So you’re interested in getting into crypto and want to turn Bitcoin into cash.
You’ve heard all of the success stories – people making millions of dollars by getting in early and selling when the prices are high. Or perhaps you have friends who make a steady income by mining cryptocurrency.
Bitcoin is the perfect example to prove it.
We know what happened with Bitcoin is something that happens only once in history.
One who had invested 19,000 dollars in Bitcoin – right at the peak of the 2017 bull run – found their investments falling down 75-80%. However, the believers still keep the investments and earn 300% more on their investments after three years.
Since then, lots of people are showing their interest in the crypto market and investing. According to Cryptominati Capital “Crypto space is attracting investors, entrepreneurs, and individuals to invest and make new projects”.
Everyone gets into the cryptocurrency field to make money, but not all end up doing that. A lot of people either simply give up along the way, or lose money because they do not properly understand how to make money with cryptocurrency.
What is Crypto and How it Works?
A cryptocurrency is a decentralized payment method that you can use to trade online. However, the market is flooded with the best cryptocurrencies to invest in, from the popular:
Essentially, there are quite a few methods for you to make legitimate money with cryptocurrencies, other than the obvious way of trading.
Here Are Some Outlines To Better Understand Dollars And Cryptocurrency Market
- Storing cryptocurrencies in a software wallet is like carrying cash in an actual wallet. Available and waiting to be used.
- Putting cryptocurrency in a savings protocol is similar to depositing money in a savings account. The Savings Protocol pays you interest on the use of the service, in the same way, banks pay interest on some savings accounts.
- Storing cryptocurrency and borrowing from yourself is like putting money into a retirement account or getting a loan from it.
- Trading tokens on a cryptocurrency exchange is similar to trading shares on a stock exchange. Tokens represent blockchains, and stock-like protocols represent businesses.
Get A Crypto Wallet For Buying, Trading, And Storing
You will require a place to store your crypto – a wallet. You can pick a software wallet – like an app or a hardware wallet – an offline sort of device like a flash drive.
- Most software wallets, also known as Hot Wallets, are easy to recover if you lose your phone
- Most hardware wallets, also known as Cold Wallet, ain’t easy to recover if you lose them
Since software wallets are online, it’s faster and easier to trade or spend crypto. But vulnerable to online attacks that could lead to stolen funds. Hardware wallets are offline and impossible to hack, but the risk of getting lost or stolen is always there, like in any other real wallet.
You can skip these steps by installing an exchange app like Coinbase, Coinmarketcap, etc. Below are the steps that you need to follow to set up your account-
- Download a wallet app
- Create your account
- Get swift verification
- Transfer or deposit funds from the bank account to the crypto wallet
This is the fastest way to start buying and trading cryptocurrencies. Your assets are stored in an exchange-managed wallet, which adds some risk. Think about it. You are a hacker trying to steal millions of dollars. It’s a good idea to spend time hacking major exchanges to gain access to thousands of wallets. Hacking a software wallet is probably a waste of time.
6 Strategies for Making Money with Crypto
If you are wondering how to make money with cryptocurrency, look no further! Strategies for making money with crypto rely on three mechanisms:
- Firstly, you can invest or trade in the crypto exchange market. You can do this without owning any crypto yourself, like investing in gold on the stock market.
- Secondly, you can use the coin you already own to stake and lend coins to the system or other users.
- Thirdly, you can participate in the blockchain system by mining or receiving coin rewards for work done in the system.
Based on these three mechanisms, here are the six strategies for making money with cryptocurrency:
- Staking and Lending
- Crypto Social Media
- Airdrops and Forks
Each of these strategies is explored in more detail below.
Investing in the long-term strategy of buying and holding crypto assets for some time. Crypto assets are generally well suited to a buy-and-hold strategy. They are extremely volatile in the short term but have tremendous long-term potential for growth.
The investing strategy requires you to identify more stable assets that will be around for the long term. Assets such as Bitcoin and Ethereum have been known to show a long-term price increase and can be considered a safe investment in this regard.
While investing is a long-term endeavor based on the buy-and-hold strategy, trading is meant to exploit short-term opportunities.
The crypto market is volatile. This means the prices of assets can increase and decrease in price dramatically over the short term.
To be a successful trader, you need to have the proper analytical and technical skills. You’ll need to analyze market charts on the performance of the listed assets so that you can make accurate predictions about price increases and decreases.
When trading, you can either take a long or short position, depending on whether you expect the price of an asset to rise or fall. This means you can make a profit regardless of whether the crypto market is bullish or bearish.
3. Staking and Lending
Staking is a way of validating crypto transactions. If you are staking, you own coins but you don’t spend them. Instead, you lock the coins in a cryptocurrency wallet. A Proof of Stake network then uses your coins to validate transactions. You receive rewards for doing so. In essence, you are lending coins to the network. This allows the network to maintain its security and verify transactions. The reward you receive is similar to the interest a bank would pay you for a credit balance.
The Proof of Stake algorithm chooses transaction validators based on the number of coins you have committed to stake. This makes it’s much more energy-efficient than crypto mining and does not require you to own expensive hardware.
You can also choose to lend coins to other investors and generate interest on that loan. Many platforms facilitate crypto lending.
4. Crypto Social Media
Multiple blockchain-based social media platforms will reward you for creating and curating content. You are often rewarded with the native coin of the platform.
Cryptocurrency mining is how to make money with cryptocurrency like the original pioneers. Mining is still a crucial component of the Proof of Work mechanism. It is where the value of a cryptocurrency is generated.
If you mine a cryptocurrency, you are rewarded with new coins. To mine, you need technical expertise and upfront investment in specialized hardware.
Running a master node as a subset of mining. It requires expertise and significant upfront and ongoing investment.
6. Buy and HODL
This is the most common way of earning money from cryptocurrencies. Most investors buy coins such as Bitcoin, Litecoin, Ethereum, Ripple, and more and wait until their value rises. Once their market prices rise, they sell at a profit.
This investing strategy requires one to identify more stable and volatile assets that can shift in value rapidly, resulting in regular profits. Assets such as Bitcoin and Ethereum have been known to maintain regular price fluctuations; they can, therefore, be considered a safe investment in this regard. However, you’re welcome to trade any asset you feel is going to rise in value; all you need to do is to analyze each asset you invest in before committing to HODLing it.
Also, you don’t need to buy the most expensive assets for you to make profits. There are thousands of small altcoins that have decent price shifts; consider having a mix of all coins that have a promising future value and are not just popular in the exchanges.
7. Airdrops and Forks
Airdrops and free tokens are distributed to generate awareness. An exchange might do an airdrop to create a large user base for a project. Being part of an airdrop can get you a free coin that you can then use to buy things or to invest or trade.
A blockchain forks because of changes or upgrades in a protocol that create new coins. If you hold coins on the original chain, you will typically get free tokens on the new network. This means you get a free coin because you were in the right place at the right time.
8. Cryptocurrency Faucets
Crypto faucets are not that popular, but a very viable means of income-generating. Bitcoin faucets are the most popular ones and they are basically a reward system that runs in the form of a website or application that offers rewards to qualified users in form of a Satoshi. A Satoshi is a hundredth of a millionth BTC; a reward awarded for completing a task such as capture or any other as may be required by the application or website.
The tasks may also be in form of fun activities such as playing games, watching videos, viewing certain ads. Each task that’s accomplished earns you a small portion of Bitcoin. You may need to complete quite a number of tasks to be able to make any tangible income from cryptocurrency faucets.
You can check out some faucets right here.
9. Create Cryptocurrency Content
Over the last decade, content has become one of the most effective ways of communicating any message to your existing or potential clients. If you need to launch a new product or service, content is the best way to do that.
The crypto sector, especially, relies on content marketing a lot due to the fact that most projects are virtual. It may, therefore, not be possible to use conventional marketing ways to reach the target audience. And this is where the opportunity lies; you can create video content, infographics, or written content for various cryptocurrency brands.
Some of the websites that offer regular gigs for content creators in the cryptocurrency space include Yours, Y’alls, and Steemit.
Other Crypto Considerations
Knowing and understanding the strategies above will be really helpful — if you have a good grasp of the concepts around cryptocurrency. But if you aren’t clear on some of the basics, like understanding how crypto gains value, how to read the crypto charts, what an ICO is, or how to pay taxes on your crypto gains, you might want to take a beat before diving in.