Token School 4. — What to do with tokens?
There are two things you can do with tokens you have bought…
Once you have acquired the tokens you like, you can do one of two things:
- Hold and receive dividends
- Trade tokens
Hold and receive dividends
There are plenty of successful and profitable ICOs out there. Once the company successfully goes past the ICO stage, its value should start getting higher, as the company itself becomes more trusted and well-established in the marketplace. At the same time, the token’s value will go up as well, enabling investors to gain bigger profits.
Usually, people think that the only way to make money in crypto is to buy tokens when the price is low and sell them when the price rises. However, there are other smart ways to earn money in the crypto space. Dividend paying cryptocurrencies are becoming a dominant, emerging trend because they offer a hint of sustainability and real value.
Dividends provide an income without investors having to touch the underlying capital or asset, which makes them an extremely attractive income option for investors. Dividends can be issued in various forms, such as cash payment, shares of stock or any other form.
Trade tokens
When the token you have bought gets listed on one of the cryptocurrency exchanges, you will be able to trade it. Bitcoin and Ether are going to be the only trading options for quite some time after it gets listed, with other trading pairs being supported later on (if the token is in demand). But keep in mind that some tokens will never get listed.
You will probably need to sit on your investment for a while. Sometimes, a massive loss happens straight away, or you do not see any gain for a long time. And then, a quick and massive spike might happen, which can either mean that the token’s value will keep rising or it could be a one-time event, after which the value of the token might go back to virtually nothing.
Those spikes can happen within just minutes, and you need to be able to catch them. Many exchanges have alerts or “set a stop loss” options, so take full advantage of those.
