Cryptocurrencies are making their way into the world of economics. And assuming you are as opportunistic as a person as me, you would love to learn how you can make money off of it. As it is a fairly new concept, some people may not know about the various ways cryptocurrency can be used to make real-life cash. Well, if that’s you then you’re in luck. Because that is exactly what we will cover in this article.
There are many ways to invest in cryptocurrency. Some of the ways include trading, mining, investing, and lending Bitcoins. Although, among all the options, investing in a Crypto Index Fund is the safest option. There is less risk of loss. Furthermore, it is less complicated than the other options.
Well, that is just scratching the surface. In this article, we will go much more in-depth about each of the methods on how to make money with cryptocurrency. Hopefully, by the end, you will have a decent idea of how to make money with cryptocurrency. So, read on!
How to Make Money With Cryptocurrency
Cryptocurrency is new. But the opportunities it already provides to earn loads of money are what sets it apart from real-life cash. You can just invest in crypto, like investing in the stock market, and reap profits within the span of a few days.
But there are more ways to earn using cryptocurrency than just investing. Let’s check out some of them.
1. Invest in crypto index funds
Crypto Index Fund operates more like a stock exchange market. Here, investors do not directly have to deal with buying and selling crypto coins. They only invest a certain amount of cash in the Crypto Index Fund.
Like the stock exchange market, the crypto industry experts analyze the whole market and invest your money in the best possible crypto coin available for investment. As a result, the investor does not have to be directly involved. This means a lesser chance of risky transactions and fund loss.
2. Buying and selling in the cryptocurrency market
This is one of the simplest ways to invest. People who actually have a very minimum idea about cryptocurrency can follow this method. You just have to look at the current cryptocurrency market and figure out which of the currencies or coins can make a profit.
There are some common coins that are largely popular and more stable than the rest, such as Ripple, Ethereum, Bitcoin, and Cardano. Which means there are fewer chances of a huge price fall. So, if you are a beginner investor, I’d highly advise you to go with these.
The best options would be to purchase Ethereum and Bitcoins. These two are more well-established in the market. As a result, there are fewer market fluctuations. This means they have the highest stability, although the amount of profit is also less.
3. Earning dividends from cryptocurrency
This is one of the less risky methods if you know about the cryptocurrency market. It means buying coins and then holding them. Other users can use a portion of the total wallet of your coin and pay you a percent dividend for it.
There are some coins, like CEFF, NEO, etc., that have these characteristics. Therefore, not every type of crypto coin can be held to gain dividends. Only a selected few can generate dividend revenue for their digital asset.
4. Mining for crypto coins
Mining is a popular way to earn crypto coins if you have the resources available to you. The investment is high, and the return is slow initially. However, the better machinery you provide, the more pay you will get. You will have to invest in some costly hardware to make any profit. But once you have a large enough crypto farm, the profits can be exponential.
But this process consumes a lot of energy. As a result, the product or machinery depreciates faster. So, if you have an idle PC that has an excellent setup, this is an excellent opportunity. But if you are a regular PC user, mining isn’t actually the best option in the long run. It causes damage to your hardware and reduces the overall lifespan of the machinery.
5. Cryptocurrency day trading
This type of investment is more of a short-term investment. That is, the investor needs to have a good amount of knowledge about the ongoing crypto market. Day trading is basically regular transactions and ongoing cryptocurrency. Not only is it risky, but it also requires higher efficiency.
However, as the saying goes, high risk leads to High Rewards. The return is quite high. There is a chance of gaining almost triple the gain if you play your cards right. On the other hand, you can lose it all in a single day. So, it is comparatively a riskier alternative to earning from cryptocurrency.
6. Arbitrage of crypto coins
This method is simply the trade of cryptocurrencies. That is, trading one cryptocurrency with another of the same value. However, this process is similar to that of Day Trade. As a result, although the returns are high, the potential risk is also more.
Although there are imbalances as the price of the crypto coins fluctuates a lot. So, it is not ideal to trade one type of coin with another. Moreover, the prices vary from one coin to another, so there will be a shift of quantity too. Despite the fact that this method bears a good amount of profit, there are certain complications.
7. Benefits of investing in crypto index funds
One of the biggest advantages of investing in a Crypto Index Fund is that it is extremely safe. That is, there is a fear of losing money in the other alternatives. But if someone has entry-level knowledge about the cryptocurrency market, then Crypto Index Fund is the best choice for investment.
Let’s take a closer look at the benefits of investing in crypto index funds.
One of the key benefits of the Crypto Index Fund is that the fund is often used to invest in a number of coins. This ensures that there is diversity and more chance of gaining large returns on the capital.
When you have multiple investments, it means even if a coin fails or greatly reduces in value, you don’t have to go broke. You have investments in other coins as well that can more than make up for your loss.
9. Minimal risk
The risk level of investing is less in a Crypto Index Fund. Since it operates like a stock exchange, investors usually do not directly take part in transactions. They only provide monetary funds, and industrial experts use those funds to purchase shares and assets. As a result, investors do not have to worry about analyzing the market.
The experts have experience and are better suited for the job. Hence, there is very little chance of the investor facing a huge amount of loss. Also, as Crypto Index Funds have professionals who analyze and overview the transactions and overall market situations, there is more possibility of getting a higher return than in other alternatives.
Cryptocurrency is very new to the world economy. As a result, not many know how to make money in the crypto industry. But it also means that the early adopters will be the most profitable as it has many opportunities but relatively fewer people chasing for them.
Hopefully, after reading the article, you have learned how to make money with cryptocurrency. Make sure to think about your investments carefully before committing to them. And if you are not sure of what to do, just invest in a good Crypto Index Fund and let professionals make the right decisions for you.
Invest in Mudrex Coin Sets, and you invest in thematic crypto baskets rather than a single token. With expert-curated baskets and frequent rebalancing, our experts ensure that you generate consistent returns with the best tokens.
1. How long does it take to make money in crypto?
The prospect of making money out of crypto depends upon the kind of investment. You can start trading to earn daily profits, invest for the long term to build wealth, or even stake your crypto to earn rewards at regular intervals.
2. How to earn daily from cryptocurrency?
You can start earning daily rewards/ cryptocurrency by various methods like mining, trading, or playing NFT play to earn games. Mining may require some additional equipment. Playing NFT-based games could be a very interesting way to earn crypto as well.
3. How much should you invest in crypto to make money?
While returns are a function of your investment sum, you may not see success no matter how much you invest unless you do your due diligence. However, it is always advised to start small and learn about the space before investing a large sum of money.
This piece is specially written for Mudrex by Victor G.