It is impossible to go for some days without cryptocurrencies making headlines. They make headlines because some people are using them to earn a living. Crypto is the hottest investing topic right now.
There are many articles on the internet about how people are making millions by investing in cryptocurrencies. Unfortunately, most of the guides on how to make money with cryptocurrency are too technical and complicated for you to understand and implement.
I’m here to let you know that anyone, including you, can start making money with cryptocurrency. By the end of this guide, you will be some of the different ways you can earn money with cryptocurrency and all you need to get started.
Practical ways to make money with cryptocurrency
1. Mining cryptocurrencies
Cryptocurrency mining is a great way to make money in the cryptosphere. All you need to start earning through this method is to invest in powerful computers. When it comes to mining cryptocurrencies, the faster your computer is, the better. A computer with a high processing power will make more coins for you, allowing you to earn more money.
Cryptocurrency mining works by having your computers solving complex mathematical problems. When your computers solve these problems, you earn a cryptocurrency.
These problems get harder and harder with time as more cryptocurrencies are created. You need to know that you will not earn anything if someone else solves the problem before you. Investing in high-end systems is recommended to make more money mining cryptocurrencies.
2. Buy and hold
Buying and holding hit the mind of many people when they hear news about cryptocurrencies. It is an excellent method to start earning with cryptocurrencies. It involves buying some asses like stock and cashing out when interest builds up. After buying, you wait until the price of your chosen currency goes up to sell your assets at a higher rate than you bought them.
For example, the price of Bitcoin in 2013 was around $13. In 2018, the price of 1 Bitcoin went up to $20,000. If you had purchased 100 Bitcoins in 2013, which would have been worth $1300, and sold then in 2018 at the peak price, you would have made approximately $2,000,000.
When buying your coins, I recommend that you opt for those that have been in the market for some time. New coins in the market come at low prices, but some of them disappear after some time. Those that have been around, such as bitcoin, Etherium, Litecoin, and ripple, don’t have such risks. Coinbase is the most beginner-friendly and will give you $10 in bitcoin on your first order above $100.
3. Buy and hold for dividends
In this method, you earn when you sell at higher prices than your buying price. Some currencies such as BitMax, KuCoin, Komodo, Neblio, Neo, PIVX, and NAV coin will pay you dividends for just holding them. Such currencies don’t require you to purchase or own the coin. All you need to do is hold and keep their coin in circulation.
4. Staking cryptocurrencies
Staking cryptocurrencies combines methods 2 and 3. You buy a currency of your choice, hold it, and plan to sell it at a later time to make a profit. You will also receive dividends for holding the coins. It is one of the easiest and safe ways to start making some money with cryptocurrencies. Some of the best currencies for staking include komodo, Neblio, deCRED, PIVX, and Navcoin.
5. Cryptocurrency arbitrage
The cryptocurrency market is a free market that is not under any government’s control. Being a free market, it has price differences across different exchanges. These exchanges allow you to create an account and login to start trading cryptocurrencies. You can start earning money by buying cryptocurrencies from one exchange and selling them to exchanges that are buying at a higher price, allowing you to make profits. Buying cryptocurrencies from one exchange and selling them to another to earn a profit is known as arbitrage. All you need to be doing is tracking which exchange is selling at a low price and which one is buying at a higher price. Beginners can teach themselves using a crypto trading bot known as Cryptohopper. The best exchanges for beginners are Bittrex and Poloniex.
6. Lending cryptocurrencies
If you have some bitcoins or Ethereum, you can put them to work and start earning interest by lending them out. There are several Bitcoin Peer to Peer lending platforms that will allow you to lend your coins and earn 12 to 18 percent return on investment. The best Bitcoin Lending sites for both beginners and experts are Nexo, BlockFi, and Celsius Network.
You need to know that the cryptocurrencies’ lending space is highly unregulated. To make sure that you get your return on investment, you need to choose those you are lending your Bitcoin diligently and make sure to adhere to all policies.