6 Ways to Put Your Money to Work During Christmas

After a year as busy and eventful as 2022, it is important to relax and unwind over the holiday season. With Christmas only a few days away, we’re spending more and more time buying last-minute Christmas presents and beginning to prepare for Christmas dinner.

However, most full-time crypto traders will likely feel a certain FOMO just by taking a few days off. With a little bit of planning and a few of the strategies discussed below, we can enjoy a worry-free Christmas while our coins do the work.

Let’s dive into some ways of putting our portfolios to work.

1. HODL!

HODLing is one of the best ways to spend the Christmas period. In fact, HODLing works best when you do it all throughout the year! As with any other investment, crypto has a history of going up in value over longer periods of time. This does not magically change over Christmas, so why would you change your approach? If you have been HODLing throughout the year, your best bet is to simply continue doing so.

2. Staking

If you want to add a level of returns to your HODL portfolio, many cryptocurrencies these days can be staked. Staking allows you to earn passive income by participating in the network’s transaction validation mechanism. In return for your contribution to the performance of the network, you are rewarded with a share of transaction fees and block rewards.

There are different ways to stake your crypto, ranging from easy to reasonably difficult. You could set the whole staking thing up yourself, or you can make it as easy by staking on any major centralized exchange that offers those services. But remember — not your keys, not your coins.

3. Mining

If you’re more of a proof-of-work kind of person, you might be more inclined to put your money to work in a mining setup. Cryptocurrency mining is a more complicated process to set-up than staking; through mining, you add computing power to the blockchain network in exchange for transaction fees.

4. Lending

Lending is usually done on centralized exchanges, but there are also several decentralized platforms for lending. Decide which crypto you want to lend out, find the platform you want to use as a middleman between you and the borrower, and collect those interest payments.

With crypto lending on centralized platforms, the liquidation engine should make sure that a borrower will be able to repay their debts. However, make sure to do your own research to choose a platform, and make sure that you understand all of the risks involved.

5. Bot Trading

Bot trading is another addition to the different ways that crypto traders can make their coins work during the holiday season. With bot trading, you use automated strategies and algorithms to automatically make trading decisions based on predetermined inputs. Essentially, you can teach a bot to trade within the rules and parameters of your trading system, and it will execute these rules more clinically than any human ever will.

Opponents of bot trading say that this type of trading is dangerous, as markets evolve over time and require new strategies; but for shorter breaks, bot trading could be a way to keep your portfolio active without paying close attention. There are different kinds of bots, from simple trading grids and DCA bots to complicated trend following systems. Set up the trading bot, and it will make trades (literally) as you sleep.

In robotized trading, it is crucial to exercise risk management. Not only should you make sure that you use the right settings for the robot (it will do what you tell it to, even if that will cost you dearly), but you should also limit your risk per trade, and limit the total capital you allocate to a single trading strategy. For example, you can choose to only allocate 2% of your money to a certain robot.

6. Copy Trading

Finally, copy trading is a trading approach that is gaining a lot of popularity in financial markets. Copy trading platforms allow you to copy the trades of other traders, in real-time. This allows novice traders to take advantage of the skills of professional traders who use complex strategies to generate significant profits.

It is important to do your research before going into copy trading, as some traders offer copy trading services even when they are not profitable. Make sure you understand the trading system a trader is advertising so that you can understand why a trader might hold a position even if it goes underwater for a while.

Another way of increasing your chances of success is by copying multiple successful traders with different trading systems. After all, diversification makes you less dependent on market conditions.

Closing Thoughts

There are many different ways of putting your money to work during Christmas. In fact, these approaches work at any time of the year, so feel free to come back to this article whenever you book your next holiday!

Nevertheless, all these strategies are risky and could result in you losing all of your money. Exercise risk management and do your proper research before making any investment decision.

For now, it is time to rest, and enjoy a fantastic holiday season. Go visit your family, hang out with your friends, or visit any local community event to mingle with other people! No matter what, share the holiday spirit with someone else.

You can return to the markets in the new year. It will not disappear, I promise.

Merry Christmas, and I wish you a fantastic, profitable 2023.

Writer’s Disclaimer: This article is based on my limited knowledge and experience. It has been written for educational purposes. It should not be construed as advice in any shape or form.