Cryptocurrencies are digital, virtual currencies that run on blockchain technology. Purchases can be made with cryptocurrencies, just as they can with fiat currency. On the other hand, cryptocurrency transactions are carried out in a decentralized system, which means that the transactions are not overseen by a central authority. Some of the most popular cryptocurrencies are Bitcoin (BTC), Ethereum (ETH), Ripple (XRP), Litecoin (LTC), etc.
Cryptocurrencies have begun to be used for a wide range of purposes, with the majority of them proving to be helpful and profitable. Many international companies, including Starbucks, and Microsoft, now accept cryptocurrencies as payment, and the merging of the crypto world with the real world has led to increased investment. The majority of the world has heard about cryptocurrencies either through big companies or small individuals investing and moving far. However, there is a level of skepticism around cryptocurrencies such as their volatility and whether the investment will be worth it.
With a total market capitalization exceeding $2 trillion, in this article, we will provide you with 8 no-brainer ways to make money with cryptocurrency while taking into consideration the good and bad aspects of crypto.
1. Put Your Money to Work and HODL
This is by far the most common way to make money with cryptocurrencies. The majority of investors buy Bitcoin, Litecoin, Ethereum, Ripple, and other cryptocurrencies to hold them until their value rises. When market prices rise, they sell for a profit. In cryptography, the abbreviation HODL stands for “hold.” Some people now refer to themselves as “HODLers,” which stands for “Hold On for Dear Life.” This catchphrase is used to urge people to keep their cryptos even when the market is volatile.
Even though it originated as an amusing internet meme and is surrounded by a funny story, the concept of HODLing cryptocurrencies is the most common strategy to make money with crypto. This method of investing necessitates the discovery of more stable and volatile assets that can move in value swiftly and produce consistent rewards. Bitcoin and Ethereum, for example, have been known to see regular price fluctuations and hence can be considered a safe investment to make money. Or you can pay attention and evaluate other crypto coins before committing to HODLing it.
The HODLer strategy is also excellent for those who would rather invest in a cryptocurrency and observe it over time rather than trade regularly.
Read more: Top 8 Cryptocurrencies to Invest in 2021
2. Earn Passive Income by Staking Crypto
Earning a passive income through crypto can be done by staking crypto, which is essentially an alternative to mining. Proof of Stake networks provide assistance to maintain the decentralized blockchain functions with the help of stakers. Some coins that use proof of stake are Tezos, Cosmos, and Cardano. As a staker in PoS networks, you are helping in securing the blockchain and earning with staking rewards in-kind of the coin or token of your choice. As opposed to Proof of Work, Proof of Stake requires less electrical energy and encourages decentralization of the network.
3. Day Trading Cryptocurrency
Day trading is deemed by the majority of people as one of the most effective ways to earn money with cryptocurrency. However to successfully day trade, one must have an excellent understanding of the crypto market and the acquired experience. Careful analysis of volume, price action, chart patterns, market cap, and other technical indicators are crucial for day trading. Day trading is also related to thinking fast and making quick decisions so it can be anxious and stressful for some people. Starting with day trading can be done by doing your research properly and considering which trading suits your investment goals and personality best.
Check out some of the differences between trading vs investing here.
4. Incorporate Cryptocurrency as one of Your Payment Methods
Accepting cryptocurrency payments if you have your own business or sell products and services can provide a way for you to earn more money. Essentially you will need 3 primary things: clients or customers who are willing to pay for the products/services of your company through cryptocurrency, a digital wallet for costumers or clients to transfer the coin through the blockchain, and some knowledge of exchanging the price of your products/services to the equivalent amount of a coin such as Ethereum or Bitcoin. In this manner, clients or customers that pay you in crypto, can either pay your employees or as mentioned above HODL until it rises its price in value.
5. Work for Cryptocurrency Companies
Working for a cryptocurrency company you can make quite an income by providing content, promoting their products through social media management. If you are a developer or a designer and social media manager, many companies work with crypto and most of them allow freelance work and working remotely, with either traditional salary or even offering to pay for your services in crypto coins.
6. Crypto Arbitrage
Crypto arbitrage has been seen by many traders as an efficient way to maximize their gains. In other words, if the price of coin x differs on two different exchanges, a trader can buy the coin for less, on one platform and sell it for slightly more on the other. Market inefficiencies in crypto are way more common than fiat currencies, which is evident in the uncorrelated pricing of crypto coins. Traders that use arbitraging are aware of these uncorrelated pricings on cryptocurrency exchange sector functions, therefore they can profit at a higher rate.
7. Crypto Faucets
Is there a thing such as free crypto? Well technically yes, through apps or websites that reward you with a tiny amount of coins for completing tasks. They are called faucets due to the rewards being small like drops of water from a leaking faucet. The technical meaning of it can be similar to rewarding you in Satoshis – the smallest unit of the Bitcoin cryptocurrency named after the creator of Bitcoin, Satoshi Nakamoto. Through crypto faucets, one can also earn Ether, through an Ethereum faucet which rewards users for solving captchas, play games, browser mining, etc.
8. Create Cryptocurrency Content
Creating content is one of the ways to efficiently communicate any message worldwide to current or potential clients. Content can be writing articles, creating videos, infographics, posters, blogging, etc. Every time a new non-fungible token or a new coin is created, the best way to promote it is by creating content that will reach thousands of people to a million. This is where you can possibly implement your abilities as a content creator working for different companies that might need those services.
- To invest and make a passive income through cryptocurrencies is possible and accompanied by its risks, which can be mitigated by thorough research and technical analysis.
- One can invest their money into the coin or token of their choice and HODL, the crypto term for keeping your coins no matter the market drop or rise.
- You can earn money as a validator in Proof of Stake networks in cryptocurrencies.
- If you have a business or provide different services, registering a digital wallet and accepting cryptocurrency payments may cause you to profit long-term.
- Performing cryptocurrency microtasks such as watching ads and keeping up with Cryptocurrency Faucets may provide micro gains in coins and tokens of your choice.
- With the right knowledge and ability to risk your investments, you can profit from market instabilities during coin exchange platforms so you are allowed to arbitrage between one coin to the other for long-term profits.
- Creating informative videos or writing blogs for a cryptocurrency firm may provide a source of income in either fiat currency or crypto coins.