Top six ways to make money with cryptocurrency in the bitcoin revolution era
1. Buying and Hodling
The most popular way to make money in crypto
Buying and hodling cryptocurrencies is the most popular way to invest in cryptocurrencies. Many websites and online crypto brokers allow you to buy cryptocurrencies, which you can either leave on the site or transfer to your crypto wallet. Sites like Coinbase, eToro, and Kraken will enable you to purchase cryptocurrencies.
This method is associated with risk, and a little bit of background knowledge is required. You will need a little bit of luck and an investor’s mindset to succeed.
Cryptocurrencies are very volatile, and purchasing them is always risky. Therefore, dollar-cost averaging might be helpful if you are aiming to buy and hold cryptocurrencies.
Dollar-cost averaging (DCA) is an investment strategy in which an investor divides up the total amount to be invested across periodic purchases. The goal is to reduce the impact of volatility on the invested sum.
For example, I buy cryptocurrencies every month regardless of the market and its prices. I buy Bitcoins, Etherium, Ripples, and I’ve started to buy Litecoin as well.
Buy low/ Sell high
Trading cryptocurrencies is another way to make money from cryptos by buying and selling cryptos on a short term basis. The idea sounds simple, buy low, and sell high. However, this method can be difficult and risky if you are not well aware of the cryptocurrency market. Crypto is a very volatile market, and it can vary up to 50% depending on the day and the choices you make.
There is day trading, and there is also leverage trading, which involves borrowing funds and investing more than your actual capital. For example, a 3:1 leverage means you are placing a trade three times higher than your own capital. If the price of the crypto goes up, then you make 3X win. However, if the price drops, your loss is also multiplied by three.
Of course, you can short cryptocurrencies as well. Short selling an asset is an investment strategy to make money from an asset’s price drop.
Shorting works by allowing you to borrow an asset and sell it immediately at its current price. Later on, you purchase the same asset again to repay the person or exchange you borrowed them from. You make money if the price of the asset drops during this time.
3. Investing in ICO & STO
Significant long-term profits
Investing in crypto during the ICO and STO phase can bring significant long-term profits. Nevertheless, do not forget to be very careful and attentive when choosing the path. Many projects are over-hyped, and some ICOs are just a scam. Instead of speculating about the value development of an ICO, read the white papers and pay attention tot he roadmap.
Get advice and read evaluations from independent sources, such as ICO rating platforms and monitor the activities of the project and analyze all the information available carefully. Do not get dragged in by friends or by people you follow on social media and Youtube. Every investment decision needs to be carefully examined and analyzed.
The biggest scam in the crypto world was One Coin. The scam was worth $15 Billion. Read more about it in the following post by Shubh Patni:
Crypto Scam Worth $15 Billion, Shook the Whole Industry
How a Ph.D. fooled the entire world
4. Crypto lending
The power of DeFi
In short, crypto lending allows crypto holders to lend their assets to others and collect interest.
One of the most significant cryptocurrency’s promises is to take the tools provided by the financial institutions and make them available to everyone anywhere. The term of this movement or promise is DeFi, which stands for Decentralized Finance.
Similar to banks’ loans, any person can take a loan with cryptocurrency. Through Defi loans, however, the borrower does not have to disclose their identity to a third party or write checks to a traditional bank.
Nevertheless, the borrower has to put collateral in case of sudden price drops in the cryptocurrency value. This might be challenging due to the extreme volatility of the crypto world.
Many platforms and apps offer crypto lending options. My bank account with crypto options offers crypto lending as an investment.
5. Crypto mining
Solve equations and mathematical problems
Mining might sound strange at first, but the process is basically the verification and adding of crypto transactions to the blockchain. When you offer your computing power to the mining process, you are basically competing with others to solve complex mathematical equations.
Every time a crypto transaction is made, a miner is responsible for authenticating the trade and updating the blockchain. The first miner to crack the code is then able to authorize the transaction. As a reward for their effort, miners receive a small amount of the cryptocurrency.
Mining operations require computers with a specialized set of hardware to compete with others in mining and authorizing crypto transactions. Miners also need to consider the energy costs they require for the mining operation and compare the costs to the value of their crypto earnings.
6. Rewards programs
Crypto for simple tasks
Like cashback from credit card transactions, some crypto platforms offer crypto cashback while online shopping.
Cashback programs enable purchasers to receive a small amount of their money after each purchase. The most common cashback programs are credit card’s cashback programs. When making a transaction with a credit card, the credit card provider can pay back the purchaser a small amount of the transaction because the retailer pays the credit card issuer an interchange fee for the credit card payment.
Crypto cashback apps pay the purchaser a small cut of their earnings from the affiliate link. They receive payment for the referral, and they give a small amount of this payment back to the purchaser in the form of cryptocurrency.
Sources to read more:
1 – Bitcoin Opportunity – Make 100% yield in investment in 200 days