So, you want to get into cryptocurrencies and turn them into cash. You have heard all the success stories - people making millions of dollars by getting in early and selling when prices are high. Or maybe you have friends who are earning a steady income by mining cryptocurrencies.
Everyone gets into the cryptocurrency business to make money, but not everyone succeeds. Many people simply give up along the way or lose money because they don't properly understand how to make money with cryptocurrencies.
The cryptocurrency industry is still in its infancy and newcomers are still trying to figure out how to make money with cryptocurrencies.
The good news is that there are many ways to make money with cryptocurrencies. Since 2011, developer activity, social media activity, and the number of startups created in the cryptocurrency sector have continued to grow.
Here we take a closer look at how to make money with cryptocurrencies.
So, can you make ‘real’money with cryptocurrencies?
Yes, you can make money with cryptocurrencies. Given the inherent volatility of crypto-assets, most of them carry a high degree of risk, while others require knowledge or expertise in the field.
Cryptocurrency trading is one of the answers to the question of how to make money with cryptocurrencies. Although the average daily trading volume in cryptocurrencies is only 1% of the foreign exchange market, the cryptocurrency market is very volatile. Therefore, it is possible to trade on a short-term basis.
Even though the cryptocurrency market is relatively small at the moment, the growth potential is significant. In addition to some of the more well-known cryptos likeBitcoin, Ethereum, Cardano, AMP, Dogecoin, ElonGate, Iota, Moonshot, Polygon, Safemoon, Stellar, Tether, VTHO, Shiba Anu, and many more.
Likewise, there is a multitude of cryptocurrency buying platforms such as Binance, Coinbase, and Robinhood - so you have plenty of options when it comes to making money with cryptocurrencies.
Essentially, there are several methods for you to make legitimate money with cryptocurrencies other than the obvious way of trading.
Let's take a look at 6 strategies for how to make money with cryptocurrencies.
6 Strategies for Making Money with Cryptocurrencies
If you're wondering how to make money with cryptocurrencies, look no further! Strategies for making money with cryptocurrencies are based on three mechanisms:
1. You can invest or trade on the cryptocurrency exchange market. You can do this without owning any crypto yourself, just like investing in gold on the exchange.
2. You can use the coins you already own to bet and lend coins to the system or other users.
3. 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 cryptocurrencies:
1. Investing
Investing is a long-term strategy that involves buying and holding cryptoassets for some time. They are extremely volatile in the short term but have tremendous growth potential in the long term.This investment strategy requires you to identify more stable assets that will be around for the long term. Assets such as Bitcoin and Ethereum are known for their long-term price appreciation and can be considered a safe investment in this regard.
2. Trading
While investing is a long-term endeavor based on the buy-and-hold strategy, trading is meant to exploit short-term opportunities.The cryptocurrency market is volatile. To succeed as a trader, you need to have the right analytical and technical skills. You will need to analyze market charts on the performance of listed assets so that you can make accurate predictions about price increases and decreases. When trading, you can go long or short, depending on whether you expect the price of an asset to rise or fall. This means that you can make a profit whether the cryptocurrency market is rising or falling.
3. Staking and lending
Staking is a way to validate crypto trades. If you stake, you own coins, but you don't spend them. Instead, you lock the coins into a crypto wallet. A Proof of Stake network then uses your coins to validate transactions. You receive rewards for this. In effect, you are lending coins to the network. The Proof of Stake algorithm chooses transaction validators based on the number of coins you have committed. This makes it much more energy-efficient than cryptocurrency mining and does not require you to own expensive hardware. You can also choose to lend coins to other investors and earn interest on the loan. Many platforms facilitate cryptocurrency lending.
4. Social media in cryptocurrency
Multiple blockchain-based social media platforms will reward you for creating and curating content. You are often rewarded with the platform's native currency.
5. Mining
Cryptocurrency mining is the way to make money with cryptocurrencies like the original pioneers. This is where the value of a cryptocurrency is generated. To mine, you need technical expertise and initial investment in specialized equipment.Mining a master node is a subset of mining. It requires expertise and significant initial and ongoing investment.
6. Airdrops and Forks
Airdrops and free tokens are distributed for public awareness. An exchange can conduct an airdrop to create a broad user base for a project. By participating in an airdrop, you can get a free coin that you can then use to buy things, invest, or trade.A blockchain forks due to changes or upgrades to a protocol that creates new coins. If you hold coins on the original blockchain, you will usually get free tokens on the new network.
The Bottom Line
Knowing and understanding the above strategies will be helpful - if you have a good grasp of the concepts related to cryptocurrencies. But if you're not clear on some of the basics, such as understanding how cryptocurrencies gain value, how to read cryptocurrency charts, what an ICO is, or how to pay taxes on your cryptocurrency earnings, you may want to take some time before you get started.
Read more:
https://plaza.rakuten.co.jp/joshephlewis/diary/202201280001/
https://www.reddit.com/r/forextradingbrokers/comments/seq7hc/what_are_crypto_scams_and_how_to_avoid_them/
https://sway.office.com/U759SSoruPTq1EJ5
https://blog.libero.it/wp/joshephlewis/2022/01/28/does-cryptocurrency-gain-value/