Theoretically, it’s easy to make a profit on Uniswap trading. Just buy coins when the Uniswap price is low and sell them when the price is high. The difference belongs in your pocket. That’s the profit.
Of course, making a profit isn’t as easy as it sounds – especially in the world of cryptocurrency. Market volatility sends the UNI price up and down, rising and falling dramatically with no advance warning and no discernible cause. When you buy Uniswap, last week’s 500 € purchase may be worth 200 € today – or 50 €.
That is one reason it is so difficult to make a profit in spot trading, the investing discipline in which investors make money by timing the market.
Spot traders buy and sell coins according to their hunches, theories, and predictions regarding the rapidly changing Uniswap exchange rate.
UNI value rises to all-time highs and plummets to record lows according to international money market dynamics, speculation about government regulatory changes, tweets from billionaires and celebrities, and many other factors.
Timing the market amid all these influences is extremely difficult. That’s why almost all day traders lose money.
A special case
Uniswap was launched in November 2018 as a full-blown blockchain-based financial ecosystem. Uniswap includes a decentralized cryptocurrency exchange (DEX), a protocol for building decentralized finance (DeFi) apps and other applications, and a cryptocurrency: the Uniswap token, or UNI.
Within the Uniswap ecosystem investors earn returns on transactions by staking crypto to liquidity pools. Hundreds or thousands of crypto wallets, DeFi apps, Web3 tools, DEX aggregators, and other decentralized apps have been built on the Uniswap platform.
Uniswap is implemented as a package of smart contracts and APIs on the Ethereum blockchain, which is the blockchain world’s most widely used foundation for decentralized applications. To boost performance, the protocol supports Ethereum-based level 2 blockchains, including Polygon, Optimism, and Arbitrum.
UNI is the governance token of the Uniswap financial ecosystem. UNI owners vote on new projects, set priorities for ongoing development, and refine the long-term vision of the Uniswap ecosystem. As the protocol grows in popularity, the UNI token gains value.
The growing importance of decentralized apps for DeFi and Web3 applications has made Uniswap and UNI attractive to investors.
Investing in Uniswap
Many investors believe that Uniswap has a bright future in the long term. Even when the crypto market slumps, the need for robust DeFi apps continues to grow.
Against that long-term trend, the Uniswap exchange rate rises and falls hour by hour, day be day, in the short term – sometimes dramatically. This market volatility makes Uniswap spot trading tricky. But it takes place within the context of an overall long-term rising trend.
Of course, this is true of many cryptocurrencies. Values tend to rise and fall along with Bitcoin’s, but the long-term trend is upward.
Learning From the Past
What if you had purchased Uniswap a week or a month ago? If you had purchased 100 € worth of UNI, what would you have now?
Put away your price charts. There’s no need to speculate. The Kriptomat what-if calculator performs the calculations based on data that is refreshed around the clock. The calculator can tell you exactly how much your 100 € investment would be worth at this moment using actual historical price data and exchange rates.
In fact, the calculator can perform the same calculations for any of the 350+ cryptocurrencies on sale at Kriptomat.
The calculator demonstrates that despite the short-term volatility, crypto has generated eye-opening returns for long-term investors.
One good way to take advantage of long-term upward trends is to use the Kriptomat Recurring Buy feature, which lets you set a schedule of regular purchases on a weekly, bi-weekly, or monthly basis. For the price of a daily cup of Starbucks, you can slowly but steadily build up your crypto portfolio in support of long-term goals like purchasing a home, financing your kids’ university education, or living a worry-free retirement.
The Bottom Line
The world is full of day traders who can testify that there is nothing straightforward about predicting short-term high and low prices in the crypto market. The factors influencing the Uniswap exchange rate are too numerous and obscure to track.
This volatility has made life difficult for day traders, to be sure. But its effects shrink in comparison to long-term Uniswap price trends. There is no such thing as a “sure thing” in crypto investing, but many happy Uniswap owners have found success by thinking of their crypto holdings as a long-term investment.
Founded in 2018, Kriptomat revolutionized the cryptocurrency world with the introduction of the simplest platform in Europe. Kriptomat makes digital finance so simple that everybody everywhere can access the freedom, fairness, and fulfillment that crypto represents. Hundreds of thousands of customers across Europe and in 120 countries worldwide trust Kriptomat when they buy, sell, swap, earn, share, and invest in crypto.