4 Wise Things To Do With Your Profits From Crypto
You can earn profits from crypto by trading or a long-term investment. Buying and selling crypto could be, perhaps, one of the ways you can make money online since it can be easy, doesn’t require thousands of capital, and you can do it anywhere.
More so, the following are some of the things you can do with your crypto profits:
1. Buy Rental Properties
One of the things you can consider doing with your crypto profits is to invest in rental properties. This can be a way to diversify your digital assets to tangible assets, which could be a source of stable income in the long run. And perhaps, among the good things about this venture is that you can save on paying taxes thanks to the Tax Cuts and Jobs Act of 2017.
The law was created so that investors could take advantage of the tax by spreading wealth into areas that need more investors and businesses. These areas are known as ‘O-zones’ or ‘Opportunity Zones.’ When you reinvest your profits from crypto in these O-zones, the new law doesn’t require you to pay tax.
Generally, if you want to reinvest your crypto profits, you must pay tax on the gain. This means that the IRS would take a portion of that profit. But based on this law, you can get a discount of at least 10% on the original tax if you keep your investment in the O-zones for a minimum of five years. You can also enjoy a 15% discount and reduction if your investment lasts for at least seven years.
Learning more about crypto taxes and how they work can be overwhelming. For that reason, it’d be best to consult and work with a cryptocurrency tax advisor to guide you on how you can proceed with reinvesting your profits.
2. Invest In NFTs
Non-fungible tokens are now becoming more popular alongside cryptocurrencies. NFTs are tokens made on a blockchain proving that you’re the rightful owner of a unique digital asset. It’s different in the sense that it’s one of a kind and not just a pixelated punk face, a JPEG, or a picture of a bored ape.
Because no two NFTs are alike, you can’t directly exchange one NFT for one another. With such, this makes NFTs another good investment to explore.
An NFT represents an intelligent contract, otherwise known as a code. The smart contract is essential as it allows an NFT to be transferred or sold aside from using it to interact in the metaverse and set royalties for artists.
Ideally, look for an NFT that has a lot of value and a strong brand. That way, your crypto profits can be worth it because the value of NFT holds value as long as you have a buyer. However, this means that you should also consider it a risk since the value of NFT generally depends on someone’s willingness to buy it. With such, it may be better to own NFTs that are not more than 10% of your investment.
3. Buy Dividend Stocks
When you have enough profits from crypto, buying stocks could also be a good option to explore. With this, choose the stocks that give dividends quarterly or annually. This means you can receive a percentage from the shares you’ve bought. You can use it as a hedge against inflation and diversify your investment for a long-term investment.
4. Trade New Coins
Or perhaps, you can also consider buying new coins using the profits from your crypto investment. You could also trade aside from a buy-and-hold strategy for long-term investments. Doing this can allow you to exploit short-term opportunities from other cryptos.
That’s because the volatility of the crypto market can quickly change the prices of coins. For instance, the coin’s price may be too low now, but it may suddenly hit its all-time high at any time. If you’re day trading, then you can take advantage of this.
However, you need to become technically and analytically skilled to become successful in crypto trading. You must know how to analyze market charts to predict price decreases and increases accuracy. This can also help you make a long or short position based on your analysis of a coin’s price rise or fall. As a result, you can earn profits regardless of the crypto market’s condition.
While it’s possible to earn big profits from crypto, spreading your assets can be a good approach. It’s recommended to diversify your earnings to grow your investment portfolio. This is because when one market is low, the other investments can balance it. In addition, it can allow you to earn profits from various assets, helping improve your profitability not only in crypto but also in other investments such as stocks and real estate.
None of the information on this website is investment or financial advice and does not necessarily reflect the views of CryptoMode or the author. CryptoMode is not responsible for any financial losses sustained by acting on information provided on this website by its authors or clients. Always conduct your research before making financial commitments, especially with third-party reviews, presales, and other opportunities.