Most people get into the cryptocurrency domain to make more money. However, because of its slightly confusing nature, they are not able to do that.
Cryptocurrency has been around for over 10 years and continues to grow rapidly. There are various cryptocurrencies to invest in, from well-known ones to lesser-known ones. You might want to know how to make money with cryptocurrency, as Bitcoin, Ethereum, and other currencies increase in value.
Apart from trading, there are various ways to make good money with these currencies. This article will give you information on how to make legitimate money with these digital assets.
Ways to Make Money with Cryptocurrency
1. Buy and use the HODL strategy.
Buying and holding cryptocurrencies is what most investors rely on. It means buying digital assets such as Bitcoin and Ethereum and holding them till they rise in value.
Cryptocurrencies are known to experience regular price fluctuations. The HODL or ‘Hold on for dear life’ strategy implies buying and holding cryptos indefinitely. You don’t sell it when the markets go down.
It is a long-term approach to investing in cryptocurrencies.
DO REMEMBER: There’s no need to invest in the most expensive cryptos to reap profits. Have a diversity of all coins that you think can have a good future worth.
2. Reap short-term opportunities by trading.
If you aren’t interested in long-term cryptocurrency investing based on the HODL strategy, try trading. This is ideal for banking on short-term opportunities. As you know, the crypto market is extremely volatile.
To become successful in trading, you will need to analyze the market charts, which will facilitate accurate predictions about prices. Take a long or short position as per your predictions so you can make a profit irrespective of the market condition.
3. Get new coins by mining.
Most people who want to know how to make money with cryptocurrency are recommended mining. This method validates cryptocurrency transactions and adds newer data blocks to the blockchain.
It is where a cryptocurrency’s value is generated. When you mine, you are given cryptocurrency as a reward. However, this process requires you to invest in specialized hardware and possess the requisite knowledge.
POINT TO NOTE – If you don’t want to invest in specialized hardware, go for cloud mining services. But remember that its rewards will be lower than mining with specialized hardware.
People also use their computers to mine for cryptocurrency. This is called “crypto farming.” Different cryptocurrencies have different algorithms and mining processes.
For example, to receive a Bitcoin, you must solve a complicated mathematical problem known as a ‘hash.’ If you solve the hash correctly, you will get a certain amount of bitcoin.
4. Do small tasks for cryptocurrency platforms
If you’ve got some time on hand, help cryptocurrency platforms with microtasks. The platforms reward you in exchange for your services.
They offer a wide variety of tasks, such as AdWords viewing, app testing, video watching, and taking surveys, among other things.
To get these tasks, go to sites such as Bituro, Coinbucks, and Bitcoins Rewards.
5. Exchange cryptocurrencies by swapping them
Crypto swapping lets you trade one cryptocurrency for another instantly. Moreover, there’s no need of a crypto-to-fiat exchange.
Many crypto exchanges provide various asset combinations or trading pairs that you can swap within their platforms.
To swap crypto, you can use a wallet, a decentralized exchange, or a centralized exchange.
6. Earn additional coins by staking cryptos.
Crypto staking is an excellent way to earn passive income on your crypto holdings. You can stake the tokens on a network and get rewards for securing and validating transactions.
Users can do it directly from their digital wallets. Ethereum, Cardano, Solana, and Shiba Inu. are some proof-of-stake cryptocurrencies that support staking.
To start staking, validate transactions on your computer. You can use exchanges to stake your tokens or join what is called a “staking pool.”
But this requires you to have knowledge of using crypto wallets to connect the tokens with the pool of the validator.
DO REMEMBER: Crypto staking strategy needs a robust understanding of the intricate workings of blockchain technology.
7. Earn rewards for playing games.
This is a kind of game economy where you play games to earn rewards. The more time you spend playing the game, the more rewards you earn. These can range from digital or real-world currency to in-game items.
All you need to do is complete challenges or tasks in the game, or in some cases, just play the game. This is a great strategy for you to monetize your time and effort spent playing games.
8. Participate in the crypto referral program.
Are you searching how to make money with cryptocurrency in ways that don’t involve much effort? Participating in a crypto referral program is one of these ways. All you have to do is refer others to a cryptocurrency exchange.
In return for your referral, you will earn rewards. The crypto referral program offers a fixed amount of tokens. Alternatively, it offers a portion of the transaction fee that the referred user generates.
Referral programs are run by those wanting to attract more people to their tokens.
9. Earn interest in your cryptos.
Earning interest in crypto assets is a great way to build your investments. You can earn interest on them through staking or lending platforms.
Staking, as you already know, involves locking up digital tokens for validating transactions. Lending cryptocurrency means giving it to another person for interest.
For that, you can use Decentralized Lending platforms, P2P lending, or centralized lending. Earning interest in cryptocurrency requires you to open a crypto account. After that, verify your identity, deposit funds, and expect your funds to start earning you interest.
10. Do arbitrage trading in crypto.
In arbitrage trading, you must buy and sell your asset across platforms the moment you observe a price inefficiency. The major focus here is on crypto assets like Bitcoin and Ethereum.
The decentralized nature of cryptocurrencies makes them vulnerable to price discrepancies across various markets. It will also enable you to become familiar with the emerging decentralized finance ecosystems.
Some important arbitrage trading strategies are cross-exchange arbitrage, spatial arbitrage, and triangular arbitrage.
In the first technique, you buy a token on an exchange at a lower price and sell it on another exchange profitably.
In spatial arbitrage, you try to profit off the price discrepancies on a single asset in multiple regions.
The triangular arbitrage has three parts. You first trade crypto for undervalued crypto on a platform. After that, you sell it for overvalued crypto. In the end, you sell the third token into the initial cryptocurrency position.
Now you know a lot of ways to make money with cryptocurrencies. Understand each of these techniques and find the most suitable one. If you want to learn more about any of these techniques, consult a tradinguidance expert.