How to Make Money with Crypto?
Cryptocurrencies continue to grow in popularity with each passing year. Those who invested money in some coins like bitcoin in the early days may not even need to make money any more, as they have increased in value many times over. And the lucky ones have made millions of dollars from the difference in exchange rates.
But the opportunity to earn money from cryptocurrency has not gone anywhere – it is still there today.
We will tell you about the ways to make money with cryptocurrency by investing, trading, staking and much more.
But before we continue, we would like to recommend you a great website – https://wiex.io, that allows you to easily buy and sell various cryptocurrencies while maintaining maximum security and anonymity.
Investing
Cryptocurrency investment is attractive due to its decentralized nature and accessibility, but it has certain risks, the main one being high volatility. Coin prices may fluctuate dramatically, leading to large losses or, on the contrary, huge profits.
Before investing in this or that asset, it is necessary to study the situation on the market thoroughly and, preferably, to get detailed information about this or that coin. Everything will come in handy: from the history of its creation to the opinion of professional investors with a good reputation. You may invest both in a particular currency, buying its native coins, and in index funds.
Lending
There is a very good way of making money with cryptocurrency if you already have it – lending. It works the same way as lending regular money: one person lends altcoins to another in exchange for interest.
There are several types of lending platforms. These include decentralized lending platforms (DLP), centralized and peer-to-peer (P2P) lending platforms, and many more. Each service offers its own terms and conditions, which may be found directly on the company’s website.
Trading
Buy for less, sell for more – these are elementary rules in an extremely complex game. In general, making money by trading crypto is no different from trading any other assets, except for the crazy jumps. With crypto trading, it is possible to get over 1000% profit in a matter of hours if you are lucky.
To start trading, you need to register with one of the exchanges:
- Binance;
- Coinbase;
- Huobi Global;
- FTX;
- Kraken.
It is important to note that the income depends primarily on the user. But there might be bad luck and the currency can lose a lot of value, but such situations are often predictable.
Mining
Mining is a very important part of the Proof of Work system and one of the oldest ways to make money from cryptocurrency.
Mining is the process of verifying transactions and securing the network. For performing these functions, users, commonly referred to as “miners” are rewarded with coins.
Making money from mining is much harder now than it was in the beginning. But it is still possible with careful planning. You’ll also need a lot of powerful GPUs or special equipment in the form of ASICs. All of this costs a lot of money. The amount may easily exceed tens of thousands of US dollars.
And then there is cloud mining. In this case, you do not have to buy anything, and the extraction is done with the help of remote computing power. On the other hand, there is a high risk of encountering scammers or becoming a victim of hacking and subsequent data leaks.
Staking
Staking is an alternative to mining. The essence of staking is to store coins and block them on the account. This way of how to make money with cryptocurrency can be compared to depositing in a bank.
It should be noted that not all coins are suitable for staking. Only those that have a PoS algorithm can be used. These include:
- ETH 2.0;
- ADA;
- SOL;
- XTZ and others.
How does it work? When the coins are blocked in the owner’s purse, they help to mine new blocks and speed up the operations of other users in the network. For this contribution, the user receives his reward.
The main advantage of staking is that, unlike mining, you don’t need to buy expensive equipment. You just need to store the coins in a safe place and wait. The downside is that coins can lose a lot of value because cryptocurrencies are volatile.
Traditional Buy and Hold
The essence of this approach is very simple. You just have to buy cryptocurrency and forget about it for a long time. Usually it is months or even years. At the end, you might sell the digital assets that have grown during this period.
Surely, there are a couple of “buts” here. It is hardly possible to make a lot of money quickly with this method, and losses can be incurred if an unpromising altcoin is chosen.
It is better to buy currency using the “buy the dip” strategy, that is, when tokens sharply decrease in value as a result of some internal or external reason. For example, against the background of crises.
Earning Interest
Earning interest is a way of passively earning coins by giving it to various platforms for interest. (Most often it is DeFi, and it’s called yield farming).
The process of earning with this method varies greatly, depending on conditions and features of a particular platform.
Affiliate Programs
Affiliate programs are initiatives aimed at attracting new users and investors to a particular project or cryptocurrency.
If your speciality is communication with people, affiliate programs can be a great source of income for you. You’ll also need at least a basic knowledge about altcoins and how the market works.
Some of these programs involve paying tokens for creating thematic content on platforms like YouTube, others pay you for distributing links, etc. You can get details either from the exchange that offers these ways to earn money or directly from the creators of currencies.
Dividends
Another interesting way to make money is through dividends.
Dividends are small cash payments to shareholders. If a company makes a profit for a quarter, it is divided among the owners of the company (shareholders) in the form of dividends. Essentially, all you have to do is just buy a few different tokens and hold them for a while.
Nonetheless, it is worth saying that not all cryptocurrencies pay dividends. Of the projects that do, we can highlight NEO, PIVX and Nebilo.
Airdrops
Being in the right place at the right time is what airdrops are. These are free coins distributed by exchanges to promote themselves and expand their user base. Anyone is usually welcome to participate. But there are sometimes exceptions in the form of restrictions placed on participants from certain countries, or mandatory KYC verification.
The distribution of tokens takes place in the form determined by the company launching the project. Typically, this distribution comes with a number of conditions to be met. These include reposting the project or writing a positive comment.
There are many options on how to make money on crypto. We have described the most basic and profitable of them. The choice is in your hands.