Day Trading vs Investing - What’s the Best Way to Make Money in The Altcoin Market?

Day Trading vs Investing - What’s the Best Way to Make Money in The Altcoin Market? image

If you’ve just started looking into bitcoins with the hope of investing or trading for profits, you must have come upon the wide range of altcoins now available. Although Bitcoin may be the first cryptocurrency, there are now so many other alternatives that you can either invest in or trade for more profits. While a majority of crypto investors still hold Bitcoins, a majority also trade in other currencies known as altcoins or alternative coins. Basically, this includes any cryptocurrency other than bitcoin.


How do these other cryptocurrencies work? These follow the same basic concepts of bitcoin as a cryptocurrency - their values are dependent on the principles of supply and demand. However, the specifics vary from each cryptocurrency and are best understood by going through the whitepapers before you start investing or trading in.  Just like bitcoin, you have 2 main methods of profiting in this altcoin market, you either participate in day trading or invest in it long term. Now, what is the difference?


What is Day Trading?

Day trading refers to more consistent trading or exchange of coins to make a profit. Compared to investing, it involves a more active management style since day traders need to be aware of any changes in the market within the day. Highly dependent on technical analysis, day traders make use of multiple sets of data presented in graphs, charts and other methods to help them make decisions on when to best exchange their assets. In order to be successful in day trading, one must be highly committed to monitoring and assessing the market.


What is Investing?

Putting up an investment may not need as much an effort as day trading since investing is defined best as buying and holding coins over prolonged periods of time in order to build wealth. This is done when an investor believes that the overall price of a coin will rise in the long run and does not mind the small changes to a coin’s value that occur within a day. It applies a more passive management style since investors do not need to constantly monitor the market. However, they must still be aware of the value of their assets in order for them to trade in at the optimum time to make the most profit out of their investment. Investing focuses more on the altcoin company’s prospects and relies more on a fundamental analysis of the altcoin. 


Should I invest or do day trading?

Knowing the differences between these 2 methods of earning a profit from the altcoin market could help you decide better on what would work best for you. A more in-depth look into the benefits would also make this decision highly dependent on a user’s personality traits, mainly their strengths and other capabilities, and on the nature of the altcoin itself.


Personality Traits

We could not help you decide whether to invest or day trade because this is not an objective decision. Both methods would work best for people with certain personalities and skills. Let’s look at the different traits that you should look at.



When putting up an investment, many would advise you to not think about it too much. It would be difficult for a person to invest “long-term” if they do not have the patience to hold out for the best price. A person planning to invest may unconsciously start to participate in day trading when they are too anxious to make a profit and begin to closely monitor market changes and create exchanges whenever there is a rise in their coin’s value. Now, this may not be investing, but if that person is able to profit and earn well from this practice, should they really stop?


Investing is definitely for people who are more patient, especially since profits could take up to years to gain. This is not to say that day trading is for impatient crypto investors either. Day trading involves a different kind of patience since there is still a need to hold out and wait for the best value of a coin within the day. 




Day traders essentially spend a lot more time checking the crypto market and doing exchanges compared to long-term investors. People who are not able to put in the time to monitor the market and do an exchange at the optimum time may not be able to do well in day trading. Let’s take Max for example. Max works in the office 8 hours a day. He does day trading and, one day, during a meeting, the value of the altcoin that he is trading in spiked up for a few hours but, since he was not able to see this change because he was in a company meeting at the time, he missed out on the opportunity. There are definitely a few day traders who are able to still keep their day jobs while successfully trading their altcoins, this is just to show that people who do not have the time due to other commitments may profit best from investing rather than day trading. 


Comparison of Returns

This isn’t really a personality trait but would rather be identified as a choice of preference. Day traders make much smaller profits consistently as compared to investments that provide larger profits over a much longer period of time. Placing all other factors in consideration asking yourself which would you generally prefer and which method you think would be a better way to earn from your investment could be some of the things to help you make a decision.


Technical Capability

Day trading involves constant exchanges and active management of your coins and, thus, would involve more technical knowledge compared to long-term investing. A person who lacks certain tech skills, may not be able to secure their wallets and, through an active exchange, may make it vulnerable to hacking. Although these skills are easily gained over time and through research. A beginner may fare best to start investing for a while before going into day trading.


The Altcoin(s)

There are many more factors to making money through your altcoins but this would really depend on your skills, strengths, personality traits and personal preferences. What other factors do I mean? The general nature of the altcoin itself would also affect where it would best fit. One thing to note is that day trading would generally involve trading in more than one altcoin. Day traders should be familiar with multiple cryptocurrencies whereas long-term investors need only to concern themselves with the value of their invested coin.


Overall, working with your strengths would most likely yield better results. However, if you feel you’d be able to benefit from both methods, there’s no one stopping you from participating in both investing and day trading. There is no rule against placing some of your cash into crypto investments while also participating in day trading.

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