How do you make money with crypto? What are the best strategies to earn a profit from the cryptosphere?
If we are being honest, these are the questions that make a lot of new users gain interest in blockchain technology.
They are reasonable questions. In this article, we will try to give a quick rundown of the seven best ways to make money from crypto.
Note that many fortunes have been made this way. However, all of these methods are not sure-fire ways to earn a profit, they involve a good amount of risk and all of them will require your diligent research.
Table of Contents
- 1. Crypto investing
- 2. Trading
- 3. Mining
- 4. Staking and lending
- 5. Airdrops and forks
- 6. Crypto savings accounts
- 7. Crypto Social Media
- Bonus strategies
- Will these strategies can make you richer?
1. Crypto investing
Obviously, you can make money with crypto by investing in crypto.
Investing in cryptocurrencies is the method most associated with profit-earning from the crypto-world. In short, it involves purchasing a number of units of one cryptocurrency in hopes that its valuation will increase. You’ve probably heard about using Bitcoin to make money online even if you are new to the world of crypto. Can you make money trading cryptocurrency?
Bitcoin’s price change is a good indicator of the potential of this strategy. In 2010, the price of Bitcoin increased dramatically … to $0.09. At the moment of writing, the price for one unit of Bitcoin is near $35.000. Similar price hikes have occurred for other crypto assets such as Ethereum or DOGE. Naturally, this makes many potential investors interested in purchasing crypto.
Investing refers to the long-term strategy for buying and holding crypto assets over time. Some playfully refer to it as Hodling, a reference to a popular meme. The best strategy involving crypto assets might just be the buy-and-hold strategy. Crypto assets are generally highly volatile but have great long-term growth potential.
You will need to identify assets that have long-term potential. Bitcoin and Ethereum are safe investments because they have a history of a steady price rise over the long term. Stablecoins should maintain their value over time. And, various altcoins try to attract the attention of crypto users.
Are there risks? Absolutely! Not all cryptocurrencies are equal. In fact, in 2021 at least over 200 altcoins failed. Picking a winner is not easy to do.
How to make the best choice and how to make money from cryptocurrency? Research your potential investment! Start by reading the project’s whitepaper and skimming through their website. Find out about strategic partnerships. Interact with their communities on Reddit, Discord, or Twitter. Read the evaluation of crypto experts. If everything checks out, consider taking the plunge. While nobody can guarantee 10x profit, these are the steps to take.
Trading crypto is the short-term alternative to cryptocurrency investing. It is a highly popular strategy. Binance, the world’s biggest crypto exchange, for example, has over 28 million registered users.
Day trading is one of the best ways to make money from cryptocurrency. It is also the riskiest! You will need to understand price analysis. Next, you must determine what tokens are likely to increase or decrease in value. You can trade crypto all day, any day if you are able to do so. Be warned! In crypto trading, profit margins rise and fall at a rapid pace.
The fundamental concept of crypto-day trading is that you will seek to profit from short-term volatility. The crypto market is a volatile place and experienced traders will not hold onto a position for very long. As such, it is important to open multiple positions during the day, making smaller but more frequent profits. You can get money from trading Bitcoin and other cryptos, but sensible strategies are required.
You have probably read the news and already know that the cryptocurrency market fluctuates wildly. This means that assets’ prices can fluctuate dramatically in the short term. You need the right technical and analytical skills to be a successful trader. To accurately predict price changes and decreases, you will need to analyze market charts.
You can trade either a short or long position depending on how you anticipate the asset’s price to change. Technically, you can still make a profit, regardless of whether the cryptocurrency market is bullish/ bearish.
Are there risks? Yes, since this is the most profitable strategy on our list, it is also the riskiest.
What do you need to do? Begin studying the basics of price analysis. While there is a lot of fancy jargon, there are several websites or YouTube channels that offer guidance. Start making money by making sensible choices! Do not invest more than you are willing to lose! And, remember, that overall the value of great crypto assets tends to rise over time.
Mining is the original method for earning cryptocurrency. While its popularity has decreased in recent years, it can still be a viable way to earn a profit from crypto in 2022. You will, however, require some knowledge and the proper hardware. Still, this provides a definitive answer to the question “How to make money in crypto?”.
Mining is the act of connecting specialized hardware to a computer. In turn, the computer connects to a blockchain. The blockchain is a public ledger that contains all crypto transactions on a particular network. Miners help the network to function in a decentralized way. They are similar to inspectors of the system.
Because complex mathematical equations are solved by mining equipment, transactions can be properly validated. Miners receive newly minted cryptocurrency tokens, which are then put into circulation. Each block is also verified. In the case of Bitcoin, for instance, a new block is created every 10 minutes and it mints 6.25 BTC (until the next halving in May 2024) .
Mining remains a critical component of the proof-of-work (PoW) system. Many cryptocurrencies are verified in this way. Users receive rewards for validating these transactions. You will require technical knowledge and investment in hardware.
As a subset, you can run a master node. This requires expertise as well as significant ongoing and upfront investment.
However, there is still potential to this strategy. Many coins still use the proof-of-work (PoW) consensus mechanism. Many of these are up-and-coming coins whose value has the potential to increase highly over time.
4. Staking and lending
Staking and lending are strategies for earning passive income from your cryptocurrency assets. As the cryptosphere evolves, many services resembling those of banks start to appear. These are, however, usually much more profitable than regular banking.
Staking cryptocurrency involves collecting interest rates and fees through blockchain transactions. The process is simple! It involves placing cryptocurrency in an account and then letting it collect interest as well as fees from blockchain validators. The blockchain validators facilitate transactions. Stakeholders receive part of the generated fees.
Your coins are then used by a proof-of-stake (PoS) network to verify transactions. You receive rewards for doing so. You are basically lending coins to the network. This allows the network’s security to be maintained and transactions to be verified. This reward is comparable to what a bank would pay for a credit account.
Proof-of-stake (PoS) algorithms determine transaction validators based upon the amount of coins they have pledged to stake. It is much more efficient than crypto mining and doesn’t require expensive hardware.
Besides this, you may loan your coins to other investors. Various services facilitate these transactions for you. Essentially, you will deposit your coins and receive a percentage of the interest rate.
Is this risky? Usually, no. You should closely research the platform that you going to be using. However, the most well-known projects receive auditing. This strategy is usually among the safest on the list. If used right, it provides crypto profit without much effort.
5. Airdrops and forks
Crypto airdrops are a wonderful way to learn about DeFi protocols and to earn money. You only need to set up your crypto wallets and receive notifications from the top airdrop portals. It’s a way to earn passive income. What is required, is some form of endorsement of the crypto space.
Airdrops are when an issuer deposits new coins directly into the wallet of a user, usually in exchange for the user’s support. This could mean activity on social media, their adherence to the community, etc. Airdrops can occur when new digital currencies are made available to users, similar to hard forks. However, their purpose and distribution are very different. Think of airdrops as a gift provided by companies looking to raise awareness of their product, or repay the fidelity of their users.
A fork is when a blockchain’s protocol is changed to create a new blockchain that runs parallel with the original. This is usually done to meet change requests from certain users, such as miners, investors, creators, and investors. For instance, Bitcoin forks have been the main focus of the industry and are often seen as a way to upgrade an existing blockchain.
Essentially, if you already own belonging to the original blockchain project, you may be in line to receive a corresponding amount for the new project. Crypto forks, usually, occur when two sets of philosophies from within a crypto project diverge. Each new project runs according to its philosophy about crypto.
6. Crypto savings accounts
Crypto savings accounts are, essentially, blockchain-based alternatives to the regular financial packages provided by banks. They’ve proven to be quite profitable in recent years. Simply put, while these are possibly less secure than the traditional financial sector, they offer much higher rewards.
Yearly yields can be very high, reaching upwards of 20% in some cases. The process is relatively straightforward and involves investing your Bitcoin or other cryptocurrencies into an account set up by these companies. The withdrawal period can be set, or variable depending on the offer.
While the traditional financial system seems to involve a greater amount of security, this does not necessarily mean that crypto savings accounts are unsafe. In fact, in the crypto world, this is one of the safest, most reliable strategies for earning additional profits.
There are a number of specialized platforms, and exchanges that offer this crypto-financial offer. Celsius, BlockFi, or YouHodler have made a name for themselves in this space. Famous exchanges such as Binance and Crypto.com have also entered the market offering attractive yields.
7. Crypto Social Media
Web 3 may well be a time when you’ll not only be able to keep a record of all activities in your life. It may also be a time when you are compensated for the time you spend online. Using crypto social media channels to earn an additional income is nothing new. However, this is a system that is growing and finding new people to embrace it.
It’s a system similar to the play-to-earn or walk-to-earn strategies. Essentially, it rewards your contributions to various social media channels. For example, Steemit is a social media platform, not unlike Reddit or Twitter. It is, however, focused, especially, on blockchain technology. Upvoted posts receive Steem, the native cryptocurrency of the platform.
There are other platforms such as Appics that operate using a similar system. Besides, other similar projects have existed in the past. The trend is not going away. More companies are going to pay their customers for using and interacting with other platform users.
Play-to-earn blockchain games
The play-to-earn blockchain games take a novel approach to the gaming industry. It used to be that a gamer had to purchase a game, and every other new addition afterwards if they enjoyed it. These types of blockchain games, however, are free to play. Besides, they reward the users with valuable cryptocurrency prizes for their involvement. Games such as Spells of Genesys, and FootballCoin were pioneers in this field. Recently, the likes of Axie: Infinity, The Sandbox, or SoRare have garnered plenty of attention.
Walk-to-earn and run-to-earn apps
Many new apps are establishing themselves in the walk-to-earn or run-to-earn spectrum. As the name suggests, these apps reward users with crypto for doing physical activity. STEPN has had the greatest amount of success so far. The app runs on the Solana blockchain. It encourages users to buy NFTs representing sneakers, that, combined with their physical activity, provide them with rewards.
Sweatcoin is the largest walk-to-earn app. The software tracks your steps and rewards you with the SWEAT token. So far the token was responsible for discounts on various products. However, starting in the summer of 2022, Sweatcoin will release its very own cryptocurrency.
Brave is a web browser focused on user privacy. When signing on to Brave, you will earn crypto in exchange for accessing various vetted advertisements. Just make sure that you have your Brave rewards turned on and you are ready to go!
Coinbase is one of the most well-known crypto exchanges. The platform, often, will give out crypto rewards in exchange for reading informative content about various crypto projects.
Will these strategies can make you richer?
The world of blockchain technology is here to stay. Each day, it is integrating more into mainstream activities. Is, also, changing at a rapid pace. One of the promises of Web3 is greater, more transparent rewards for internet users. After all, companies earn revenue based on how much of the attention of the public they are able to mine.
With this in mind, consider these methods as ways to earn additional cryptocurrency income. However, make sure to study each one. Also, make sure that when investing, you do not use funds that you cannot afford to lose. There are always risks involved.
However, you may also earn terrific rewards if you’re looking to make money with crypto. Great fortunes have been made from the crypto-space in the past. And, as crypto becomes mainstream greater safety and better rewards may be just on the horizon.