Cryptocurrency is a relatively new investment vehicle that many investors are trying to board.
Launched for the first time in 2009, cryptocurrency has gained momentum in the last decade. By August 2023, there are over 20,000 cryptocurrencies in the marketplace.
This growth implies that the industry is becoming a popular way to make money online.
But, how can one make money with cryptocurrency?
This post will explore some of the best ways to make money with crypto in 2023 and beyond.
How to Make Money with Cryptocurrency
What is Cryptocurrency?
Before we get started, let’s just clarify what actually is cryptocurrency.
In simplified terms, cryptocurrency is digital money.
Unlike banknotes and coins, cryptocurrency is intangible so one isn’t able to hold it and feel its texture.
Even so, it’s a decentralized system that one can use to facilitate transactions online.
There are different types of cryptocurrencies, available for investing. For instance, to make money with Bitcoin, one has to own some Bitcoins.
Cryptocurrencies operate on a digital ledger known as blockchain.
All transactions are processed on the blockchain and no one can change the figures therein.
Bitcoin is the pioneer cryptocurrency, but many other digital currencies have come up since its invention.
Here are the main ways to make money with cryptocurrencies:
Cryptocurrency Staking
Crypto staking is a popular method of crypto investing.
It involves keeping a given amount of cryptocurrency in a wallet for a specified duration.
At the expiry of the specified time, the staked digital currency generates passive income, similar to what one can earn in a compound interest account.
The amount of interest earned depends on the cryptocurrency, the duration of staking and the amount of coins staked.
This method of crypto investment is applicable to many cryptocurrencies, including Ethereum, Cardano, Tezos, Solana, Polygon and more.
Bitcoin doesn’t support staking due to the fundamentals and the technology behind it.
Buying and Holding Cryptocurrencies
Buying and holding is a traditional way of earning money with cryptocurrency, which investors still use to date.
In this strategy, an investor buys a preferred crypto from a cryptocurrency exchange of choice, especially when the prices drop.
In the crypto space, this is referred to as “buying the dip.”
An investor may sell the cryptocurrencies later at a profit.
The crypto market is volatile and the prices of different virtual currencies such as Bitcoin, Ethereum and others can rise and fall daily.
When that happens, the prices of little-known cryptocurrencies also drop and rise accordingly.
This creates an opportunity for investors to buy at lower prices and sell at higher prices, as the market forces allow.
Investing in Cryptocurrency
One can make money by investing in different cryptocurrencies.
This strategy involves buying individual coins such as Ethereum, holding them for some time and selling them later at a profit.
Similarly, one can buy a crypto index fund.
These funds aim to increase the performance of a crypto index or a given market segment,
In the end, they give investors diversified exposure to the crypto market while spreading the risk.
Investors can use this strategy to diversify their portfolios and earn profits from different crypto assets.
Cryptocurrency Trading
While investing is a long-term method that uses a buy-and-hold strategy, cryptocurrency trading takes advantage of short-term profit-making opportunities.
The crypto market is volatile and unpredictable, so asset prices can rise and fall within a short time.
Successful traders need to have strong technical and analytical skills.
It’s also possible to trade cryptocurrency pairs such as BTC/USD depending on market trends and technical analysis.
This strategy requires one to know how to study charts and use price indicators to foresee future crypto price movements.
Cryptocurrency Airdrops
Participating in cryptocurrency airdrops is another way to make money with cryptocurrencies.
An airdrop is a process whereby crypto-related companies and projects distribute free tokens to selected participants.
Participants don’t need to pay any money or deposit upfront.
The strategy involves spreading project information on social media platforms, such as X or joining an online community.
Participants may also be asked to complete simple tasks such as watching an informational or educational clip.
In the end, the selected participants are rewarded with crypto tokens, which they can redeem for money.
iGaming
The digital gaming space has created opportunities to earn money through crypto.
Some games such as Zed Run, Axie Infinity and Gods Unchained allow players to earn crypto through play-to-earn NFT (Non-Fungible Tokens).
In addition to competing with other players, participants can complete tasks to win cryptocurrencies or NFTs, which they can hold, sell or reinvest in the game. It’s another way of earning money with cryptocurrencies.
Ready to Make Money With Cryptocurrencies?
While it’s volatile and unpredictable, the crypto market is a potential avenue for investment.
Anyone can make money with cryptocurrencies.
However, it calls for a deep understanding of the market and choosing a niche.
Some investors prefer dealing with mainstream cryptocurrencies such as Bitcoin, Ethereum or Cardano.
Others would like to experiment with new entrants like Trifecta, DarkMeta and L7 DEX, among others.
Success depends on the ability to navigate the market properly knowing the right crypto assets to invest in.