying goes, the market can remain irrational longer than you can remain solvent.

The markets are meant to be irrational, to tease you with promises of financial freedom and to rug your life savings before you had time to read that investing book you wanted to.

Pro tip: Don’t bet your life savings

This can be exacerbated when you bet money that you will need at a future date, as you set a self-imposed time condition on closing that trade. This causes (even more) volatility as you and similar traders like you are forced to close bad positions.

As such, you can be sure that every trade or investment has some risk. It has some chance of not working out, of going wrong. Often times the riskiest trades carry with them the potential for the highest rewards.

But each one needs to be evaluated on its own merits.

Trading is simply buying and selling a financial instrument.

In the realm of crypto, things get a bit more complicated in the details. Buying a token? Buying an NFT? Buy a token to get on the list to buy another token but only get that token a few months later?

I guess you could say it depends on the project.

That being said, let me use the example of a real life project, Common Wealth, to illustrate how you could have profited, and still can, from a crypto project.

Let’s look through the lens of the life cycle of a project, starting from the point it is only an idea in the head of a founder (or two).

This brings us to the first stage or opportunity to make money.

1 - Early stage / Seed investing/ Private sales

Sometimes founders build things entirely on their own. Most of the time, they recruit other founders and investors to help bring the idea to life.

In crypto, one needs funding for various things such as liquidity for trading and marketing and development expenses.

During this stage, they will sell tokens, NFTs or a portion of equity in the company to raise money to develop the product.

This stage is typically the most risky, as the product might only be on paper, or have a bare bones working concept.

Naturally, the more developed the product, the less risky it is to invest.

You can access private sale deals through investment DAOs, which are like decentralized VCs (venture capitalists) and these type of deals typically have cheapest investment price, since its the first time tokens are being sold to the market. However, the tokens are distributed over a period of time through a vesting agreement, which means that investors are exposed to the market for a longer time and not being able to cash out at the peak.

Common Wealth project example: Invest in Genesis NFTs or early token rounds

In Common Wealth, early supporters were given the opportunity to buy a Genesis Supporter NFT. This was the first round of fundraising done by the project from its community.

The benefits of the NFT include getting a share of the WLTH tokens when they are released and a share of protocol profits once operational.

In addition, they sold a portion of WLTH tokens to VCs and investment DAOs.

They raised another round of funding by releasing a second round of NFTs as well, albeit at a lower cost and with less benefits than the initial one.

How you could have made money

• If you bought these NFT's at launch, you would’ve been able to sell them at a higher multiple later on in the project and made a profit.

• If you bought and held these NFTs, you could’ve gained WLTH tokens which you could sell (once it launches) and potentially make a profit, depending on the price.

2 - IDOs / Public Sales / Launchpads

Just before the project is launching to the public, they will offer some of their tokens to the public at a certain price. This offers people the chance to get in before live trading begins and at the best vesting terms, if any.

Certain public sales bring massive gains for the investors, it's not uncommon to get a 10-20x on an investment.

For Common Wealth, they have offered their token via a public sale through the PAID Ignition platform ( a launchpad). Public participants could have bought some tokens.

How you could make money

• Buy the WLTH token during public sale

• Sell token once live on the open market and at a higher price

3 - TGEs / Token Launches

The third way to make money is when the project is ready to launch their token, called the Token Generation Event (TGE).

This is an exciting time because the public market gets to invest capital while private investors might want to take profits. It's a time for price discovery - meaning the price would be entering new territory as the market serves to determine what the project is worth.

There’s two strategies here:

1. Be quick and snipe the token within minutes, or

2. Wait a few days for early investors to cash out profits and the price to settled before jumping in.

Common Wealth has yet to launch their token, but when they do, here's what to do to make money

• Have money on an exchange account that is listing the WLTH token

• Watch the token when it goes live and over the next few days

• Once token has found a good support, jump in before the market starts pumping

• Sell the token once it has reached a good resistance level or your price target

4 - Live trading the market

Now that the token is live, you can enter and exit positions at any time.

The longer the token has been around, the more sure you can be it will stay around. This is called the Lindy Effect and it's why Bitcoin is the king of all crypto.

The more established the coin, the more you can safely trade larger time frames. The newer the token, and less established it is, the more you should constrain your trading to shorter time frames as the price would be very volatile and swing often.

To make money here, follow the number one rule:::

• Buy Low

• Sell High

5 - Use the Protocol

As crypto projects are often about money, they usually bring new and useful mechanisms to the market.

For example, decentralized exchanges, called DEXes, allow you to trade tokens on a specific blockchain with certain fees and liquidity.

Money markets, like Aave, let you deposit your crypto as collateral and take loans against them. Now you don’t need to sell your bitcoin to be able to use the liquidity to trade!

In Common Wealth's example, their service is to decentralize venture capital investment and to allow the public to get in on the private sale deals (see point 1 above). It’s a service to help users make money!

Using smart contracts and NFT tech they created a protocol whereby you can invest into a specific fund, which then goes on to invest into a basket of crypto projects.

How to make money

• Use Common Wealth's service to get access to private deals for crypto projects and get the largest gains possible!

• Invest in fund

• Get returns from fund (automatically), or

• Sell a part of or your entire stake in the fund (at a profit)

6 - Retroactive airdrops

The last way to make money is controversial because there isn't always straightforward communication on the possibility of airdrops.

Airdrops are a way for projects to reward users for using the protocol, giving feedback and ultimately allowing them to raise money.

They literally send them tokens to their wallets.

Airdrops are a complex subject - so much so that I recently wrote an ebook to help people understand and participate in them. If you haven’t checked it out yet - here’s the link, it’s free!

There are many types of airdrops, some web3 games are even rewarding users for playing games!

In the case of Common Wealth, they are airdropping tokens to the holders of the Genesis season 1 and 2 NFT holders. This is one of the benefits of holding the NFT.

In addition, they held one of the biggest airdrop campaigns for their first fund - The Priceless Fund - which was essentially given to the community for free! Over 1000 people were given a slice of the fund, valued at $1000 and will most likely be worth much more once the tokens it comprise of launch in the open market.

How you could have made money?

• Got a Genesis NFT (deadline passed)

• Contributed to the Common Wealth ecosystem (deadline passed)

• Got awarded the Common Wealth airdrop (deadline passed)

And that's it.

Six ways to make money in the crypto ecosystem.

It may seem confusing at first, but once you gain experience in one method you can then venture into others.

The tools are applicable across the system, and the more ways to make money means the higher chance that you do!

WORDS OF WISDOM