Cryptovation.co had its soft-launch at Ambassador Coach’s event in collaboration with CoinBX.com with: ‘How to Make Money from Bitcoin and Cryptocurrencies?’ as topic. This blog is going to answer the question and tells you more about the history of Cryptovation.co.
We believe that there are in total four ways to make money from cryptocurrencies, which are:
· Blockchain Mining
· Speculative trading
· ICO Value Investing
It is a trade that profits by exploiting the price differences of identical cryptocurrencies on different market or different forms. So basically it is nothing more than looking at the price differences of the same cryptocurrencies at different exchanges, buying at the cheap price and selling at the high price. Making money has never been so easy.
Cryptovation.co specialises in arbitraging, because of the high returns with relatively low risks. We use three different arbitraging strategies:
- One-way arbitraging: The simplest of all. We see the price difference of the same cryptocurrency on different exchanges. We buy where the price is lower and send it to the exchange with the higher price and sell it there again. Profit is made within 1 to 15 minutes; depending on the architecture of the specific cryptocurrency (some transfer faster than others). Please note that we solely execute trades above 2% expected profit or more. This due to our risk management, but more elaborations on that in a future post.
2. Looping: It starts the same as the one-way arbitraging, we look at the price differences and buy low, send, sell high. The difference is that we want to send the money back to the starting exchange, so that we can execute the loop multiple times or for cash-out purposes.
a. After the initial profit is made out of the one-way, we look for a cryptocurrency with less price differences between the exchanges and use that to send the money back (or make profit again on a good day). This whole process takes a maximum of 30 minutes and therefore can be executed over and over again as long as the opportunity exists.
b. The second option for looping is having money on both exchanges from the beginning and send the profitable and settlement coin simultaneously. This cuts the profit in half, but as well as the cryptocurrency holding time (which makes it even less risky). This can be seen as drawing two half circles at the same time, which makes a complete circle.
c. Triangular loop: The act of exploiting an arbitrage opportunity resulting from a pricing discrepancy among three different cryptocurrencies and three different exchanges.
3. Blackbird: Here it gets slightly more complicated since it requires basic trading knowledge. Some of the major exchange markets offer speculative trading and allow you to open short and long positions. It sounds complicated and financial, but is in fact rather simple. Short positions are taken when the price is expected to decrease; you sell now and buy later. Long positions are taken when the price is expected to go up, you buy now and sell later. Well now, what is this mysterious strategy called blackbird? We take a long position where the price is low and a short position where the price is high. This way we always make profit when the prices reach equilibrium, as they inevitably do.
Cryptovation.co holds cryptocurrencies for a very short period and changes it back to fiat almost immediately. With arbitraging you can make up to 8% profit per loop with low risk and is the preferred method if you compare the returns with the risk versus the other methods and other markets.
Miners provide bookkeeping services to the coin network. Mining is essentially 24/7 computer accounting called ‘verifying transactions’. Miners get rewarded for these accounting services by receiving fractions of coins.
There are two ways to make money out of Blockchain Mining:
1. You buy and manage the hardware (mining computers) yourself.
2. You invest in a cloud mining company and they manage everything for you.
Option 1, buying the hardware, has obviously an initial investment with a return on investment between the 6 to 12 months depending on which coin you mine. It is more profitable in the long term, but requires time and technical knowledge. Option 2 is the easier way with less risks, but also lower monthly returns. Please do your research before choosing any of the options and be aware of the many scams that are currently linked to cloud mining companies.
This is briefly explained with the third arbitraging strategy, Blackbird. You can basically choose between two flavours:
1. Short: Sell now, buy later (expecting to price to go down)
2. Long: Buy now, sell later (expecting the price to go up)
Speculative trading is rather risky compared to arbitraging and mining. It can have potentially higher returns, but you have a chance of losing your money as well. We believe that the returns with arbitraging and mining are currently too profitable to even touch the speculative trading. Occasionally there are no-brainers of which we take advantage, but we tend to keep our portfolio low risk.
ICO Value Investing
Similar to the traditional initial public offering, an initial coin offering (ICO) lets a firm raise capital from multiple sources. Rather than issuing shares of ownership, the offering company sells digital tokens, or “coins”.
This is not a recommendable investment method if you are not willing to do a lot of research. Many ICO’s are currently launched to make a quick buck and there is frankly no need for most of these companies to have their own coin. There are ICO comparing websites online which are a good start. It is nevertheless recommendable to do your own honest research in the company, the team, the product/ service for which the coin is needed, all findable in the whitepaper.
ICO Value Investing is one of the highest risk investments in cryptocurrencies, but can also have the highest returns.
As known by now, Cryptovation.co specialises in cryptocurrency arbitraging. It all started once we saw the arbitraging opportunities and we calculated on paper the profit that could be made. After executing a couple arbitraging opportunities successful, we thought we can make it more efficient. We developed an excel file which calculates the profit for us. The whole process became more efficient, but we still needed to open all the exchanges and source the prices manually. Again we thought that we can do it better and we developed Arbot, of which the Beta version is currently online on our website. It sources the prices automatically from several exchanges and recommends the profitable opportunities. We launched simultaneously with the Arbot our wealth management service and company, officially at the Thailand Investment Fest 2017. The development did not stop there; we again thought we can do it better. Then we developed a cryptocurrency robo-advisory that not only recommends the profitable trading opportunities, but automatically executes it. The robo-advisory is currently in the testing phase and after a successful testing period of three months it will be used in-house for the wealth management service.
You can watch the complete presentation of Cryptovation.co CEO & Founder, Pondet Ananchai, in this link.