Should You Reinvest Your Crypto Gains?

Crypto Gains

Cryptocurrencies are the most lucrative assets in the world right now. However, like any other investment, it has its drawbacks and disadvantages. An example of this is the market’s unpredictability, which is capable of causing serious damage to your portfolio. 

This drawback, however, doesn’t mean that the market is entirely unpredictable – it simply means that sometimes very unexpected things happen in the market that almost no one could have foreseen.

Another drawback of investing in the crypto market is how difficult it is to time the top of a bull run. It’s ridiculously hard to know exactly when to sell your coins and take profits.

What’s even harder is knowing what to do with your profits once you sell. With that said, here’s a look at what you should do with your crypto profits.

Should You Reinvest Your Crypto Gains

While it may seem like a good idea to reinvest your crypto gains, it’s important to note that doing so could put you at risk of losing those gains.

That’s because the crypto market is a lot like a roulette wheel. Sure, you might win on some lucky spins, but if you keep spinning, you’re likely to lose it all, putting yourself at risk of suffering huge financial losses.

What Should You Do With Your Crypto Gains Instead?

It’s easy to be tempted to splurge on expensive cars or other luxury items – but while it might be cool to purchase material items, it’s important to remember that a lot of these items devalue over time.

Instead of putting your crypto profits into depreciating assets, you should consider reinvesting your crypto profits into safer asset classes like stocks as they can offer you an opportunity to increase your capital without incurring as much risk as you would with crypto. You can use platforms like SoFi online trading to reinvest your crypto profits into stocks.

Stocks aren’t the only asset class you can reinvest your profits into, though. There are a few other assets you can invest in – here’s a look at three of them;

How To Reinvest Your Crypto Gains

Below are a few ways you can reinvest your crypto earnings.

Purchase A Rental Property

Like the saying goes, cash flow is king – and rental properties are one of the best cash-flow producing assets in the world.

A rental property can provide you with guaranteed lifetime income, while also granting you an asset that you can sell for a lump sum at any point in your life.

It’s a cheat code to acquiring real wealth – hence you should consider reinvesting your crypto gains in rental properties if you’re looking to turn your gains into more capital.

If you’ve never invested in a rental property before, you’ll find that it can be a bit complicated, however, with enough buying a rental property could be the smartest investment you ever make. 

Purchase Dividend-Paying Stocks

If you don’t want to invest in real estate, dividend-paying stocks can be a good alternative. 

Dividend-paying stocks are stocks that pay a portion of their profits to their shareholders over the course of a fiscal year. 

Investing in dividend-paying stocks can be a safe and consistent way to generate some passive income annually.

Samsung, IBM, Apple, and others are among the corporations that pay you every few months. You might earn money from your stock portfolio monthly if you establish your dividend program properly.

Start A Business

A great way to reinvest your crypto profits would be to start your own business as doing so could offer you an opportunity to make even more money depending on whether or not you’re able to scale your business profitably.

Crypto gains article and permission to publish here provided by Cristina Par. Originally written for Supply Chain Game Changer and published on June 9, 2022.