We have all heard success stories of investors making thousands of dollars by trading in cryptocurrencies, but not all investors end up doing that. The cryptocurrency drive is still in its early phases of development. Many either give up along the way or fail to gain profit because they do not adequately understand how to earn money with crypto.
If you are a newcomer and wondering how to make money by investing in cryptocurrency, you should know that there are multiple ways of making money with cryptocurrency. Over the last decade, there has been consistent growth in the industry, and there are multiple ways to earn money other than the obvious crypto trading.
So without any further delay, let us have a look at five ways to earn money with crypto:
#1. Traditional Buy And Hold
Invest in crypto for the long term and hold your assets for some time. Some cryptocurrencies like Bitcoin, Ethereum, and Litecoin rise and fall daily, but over a longer period of time, they generally return a significant profit.
However, some cryptocurrencies disappear if there are not enough buyers in the market. Hence, it is vital to read the white paper for a particular cryptocurrency before you decide to buy it. Furthermore, you don’t need to buy the most expensive assets to make profits. Hundreds of small altcoins have decent price shifts and deliver excellent future value.
#2. Crypto Trading
Crypto trading can get you a high income by utilizing short-term opportunities. You can be a successful day trader with proper analytical and technical skills. Analyze the market chart of the shortlisted assets’ performance and make accurate predictions about the price increase and decreases. If you buy crypto using this approach at a low cost and sell it at a much higher price, you can maximize your profits, but it also makes you vulnerable to significant risks.
The crypto market is unpredictable, and the prices of assets can rise and fall dramatically over a short span. If you don’t sell assets when their value increases, you can lose your crypto coins. So master the art by studying and analyzing different cryptocurrencies and their movements over a period of time, learn about the events that tend to trigger those movements before you invest.
#3. Crypto Staking
Crypto staking is validating and blocking digital assets in a decentralized cryptographic network like a crypto wallet. In return, the stakeholders are paid with the newly created cryptocurrency as an incentive to help secure the network and lend coins to the network. It also allows the network to maintain its security, integrity, and continuity.
This approach is comparatively cheaper to obtain money from cryptocurrencies, but price fluctuations are the most significant danger of earning crypto.
#4. Crypto Mining
It is one of the oldest methods to earn from cryptocurrencies and is always a crucial element of the Proof of Work (PoW) mechanism. Miners are rewarded with new coins in block rewards to perform these functions.
Mining was possible on a desktop computer in its initial trading days, but now you need technical expertise and upfront investment in specialized hardware. Starting a master node (a wallet that hosts a copy of the entire network) is also profitable for network maintenance.
#5. Crypto Gaming
To most people’s surprise, you can earn crypto by completing a task in the form of fun activities such as playing games, watching videos, or viewing certain advertisements. These games or applications are offered by various platforms, and each Axie in itself is an NFT (non-fungible token), or in simple terms, you earn a small portion of Bitcoin for each task that is accomplished.
Tokens earned by the players by winning a battle with their Axies can be sold for fiat money (real cash) or sold on Axie’s marketplace. Like any other task, this approach has its own cons. You may need to complete several challenges to make a substantial income from cryptocurrency faucets.
So, do you think you can make money with cryptocurrency now? We discussed the five best ways to earn money with crypto. You can try the one that works the best for you.
One thing you must ensure is to know the asset before investing. If you are just starting out, here are 6 Trading Mistakes to Avoid for Crypto Beginners.