How can you make money with Bitcoin and other cryptocurrencies?
Earning money with crypto is possible! In this article, I will discuss ten ways to make money with Bitcoins & other cryptocurrencies.
What are cryptocurrencies?
Before I dive deeper, I will briefly explain what cryptocurrencies are. Cryptocurrencies are a form of digital & decentralized currency. You can buy and sell crypto, and the exchange rate constantly fluctuates due to the interplay of supply and demand.
Can you make money with crypto?
You can definitely make money with crypto! There are various stories of people who have become millionaires with a small investment in an unknown crypto.
However, it is important to consider the risks. For every winner, there are many losers. Therefore, only invest in crypto with money that you can afford to lose.
Way 1: active trading or day trading
By actively trading, you can quickly make a nice profit. Day traders actively buy and sell cryptocurrencies based on the latest news. At some brokers, you can use leverage, allowing you to take a larger position with a small amount of money. In many cases, it is also possible to short: you then speculate on a falling exchange rate.
Want to try actively trading cryptocurrencies yourself? Then open a free demo account with a reliable crypto exchange:
Way 2: Earn money by investing in crypto
If you have little knowledge of crypto, you can still make money by investing in crypto for the long term. For example, you can buy Bitcoin and wait until it increases in value. Long-term investments are easier because you only need to place an order once.
Some investors try to make as much money as possible by buying Bitcoins when the price has dropped significantly. At a low price, you pay less, which can give you a kind of discount in case of a significant drop in the price.
If you want to invest periodically in crypto, you can also choose dollar cost averaging. You then invest a fixed amount at a fixed time. This way, you invest in crypto at both low and high prices, allowing you to achieve an average return.
Method 3: Staking your crypto for extra returns
Many crypto exchanges allow you to stake your crypto and earn extra returns that way. By doing so, you lend your crypto to other parties. In some cases, you may lose your crypto for an extended period of time, but this is not always the case.
Keep in mind that staking is not without risk. You have counterparty risk in this case, and you may lose your entire crypto balance. Therefore, consider whether the extra returns outweigh the additional risks.
Method 4: Buying and selling NFTs
You can also earn money in the crypto world by trading NFTs. NFT stands for non-fungible token, which is used to provide digital art with ownership rights. This proof of ownership is stored on the blockchain, allowing everyone to see that you are the owner.
When you have sufficient insight, you can try to buy NFTs cheaply and sell them at a higher price. Some NFTs appreciate significantly in value, while others depreciate sharply. Therefore, it is important to study the market carefully before starting to trade NFTs.
Way 5: Crypto mining
In the past, mining cryptocurrencies was an attractive way for individuals to earn extra money. However, due to the high energy prices in the Netherlands, it is difficult to still make money from mining crypto.
Earning money from mining crypto is now only reserved for large companies or people who live somewhere where electricity is almost completely free. For example, if you have a lot of excess energy from your solar panels, you could still consider mining cryptocurrencies.
Way 6: Investing in ICOs & altcoins
Within the crypto world, we call all cryptocurrencies that are not Bitcoin altcoins. When a new crypto is launched, this is also called an ICO or initial coin offering.
You can earn a lot of money by investing in the right altcoin. Cryptocurrencies like Binance Coin and Dogecoin all started small and then rose in value by hundreds or even thousands of percent.
The difficult part, however, is that most altcoins end up worthless in the end. Therefore, it is important to research the team behind a cryptocurrency carefully. This way you can prevent losing your entire investment because a cryptocurrency turns out to be a pump and dump.
Way 7: Crypto Stocks
Personally, I am a big fan of investing in crypto stocks. The value of cryptocurrencies is determined 100% by the game of supply and demand. Like other fiat currencies, their price is based entirely on trust without any underlying value.
However, companies build something and actually employ people. For example, a crypto exchange like Coinbase makes it easy to buy cryptocurrencies. Also, companies like Nvidia benefited greatly from the crypto boom in 2020 by producing graphics cards used for mining bitcoins.
However, it is also important to research the company when investing in stocks. Crypto stocks are also very volatile: for example, Coinbase dropped more than 80% in 2022 due to disappointing revenue and earnings.
Way 8: Earn free crypto with a quiz
You can earn free crypto with Coinbase Earn by participating in educational quizzes. You can earn between $1 and $5 worth of crypto for completing a quiz.
Coinbase offers various educational videos about a cryptocurrency. If you don’t have time to watch the videos, you can often find the answers to the questions online. You can convert the free crypto you receive directly to USD Coin and withdraw the funds.
Way 9: Airdrops & Forks
Crypto exchanges sometimes give out free crypto to their users through an airdrop. Developers use this strategy to boost their cryptocurrency.
It can also happen that an update in a protocol creates a new cryptocurrency. If you own the crypto on the original chain, you often receive free tokens on the new network. This can work out well in some cases: Bitcoin Cash & Bitcoin Gold, for example, were forks of Bitcoin.
Way 10: Working as a crypto influencer
The last way to make money with crypto is by becoming an influencer. You can share videos on YouTube, for example, about your favorite crypto coin. You can then earn money by advertising crypto products in exchange for compensation.
Conclusion: Can you make money with crypto?
You can definitely make money with crypto! However, it is a misconception that making money with Bitcoins is easy. Risk and return are always inseparable, and if you want to make a lot of money, you will have to take big risks. Therefore, do your research carefully to determine if the method is suitable for your investment profile.