Cryptocurrency is all the rage today with entrepreneurs dabbling into it as a full-time gig or a side hustle. Thanks to the incredible growth of Bitcoin and other cryptocurrencies, they continue to rise in popularity in the digital economy rivaling traditional money in terms of value and efficiency. Though the cryptocurrency industry is still in its early days, there are however many making money with cryptocurrency.
A cryptocurrency is a decentralized payment method that you can use to trade online by way of smart contracts. Even major businesses have started accepting cryptocurrencies as a means of exchange and promotion. Today cryptocurrencies such as Bitcoin, Dogecoin, Ethereum, and others can help you purchase anything from a cup of coffee, burgers, cars, e-commerce products, jewelry, and even insurance.
The 2022 Crypto Industry
Since the creation of Bitcoin in 2008, the cryptocurrency industry has been the subject of uncertainty, boom markets, and hype thanks to the volatile market of cryptocurrencies. But today there are close to 600 cryptocurrency exchanges worldwide within the cryptocurrency market allowing investors to trade bitcoin, Ethereum, and other digital assets. The global cryptocurrency market cap is estimated at $1.28 trillion while the total volume in Decentralized finance (DeFi) is currently $7.30 billion. This not only led to speculating in the cryptocurrency market but also facilitated multimillion-dollar transactions in digital collectibles, digital assets, goods and services to be traded within the cryptocurrency space.
How Much Can You Make with Cryptocurrency?
The amount of money you make with cryptocurrency will depend on what you plan to do with your cryptocurrency and how long you want to invest in it. For example, people who invested in the popular cryptocurrency Bitcoin saw the value of a single bitcoin reach an all-time high in 2021, as its value exceeded over $65,000, however by mid-May 2022 its value had plummeted to $29,549 but still an impressive growth from $196 in October 2013. How much money you can make with cryptocurrencies will depend on how savvy is your investment; how good you are at reading the trends; and a bit of luck. For more insights check out our article on how to accept crypto payments.
10 Ways to Make Money with Cryptocurrency
When it comes to the question of how to make money with cryptocurrency there are several avenues available, below are 10 ways to make money with cryptocurrency.
1. Day Trading Crypto
Day trading in crypto coins is an investment strategy where the business model is based on trading cryptocurrency as a short-term trading strategy. Here crypto assets and trading tokens are bought and sold on the same day. A successful trader will rely on tools and resources to keep track of market trends such as investor optimism, stocks, bonds, and other commodities and currencies. If you do not want to be a full-time trader you might opt for swing trading where you can make investments for a few days or weeks at a time.
2. Lending
You can also make money by opting to lend crypto the same way, banks pay interest on some savings accounts. For offering loans you earn interest from your loans every month or week- depending on the agreement you enter. One variation is a crypto-based savings account, where your crypto keys are lent out to other people who can use the crypto for a certain period of time and in return, the borrower pays you interest on the crypto that you lent them.
3. Crypto Market Mining
Crypto mining entails the core process that keeps the cryptocurrency’s network up and running by helping to solve complex mathematical problems. It is a process where specialized computers, also known as nodes or mining rigs, validate transactions on the blockchain for a specific crypto coin and, in turn, receive a mining reward for their computational efforts. Cryptocurrency mining can be conducted by an individual or organization provided that they have the necessary hardware and software resources to cover the computing power needed.
4. Cryptocurrency Dividends
This is a profit-sharing scheme offered by cryptocurrency companies. By holding a crypto network’s native cryptocurrency, you help keep the system secure and as a reward, you get a share of the profit of the work.
5. Become a Crypto Broker
A cryptocurrency broker is similar to a traditional broker but in this case, a crypto broker acts as an intermediary between the cryptocurrency markets and investors and facilitates the buying and selling of cryptocurrencies. In some cases, a crypto broker may offer derivatives products to traders, where traders can enter contracts to speculate on the price of cryptocurrencies.
6. Making Cryptocurrency
You can also create your own cryptocurrency by building it on an existing blockchain. For example, the Ethereum blockchain offers an easy step-by-step process that you can follow to build your cryptocurrency. Once you created your own crypto all you have to do is bring together a group of people to help promote it and push for its mainstream adoption.
7. Promote Cryptocurrency Exchanges
Cryptocurrencies appreciate value based on their demand and mainstream adoption. As such cryptocurrency networks are willing to reward individuals that create and curate their content.
8. Airdrop
A cryptocurrency airdrop is a marketing method employed by crypto startups to promote the debut of a new cryptocurrency. Here startups offer crypto wallet holders in their platform free coins or tokens either for free or in exchange for a small promotional service. It is important to note that all cryptocurrencies obtained through airdrops are also taxable income for more read our article do you have to pay taxes on cryptocurrency.
9. Buy and Hold
Through the buy and hold strategy investors purchase cryptocurrencies of their choice from a crypto exchange and hold them until prices appreciate to make a significant profit. In some cases, they would even purchase more when prices of the cryptocurrencies drop in a bid to acquire as many crypto coins in anticipation of a future rise in the value of the crypto-coin.
10. Invest in Cryptocurrency Companies
This is a straightforward investment scheme where you can buy stocks of companies that use or own cryptocurrencies and the blockchain that powers them.
How to Make Money with Crypto Tips
Before you start making money with cryptocurrencies you will however need to acquire a cryptocurrency. There are three ways to acquire cryptocurrency: you can open an online account; you can create a crypto wallet to hold your crypto or create new coins for yourself by mining crypto. For example, to buy Bitcoin you will need to deposit money into your crypto account by linking your bank account, authorizing a wire transfer, or even making a payment with a debit or credit card. You can maximize your crypto earnings through the following:
Diversify Your Portfolio: It’s simple, a diversified portfolio increases your potential profits, but it will also lower the risk- sort of not putting all your eggs in one basket. Recent trends indicate that a cryptocurrency price can dramatically go down exposing you to unnecessary risk. Think investing in more than one cryptocurrency.
Be in it for the long term: crypto prices can rise and fall quite dramatically from one day to another. These might cause panic in newbies prompting them into panic selling when prices are low. Cryptocurrencies are not going to go away anytime soon, leaving your money in the crypto space for months or years at a time could offer you good rewards.
Consider Investing in Mining: If you’re knowledgeable about the technology and what it takes to mine popular cryptocurrencies like Bitcoin or Ethereum efficiently can help increase your profits.
Do Your Research: Before investing start by doing your research and investing strategy prudently. A good investment strategy requires you to read whitepapers, and analyze market charts and trends of the cryptocurrency you are investing in. Unfortunately, there is a lot of hype in the cryptocurrency market as well as crypto scams like pump and dump schemes, phishing scams, fraud, and others where scammers steal millions.
Is it easy to make money with crypto?
Yes, you can make money with cryptocurrency. But because of the inherent volatility of the crypto market, there is a degree of risk that comes with cryptocurrencies.
What is the fastest way to make money out of cryptocurrency?
One of the fastest ways to make money out of cryptocurrency is through playing games. The play-to-earn crypto game marketplace is now worth billions of dollars offering plenty of money-making opportunities
How do you make money with crypto daily?
To make money daily through cryptocurrency is to actively engage in day trading. To succeed you will need to at least have a basic understanding of how to analyze cryptocurrency prices to determine whether the cryptocurrency in question is likely to rise or fall in value.
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This article, "How to Make Money with Cryptocurrency" was first published on Small Business Trends
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Samson Haileyesus, Khareem Sudlow
