Money With Cryptocurrency In [year]: Trading cryptocurrencies is one of the answers to how to make money with cryptocurrency. The daily average volume of cryptocurrency trades is just 1% of the foreign exchange market, but there is a lot of volatility in the crypto market.
Everyone gets into the cryptocurrency field to make money, but not all end up doing that. A lot of people either simply give up along the way, or lose money because they do not properly understand how to make money with cryptocurrency.
The cryptocurrency industry is still in its early stages of development. As the crypto-assets increase in price, more people come into the industry. These newcomers are always trying to figure out how to make money from cryptocurrency.
The good news is there are many ways of making money with cryptocurrency. Since 2011 there has been consistent growth in developer activity, social media activity, and the number of start-ups created in the cryptocurrency industry. Here we take a closer look at how to make money with cryptocurrency.
Three Mechanisms for Making Money with Crypto
If you are wondering how to earn money with cryptocurrency, look no further! Strategies for making money with crypto rely on three mechanisms:
You can invest or trade in the crypto exchange market. You can do this without owning any crypto yourself, like investing in gold on the stock market.
You can use the coin you already own to stake and lend coins to the system or other users.
You can participate in the blockchain system by mining or receiving coin rewards for work done in the system.
Based on these three mechanisms, here are the six strategies for making money with cryptocurrency:
- Staking and Lending
- Crypto Social Media
- Airdrops and Forks
Investing is the long-term strategy of buying and holding crypto assets for some time. Crypto assets are generally well suited to a buy-and-hold strategy. They are extremely volatile in the short term but have tremendous long-term potential for growth.
The investing strategy requires you to identify more stable assets that will be around for the long term. Assets such as Bitcoin and Ethereum have been known to show a long-term price increase and can be considered a safe investment in this regard.
While investing is a long-term endeavor based on the buy-and-hold strategy, trading is meant to exploit short-term opportunities. The crypto market is volatile. This means the prices of assets can increase and decrease in price dramatically over the short term.
To be a successful trader, you need to have the proper analytical and technical skills. You’ll need to analyze market charts on the performance of the listed assets so that you can make accurate predictions about price increases and decreases.
When trading, you can either take a long or short position, depending on whether you expect the price of an asset to rise or fall. This means you can make a profit regardless of whether the crypto market is bullish or bearish.
3. Staking and Lending
Staking is a way of validating crypto transactions. If you are staking, you own coins but you don’t spend them. Instead, you lock the coins in a cryptocurrency wallet. A Proof of Stake network then uses your coins to validate transactions. You receive rewards for doing so. In essence, you are lending coins to the network.
This allows the network to maintain its security and verify transactions. The reward you receive is similar to the interest a bank would pay you for a credit balance. The Proof of Stake algorithm chooses transaction validators based on the number of coins you have committed to stake. This makes it much more energy-efficient than crypto mining and does not require you to own expensive hardware.
4. Crypto Social Media
Multiple blockchain-based social media platforms will reward you for creating and curating content. You are often rewarded with the native coin of the platform.
Cryptocurrency mining is how to earn money with cryptocurrency like the original pioneers. Mining is still a crucial component of the Proof of Work mechanism. It is where the value of a cryptocurrency is generated.
If you mine a cryptocurrency, you are rewarded with new coins. To mine, you need technical expertise and upfront investment in specialized hardware. Running a master node as a subset of mining. It requires expertise and significant upfront and ongoing investment.
6. Airdrops and Forks
Airdrops and free tokens are distributed to generate awareness. An exchange might do an airdrop to create a large user base for a project. Being part of an airdrop can get you a free coin that you can then use to buy things or to invest or trade.
A blockchain forks because of changes or upgrades in a protocol that create new coins. If you hold coins on the original chain, you will typically get free tokens on the new network.
Below are 10 ways to make Money With Cryptocurrency In [year]
Way#1. Buy and HODL
This is the most common way of earning money from cryptocurrencies. Most investors buy coins such as Bitcoin, Litecoin, Ethereum, Ripple, and more and wait until their value rises. Once their market prices rise, they sell at a profit.
This investing strategy requires one to identify more stable and volatile assets that can shift in value rapidly, resulting in regular profits. Assets such as Bitcoin and Ethereum have been known to maintain regular price fluctuations; they can, therefore, be considered a safe investment in this regard. However, you’re welcome to trade any asset you feel is going to rise in value; all you need to do is to analyze each asset you invest in before committing to HODLing it.
Also, you don’t need to buy the most expensive assets for you to make profits. There are thousands of small altcoins that have decent price shifts; consider having a mix of all coins that have a promising future value and are not just popular in the exchanges.
Way#2. Earn Cryptocurrency Dividends
Did you know that you can buy cryptos and hold them for the dividend? Well, there are a number of coins that will get you paid for simply buying and holding digital assets. The best thing about these coins paying a dividend to holders is you don’t even have to stake them, especially in a wallet.
A few examples of coins that pay out dividends include COSS, CEFF, NEO, KUCOIN, and more. Just like the conventional stocks, not all of these coins, are suitable for your portfolio; you’ll need to analyze and pick out what seems to align with your investment objectives.
Way#3. Run Cryptocurrency Master Nodes
These are full nodes that motivate operators of the various nodes to execute their roles in operating a blockchain. In other words, a master node is a cryptocurrency full node or computer wallet that maintains a real-time record of a blockchain’s activities. The idea behind master nodes is a bit technical in nature, but below is a simplified explanation: Running crypto master nodes is one of the most popular ways of earning passive income in this space.
Many cryptocurrencies pay node operators to maintain a real-time record of their activities on their native blockchains. Since the process is complex and requires one to maintain a certain minimum number of coins under their master nodes, crypto platforms prefer outsourcing the service to master node operators at a fee. Examples of proof of stake cryptos that have master nodes include DASH and PIVX.
Way#4. Stake Cryptos
This is another method of earning money from cryptocurrencies; it offers a double earning potential through price appreciation and dividend payout from selected coins for staking (or proof-of-stake) their digital assets. Staking involves holding coins in a live wallet, thus allowing you to earn additional coins for securing that particular crypto network. Some examples of coins that can be staked include NAV Coin, PIVX, Neblio, Decred, and many more.
Way#5. Day Trading
More than 80% of cryptocurrency investors believe that the only effective way to earn money in this space is through day trading. But what most of them don’t know is that day trading is more than just holding an asset until its value rises; it takes a lot to be a day trader, but most importantly, you need to have the proper analytical and technical skills. You’ll need to analyze market charts on the performance of the listed assets; this is perhaps the most involving way of earning from cryptos but I believe one of the most rewarding.
You can start day trading on any exchange today; all you need to do is to sign up, buy some assets, analyze, and you’re all set. You can also start trading through an automatic trading platform like bitcoin profit which allows users to decipher the signals emitted by the trends on bitcoin and other cryptocurrencies and start to perform successful small trader.
Tip: If you’re going to be a day trader, consider mastering the art of analyzing stocks using technical and fundamental methods; they are widely used to evaluate all traded assets.
Way#6. Help Out with Cryptocurrency Microtasks
If you have extra time, you can also do some small tasks for individuals or cryptocurrency platforms and get paid for them. The tasks can widely vary; it could be apps testing, advert viewing, taking surveys, watching videos, and more. You can get microtasks from sites such as Bitcoins Rewards, Coinbucks, or Bituro.
Way#7. Work for Cryptocurrency Companies
This is a common way of earning from the sector. Anyone can work for a cryptocurrency company in any capacity; you can be a digital marketer, content creator, or web designer, among other things. All you have to do is to identify their needs and show them how your skills can help solve a problem.
The best thing about working for crypto platforms is that you’re likely to work remotely, allowing you to benefit from the flexibility of working from your own space. Other than that, most crypto firms offer very competitive packages, and if you happen to come by a chance to work with any legit ones, don’t hesitate to take up the opportunity.
Below are a few examples of platforms that pay in digital assets for services rendered:
These companies offer their compensation in terms of cryptos; this, therefore, means that the value of your earnings can more than double in value within days if not hours.
Way#8. Crypto Arbitrage
The cryptocurrency sector is largely unregulated; this has resulted in a lot of variations in terms of asset valuation, pricing of products, and so on. Most exchanges decide for themselves the prices their assets at are listed, and this has brought avoided the difference in the volatility and liquidity of assets. If well-researched, one can make a kill from these price variations by buying from cheap sources and selling on overpriced exchanges. This is pretty much what describes arbitrage.
If you get your act together, you can find anything between 5% – 30% in price spreads across various exchanges. Consider signing up on various platforms and comparing asset prices to find any meaningful variations to capitalize on.
Way#9. Cryptocurrency Faucets
Crypto faucets are not that popular, but a very viable means of income generating. Bitcoin faucets are the most popular ones and they are basically a reward system that runs in the form of a website or application that offers rewards to qualified users in form of a Satoshi. A Satoshi is a hundredth of a millionth BTC; a reward awarded for completing a task such as capture or any other as may be required by the application or website.
The tasks may also be in form of fun activities such as playing games, watching videos, and viewing certain ads. Each task that’s accomplished earns you a small portion of Bitcoin. You may need to complete quite a number of tasks to be able to make any tangible income from cryptocurrency faucets.
Way#10. Incorporate cryptocurrency as one of your payment methods
If you’re a merchant, you stand a chance of earning handsomely from accepting crypto payments. Statistics show that some cryptos have risen in market value within a day by 1000s in percentage increase, and very few investments make it to 100% in years.
All you need to do is to identify the best channel for accepting crypto payments; here are a few to get you started:
Check Also: 2 Smart And Secret Types of Blockchain
Frequently Asked Questions (FAQs)
Which crypto will grow most in 2023?
Lucky Block – An exciting crypto-based sportsbook and casino.
What is a good strategy for investing in crypto?
Dollar-cost averaging (DCA) is one of the most popular cryptocurrency investment strategies. With DCA, you can invest in increments at regular intervals, just like SIPs. It reduces the impact of volatility by averaging the purchase price of the crypto. It takes away the burden of trying to time the market.
What is the best time to trade cryptocurrency?
Cryptocurrencies are most commonly traded between 8am to 4pm in local time. While the crypto market is 24/7, your trades are more likely to be executed when there is the highest level of activity. Outside of these hours, when trading is lighter, it can be more difficult to open and close trades.
When to sell crypto profits?
There are no firm rules on when you shouldn’t sell crypto. The most important thing to remember here is that you shouldn’t panic-sell because the price has dropped. If you still think it has long-term value, hang on to it. Panic-selling is a decision that many crypto investors later regret.