How to Make Profit From Cryptocurrency Bubble in 2021

“A decade from now, it will be common to use cryptocurrencies in everyday life.” The recent rise of cryptocurrency has been dramatic, and it’s created a lot of questions about its true value. Most experts agree that we’re not at the beginning of a crypto bubble but the beginning of a bull market. 


Once people feel comfortable investing, the price of Bitcoin and its peers will likely keep rising, possibly to ludicrous levels. While most investors might sit on the sidelines for a few years, smart investors will look for the best opportunities before the bubble pops. 

If you have a tolerance for risk and are willing to play the long game, then you could be on to something big. Here are a few ways you could profit from the crypto bubble:


Invest in digital assets as they first go mainstream.


Investing in the top digital currencies at the start of 2018 would have been a really risky move. Back then, Bitcoin was selling for less than $8,000. 

Ethereum was hovering at about $130. After initially diving into concerns that cryptocurrencies were a bubble waiting to pop, Bitcoin gradually recovered, and Ethereum has followed the path of Bitcoin. Currently, both are selling at more than $1,500.



Today, both cryptocurrencies are still far below their all-time highs, and they’re still relatively expensive. But their respective share prices indicate that demand is increasing. 

For instance, Ethereum is trading at about 20 times its recent peak price. By comparison, Bitcoin has surged over 500 percent since early 2018.



By going long when prices are cheap, you’ll also be taking advantage of a potential pop. More people will be exposed to cryptocurrencies when they’re first sold in person at crypto exchanges and by text. 

Now that institutional investors are getting involved, the hype will be reaching fever pitch. If prices go up dramatically as a result, then you’ll still have the opportunity to go long at lower prices.



Sell when you see the bubble bursting.


If you want to see the value of digital assets rise again, then you might want to sell when the bubble bursts. Once people finally stop buying up cryptocurrencies, their prices will inevitably go down. 

Sure, a lot of money has been made, and a lot of crypto coins will end up worth a lot of money. But eventually, all of this new money will dry up. 

When prices go back down, a large number of traders who had bought in at sky-high prices will be looking for an exit. And they’ll be looking for the bottom.



That’s where you come in. If you wait until the bottom, you’ll miss out on a tremendous opportunity to make money. It’s only a matter of time until the cryptocurrencies crash again, and prices will continue to drop as more people go back to more familiar assets. 



But there’s also a good chance that prices will bounce back in a big way. That could happen in the next few years. At the same time, high-end investors, such as wealthy families or well-funded start-ups, will be looking for ways to invest their money and will be looking to get in on the next crypto boom.


Get in early and reap the rewards.


There’s only one way to guarantee that you’ll get in on the boom and will be able to profit from it. That’s to buy in as soon as prices start falling. But if you’re hesitant to bet on a crash, then you might as well consider all of the other options. For instance, you could also consider long positions in the bitcoin exchange-traded fund, or ETF. 



Most of these ETFs were created to track the performance of the market. You’ll be putting your money in one of the digital currencies that has performed best, and if you do that now, then you’ll be well on your way to making a profit.


Choose your crypto investments carefully


The market for cryptocurrencies is still in its early stages. The prices of most digital currencies will continue to go up, and will probably keep going up for the next couple of years. But don’t put all of your eggs in one basket. 

Don’t go all-in on the cryptocurrency market. Instead, think about a diversified approach that will allow you to benefit when the market takes off.



The Motley Fool has a disclosure policy.


The Motley Fool is a USA TODAY content partner offering financial news, analysis and commentary designed to help people take control of their financial lives. Its content is produced independently of USA TODAY.


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