How To Make Money With Cryptocurrency - 14 Best Ways To Earn Money
So you want to make money with cryptocurrency? I mean who wouldn’t? It is one of the hottest and most trending investment you can make. We have all heard stories of people becoming millionaires overnight due to the massive price swings of bitcoin and other altcoins.
The price swings also mean volatility and risk. If you are not careful with your crypto investment, you could go bankrupt easily. This is why we are writing this guide to help you make the most out of your investment.
Cryptocurrency As A Form Of Investment
The returns from cryptocurrency are far higher than any other form of investment. They offer far more security than other assets. Cryptocurrencies are powered by the blockchain that makes the transactions in it immutable, permanent, and transparent.
All of these ensure there are no double-spending or chargeback frauds with crypto. Moreover, the supply of the crypto is limited and hence their value will inherently increase over time.
Transactions are fast and reliable with crypto. Bitcoin transactions take a few minutes to process, but the cryptos introduced after it such as ripple, nano, etc. offer lightning-fast transactions that take only a few seconds.
Cryptocurrencies enter the market by launching initial coin offerings (ICO). They help the developers or the companies to fund their operations and also offer a chance for investors to get their token at a very cheap price. They can then sell these tokens later at a high price once users start buying and selling it.
Unlike fiats, which are controlled, regulated, and, monitored by the government, crypto is free from such control. It allows you to complete freedom empowering your ownership rights.
If all these reasons don’t convince you that crypto is one of the best investments you can make, consider this then: For example, you bought $10 worth of bitcoin in early January 2011, your returns would amount to nearly $300,000 today!
How To Make Money With Cryptocurrency
We have established how profitable and fruitful crypto ownership can be. But how can you make crypto a reliable source of income?
There are many ways of doing so, and we describe the various ways you can earn from crypto:
# Buy And Hold (HODL)
This is by far, the most common, profitable, and easy way of making money from cryptocurrencies. All it involves is buying a coin at a low price and holding on to it until its price rises and then selling it for a profit. It is as simple as that.
Most buyers purchase common cryptocurrencies such as Bitcoin, Ethereum, Ripple, Litecoin, etc. These coins have had ups and downs but they have proven the test of time by steadily increasing in value.
You are not just limited to large market cap coins. In fact, you can invest in cryptos that have solid use-cases. Also, you have to research the coin thoroughly by going through their whitepaper, the team behind it, check their community, social media, and check if their code is open source.
ICO’s can either prove to be a high-return investment or a total disaster. You can buy super cheap ICOs and if they increase in value, your returns will multiply. However, for beginners, we recommend sticking to bitcoin and major altcoins. The profits may not be that high, but they are stable and secure.
On the other hand, the easiest way to buy cryptocurrencies is through a crypto exchange. This is where the majority of the crypto transactions take place. Our How and where to buy cryptocurrencies article should help you investing in crypto easily.
You need a reliable wallet to hold on to your investments securely. We recommend using a hardware wallet in combination with your exchange wallet for maximum security. A hardware wallet stays offline (except when you need to transfer crypto) so it is safe from any online attacks.
Furthermore, the returns from crypto investments are too good to be ignored. It has outperformed any asset over the last 10 years. So if money-making from crypto is your wish, then HODLing crypto should be your number one priority.
# Trading Cryptocurrency
The option is viable for those who have some experience in the financial markets, and understand how it works. Beginners don’t need to despair as with practice, they can start trading crypto too.
The premise of trading involves buying low and selling high over a short period of time. Unlike investing, which requires patience and capital, trading is done on a short-term basis and aiming for smaller profits.
In a nutshell, trading is for those starting with low capital, looking for quick gains, and undertaking risks in general.
You have to put more effort into studying the market to find suitable buying opportunities. Trading, in general, is very risky, and when you add crypto the mix, the volatility meter goes through the roof.
Even riskier is when you are trading with leverage, i.e. margin trading. Along with risks, you need to be well equipped with the fundamentals of trading. Whatever crypto you are interested to trade in, you need to do some technical analysis to understand and predict the price movement of the underlying asset.
Also, this involves studying its chart, finding patterns, determining the support, and resistance levels. Don’t ignore fundamental analysis as combining both will ensure the best analysis possible.
These ensure you find the optimal entry and exit points. Nobody can accurately predict the bottom and the top accurately every time. And, it is the beauty of crypto; no single person or entity can control the market or influence it significantly. It’s all about the supply and demand of the crypto.
If you are a beginner and all of these seem too technical for you, try social trading to copy top traders positions and portfolio. And it never hurts to learn to trade anyway. For your effort, you will be able to trade efficiently by yourself.
Moreover, you can either trade through an exchange or through a cryptocurrency broker. Each has advantages and disadvantages. You will find more liquidity and users in exchanges while brokers offer tighter spreads and lower fees.
Exchanges allow you to keep the assets while you trade them, but brokers don’t offer you real crypto. Instead, you purchase contracts known as CFDs that mimic the price movement of the underlying asset.
Another advantage of exchanges is you have the option for decentralized exchanges that operate completely on the blockchain, and involves no middleman allowing privacy.
Leverage or margin trading involves opening large positions using a fraction of the total amount. The rest is loaned out by the broker. For example, if you open a trade with 10x leverage worth $1000, $900 will be lent to you by the broker and you just have to pay $100 from your side.
If the trade goes in your favour, your profits are multiplied 10x and similarly, you would a face 10x loss if you guess the market wrongly. Therefore, we recommend beginner traders to not touch margin trading at all.
With trading, it is always wise to start with a low amount and gradually increase it once you gain trading skills and confidence. Is summary, trading crypto is the fastest and yet the riskiest way to earn money from crypto.
# Crypto Dividends
Another way of earning crypto by holding is through dividend payments. Not all crypto offer dividends; only a handful crypto offer dividends to the owners of those cryptos. Crypto dividends are labelled as ‘the future of passive income’.
A few examples of crypto that pays investors dividends are KuCoin, BitMax, Bibox token, and NEO.
# Staking Cryptos
Stalking crypto is a reliable opportunity for earning from this digital currency. Mainly, staking is the act of holding crypto in a live wallet 24/7, making you eligible for dividends as rewards. It is similar to the previous method of receiving dividends but there is a slight difference.
By holding the coins 24/7 live, you are securing the blockchain network of that coin. Also, it is labelled as a proof-of-stake (POS) and was developed as an alternative to bitcoin’s (POW) algorithm that consumes a lot of energy and power through mining.
The users who stake their coins to secure the network are called forgers. By staking their coins, they create a random block. It is outside the scope of this article to explain show staking works completely.
All you have to know is holding these coins in live wallets rewards you. Examples of such cryptos include Tron, VeChain, Tezos, TomoChain, etc.
# Crypto Mining
Cryptocurrencies that are based on proof-of-work (POW) can be mined. Mining is the process of verifying and adding transactions to the blockchain by solving complex mathematical problems with the help of mining rigs.
These mining rigs use vast amounts of electricity to run and are upwards of 2500W. Mining might seem daunting at first, but it’s all about investing in a mining rig and connecting it to your wallet.
The rig is a one-time investment, however. You have to pay for the monthly electricity to run these rigs and additional maintenance costs such as cooling the rigs.
So is mining profitable? The answer is yes or no.
It depends on your situation. The supply of mining rigs is minimal. If you cannot buy it from the official store, the aftermarket price will drain a hole in your wallet. For example, the Antminer S17 Pro sold out within 5 minutes of launch. The second-hand markets sold if for thousands of dollars more.
Next comes the cost of electricity. If the cost of electricity will surpass the returns from mining the crypto, then mining is a bad idea. At the same time, if the government subsidizes electricity or you are from one of those countries where electricity is cheap, then you can consider crypto mining as a way to generate income.
The general answer it’s not as profitable as it used to be but still remains a viable option for many.
Arbitrage is a strategy that profits from the differences between the exchange rates of various crypto exchanges. Not all exchanges have the same price listing as there is no central authority to dictate and control the price.
Exchanges set the price depending on the number of users using their platform and the volume of transaction it undergoes. Higher the volume, the more competitive the price is. This is why you see bigger exchanges with lower prices than the smaller exchanges.
So the technique here is to buy crypto from the exchange that sets the lower price and sell it on the exchange which lists it higher. If you are careful with the spreads and fees, you should be able to gain steady profits from arbitrage.
# Lending Cryptocurrencies
Lending cryptocurrencies is another passive way of generating income from crypto investments. If you are one of those who like to hold and accumulate crypto in their wallets for long periods of time, you can consider lending as an additional income source.
Through a lending exchange that mediates the transaction, you can lend your resting crypto to a borrower. The borrower pays regular interest on the amount lent to you and the exchange charges a fee for the entire ordeal.
You can expect anywhere between 10%-15% returns using this method. One piece of advice would be to go for a regulated lending platform or else your investment might be a risk. If the platform is insured, your investment would be secured in the event of a disaster.
# Cryptocurrency Faucets
Cryptocurrency faucets are a way to reward users with small crypto quantities in exchange for performing some basic tasks such as solving captchas, playing games, clicking ads, watching videos, etc.
Bitcoin faucets are quite popular and widely used but other cryptos’ faucets are also available. The returns from faucets are quite low but the tasks to be performed are quite easy too. So it’s a low-effort low-reward method.
Other methods Of Making Money In Cryptocurrency
With cryptocurrencies, the earning potential and earning methods are limitless. There are so many ways of earning crypto. We will include some popular ones here:
• Cryptocurrency Blogs:
If you have good knowledge of crypto and love writing, then you can consider writing for blogs that pay you in crypto. An example of such a blog would be Steemit, which is quite popular.
• Accept Payment In Crypto:
If you sell goods and services, you can accept your payment in crypto instead of fiat. Although you are not directly earning from this, you can sell the crypto when it appreciates in value.
• Micro Tasks:
These tasks are similar to faucets but here, you will be doing tasks like app testing, debugging, filling surveys in exchange for crypto payments. The tasks don’t take much time (10 minutes) and pay less than a dollar in crypto.
• Affiliate Marketing:
If you affiliate marketing for Amazon, or for your own website, you can ask the payouts to be made in crypto. If you earn a decent chunk of money through this marketing, then you can easily accumulate crypto this way.
• Crypto Trading Robots:
Crypto robots are software programs that trade crypto on your behalf on the basis of certain algorithms set by the programmer. If you are new to crypto or simply don’t have the time to monitor the trading market, a reliable crypto bot will do all the legwork for you.
• Hosting A Masternode:
A masternode is nothing but a computer that maintains an entire copy of the blockchain of a cryptocurrency and updates it in real-time. In exchange, you get paid in that cryptocurrency. If you are skilled in setting up servers, this job is for you.
The crypto industry can still be considered in a maturing stage. It’s been 10 years since the first cryptocurrency, bitcoin was launched. Since then, it has come a long way and has a long way to go.
Since cryptocurrencies operate on the blockchain and are digital assets, many still don’t regard it as a form of money. It provides tremendous benefits as people are slowly starting to delve into it.
Hence, the opportunities for making money with cryptocurrencies are endless. Investing and trading seem to be the two most popular ways of earning from crypto. We have also listed the other conventional and non-conventional methods of earning from crypto.
It is not difficult to make money in this sector. You can join today and start earning the future currency of the masses.