Luno is a well-established cryptocurrency platform providing South Africans with a safe and user-friendly way to engage with the growing crypto economy.
This article explores a range of strategies you can utilize on Luno to potentially grow your crypto holdings.
From established methods like buying and holding to innovative approaches like staking and affiliate programs.
It’s more than just an exchange – Luno also offers opportunities to earn money through various strategies.
Let’s take a look ate 10 popular methods:
1. Buy and Hold Cryptocurrencies
The Strategy:The foundation of long-term crypto investing is buying cryptocurrencies when the price is relatively low and holding them with the expectation that their value will increase over time.
Bitcoin and Ethereum are popular choices due to their history and market dominance.
Why It Works:Cryptocurrencies are still a relatively nascent asset class, with the potential for substantial growth.
This strategy thrives on the idea that widespread adoption and increased use cases will push prices upwards in the long run.
Considerations:The cryptocurrency market is famously volatile. Be prepared for fluctuations.
Research is crucial. Choose coins you believe have a solid future, and understand that investment always carries some risk.
2. Luno Savings
The Strategy:Luno Savings functions like a high-yield savings account for crypto. Deposit supported cryptocurrencies (currently Bitcoin, Ethereum, and USDC) and earn interest at rates that are often more appealing than traditional bank accounts.
Why It Works:Luno lends your deposited crypto to borrowers, using the generated interest to pay returns to you. It’s a low-risk option to grow your crypto holdings effortlessly without exposure to price volatility.
Considerations:Interest rates can change, although typically they remain competitive.
You also have to factor in the long-term growth outlook of the coin you are depositing.
3. Day Trading
The Strategy:Day trading involves actively buying and selling cryptocurrencies throughout the day, attempting to profit from short-term price movements.
Traders rely on technical analysis, charts, and market trends to find buying and selling opportunities.
Why It Can Work:The crypto market is highly volatile, creating potential for quick profits if you can correctly predict price shifts.
Considerations:Day trading is incredibly risky. It requires in-depth knowledge of technical analysis, constant monitoring of markets, and the ability to manage emotions.
Most beginners lose money during day trading. Only consider it if you have a significant appetite for risk and the willingness to dedicate time to learning the necessary skills.
4. Recurring Buys
The Strategy:Recurring buys allow you to automate your crypto purchases at predetermined intervals.
Set this up on Luno to buy a fixed amount of your chosen cryptocurrency daily, weekly, or monthly. This implements a technique called dollar-cost averaging.
Why It Works:By spreading out your purchases over time, you reduce the impact of market volatility.
You avoid trying to perfectly time the market and potentially buy into the asset at a less optimal average price over the long term.
Considerations:This approach works best for long-term investors. It’s particularly well-suited for those who believe in the underlying asset and want to accumulate steadily.
5. Staking
The Strategy:Proof-of-Stake (PoS) cryptocurrencies use a consensus mechanism that allows you to earn rewards by “staking” your coins.
It’s like earning interest, but you contribute to the network’s security and earn a portion of the transaction fees.
Why It Works:If you own eligible PoS cryptocurrencies, staking is a way to generate passive income without actively trading.
Rewards vary depending on the coin staked and the length of time it’s staked for.
Considerations:Know that some coins require a minimum amount to be staked and may have lock-up periods preventing you from selling immediately.
6. Price Spread Arbitrage
The Strategy:This advanced strategy involves identifying price differences of the same cryptocurrency across different exchanges, including Luno.
If you find a discrepancy, you could potentially buy low on one exchange and sell high on another, pocketing the difference.
Why It Can Work:Price discrepancies, even small ones, can create temporary profit opportunities for quick-acting traders.
Considerations:Arbitrage is time-sensitive – those price differences disappear rapidly.
It also involves transaction fees on both exchanges, cutting into your profits. It demands high levels of market knowledge and technical proficiency.
7. Luno Affiliate Program
The Strategy:Promote Luno to your network via your unique referral link. If someone signs up through your link and completes specific actions like their first trade, you earn rewards – usually in Bitcoin.
Why It Works:If you have an engaged audience interested in crypto, you can generate passive income by referring others. Luno handles the onboarding; you just spread the word.
Considerations:Success depends on the size of your network and their level of interest in cryptocurrencies. It can work well as a side hustle, but don’t expect it to be a primary income source.
8. Become a Luno Power Trader
The Strategy:As your trading volume on Luno increases, you move through tiered levels. Higher levels may unlock reduced trading fees and potentially additional perks.
Why It Works:Frequent traders benefit from lower fees, effectively increasing their profits. The rewards are based on your actual usage of the platform.
Considerations:This approach suits high-volume traders. Lower levels still have fees, so it’s important to calculate if increased trading would offset these costs.
9. Education Rewards
The Strategy:Luno occasionally offers rewards for completing educational modules about Bitcoin and other cryptocurrencies.
Why it Works:It’s a fantastic way to learn about crypto while potentially earning small rewards
Considerations:Reward programs are not always available, and earnings are generally small. Think of it as a bonus rather than a consistent income stream.
10. External Rewards Programs
The Strategy:Look for third-party programs that reward you for buying crypto on Luno or for other activities.
This might involve cashback on purchases or earning crypto for completing surveys.
Why it Works:Combines crypto investing with potential bonus rewards from sources outside Luno.
Considerations:The availability of these programs can change. Third-party platforms have their own terms and requirements.
