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You’ve probably heard of cryptocurrency (or crypto, in short form), and are interested in learning how to make money with cryptocurrency. Crypto is one of the hottest investing topics right now and there are news articles all over talking about how people are becoming millionaires by investing in altcoins.
You might have done some research but thought it looked too technical or complicated. We’re here to tell you that it’s not! Anyone can learn how to earn money with cryptocurrency and by the end of this article, you’ll be able to start yourself. We’ll also help you by categorizing the methods based on:
Read on as we walk you through it and cover several great ways of earning an income with cryptocurrency.
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Buy and hold
Buying and holding is the method you’re probably most familiar with when it comes to investing and making money with cryptocurrency: You purchase some sort of asset (like stocks), you let interest build up, and then you eventually cash out.
It’s the same idea in buying and holding with crypto, except you are waiting for the price of your chosen currency to go up so you can sell at a rate higher than when you bought.
This is one of the best and easiest ways to focus on how to make money in cryptocurrency.
For example Bitcoin was worth around $13 in 2013, and at the most peak price we’ve seen so far was nearly $20,000 in 2018. That means if you had just purchased $200 of Bitcoin in 2013, it would have been worth over $300,000 if you sold at the peak price! That’s a 1500x return on your money, nearly unheard of in such short of a time in the stock market. It really shows the power of making an income with cryptocurrency.
If you’d like to know how to make money with cryptocurrency by using buying and holding, we have some articles ready for you so you can get your coins and get started!
While there are MANY different coins out there, we recommend you stick to the 4 mentioned above. These are the safest and have been around for a while. If you invest in a new coin it might be cheap to buy lots of them, but there’s a very high chance the coin could just disappear. Coins that have been around a while don’t have that same risk.
If you’re ready to buy, we recommend that you visit Switchere, PrimeXBT or Coinbase, which has been ranked as the most “beginner friendly” exchange. Visit Coinbase and when you sign up, you will receive $10 in FREE Bitcoin on your first $100 order!
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Buy and hold for dividends
The strategy and currencies above will pay you when you eventually sell at a higher price than when you bought. However, some currencies will actually pay you just for holding them, which makes this a very lucrative method of making money You don’t actually purchase or own the cryptocurrency…you simply hold it and keep it in circulation. Some examples of these coins are:
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This strategy combines the first two we mentioned: you buy a currency, hold it, plan to sell it for a profit at a later time, AND you also receive dividends from just holding it. This is a great secret in making money with cryptocurrency.
Some examples of these cryptocurrencies are:
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When considering how to make money with cryptocurrency, mining is one of the methods that always comes up. Mining cryptocurrency is one of the best ways to make money with altcoins as it’s extremely passive: just invest in the equipment, set it up, and let it run.
But there’s the only possible issue…investing in the equipment. While you can mine cryptocurrency without extremely high end hardware, the better the hardware, the faster it can create more coins for you and the better your chance of actually making money. Mining works by having computers solve complex mathematical problems, and when they solve them, you are rewarded with cryptocurrency.
The thing is that as more cryptocurrency is created, the problems get harder and harder, and so if you don’t have a high end system, it can take a LONG time to solve things. You might also need cooling units, extra electricity upgrades, and more to support all this.
Also MANY different people are trying to solve the same problem at the same time. If your computer is too slow and someone else solves the problems first, you get nothing, so investing in a high end system is almost always needed.
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This method is a bit more advanced and involves looking for patterns in financial trading charts every day. Because cryptocurrency is very volatile in that the price can change drastically over a day, someone who constantly tracks the price over a day can make a very large return on investment by buying some coins in one hour, and selling them an hour later.
We wouldn’t recommend this if you’re a beginner, or if you don’t want to follow charts every single day. If this sounds like you, it would be better to consider the other options. But if you have experience in trading or previous knowledge in crypto, this could be THE way for you to use cryptocurrency to your benefit!
Check our our article: How to Trade Cryptocurrency (Even if You’re a Total Beginner)
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If you’re wondering how to make money in cryptocurrency, you should consider microtasks. These are small services you do for someone and you receive payment in cryptocurrency. You might fill out an online survey, test an app, debug a website, or something similar.
Cointasker estimates that a single microtask will, on average, pay out 0.00001426BTC, or around $0.90 (as of July 2018), for around 10 minutes of work.
Some websites where you can find lists of microtasks that pay out in cryptocurrency are:
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Work for cryptocurrency
As we mentioned in the microtasks section, many employers are happy to pay for work in cryptocurrency. If you work online or have a job that allows you to do so, this is a great way to make an income with cryptocurrency.
Blogs that are specifically dedicated to cryptocurrency are also happy to pay writers who want to work in crypto as well.
Here are some sites you can browse:
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Currency and exchange arbitrage
Cryptocurrency exchanges are simply online platforms that allow you to make accounts, and login to buy, sell, and trade cryptocurrencies. But, the price of a currency in one exchange might be different to that in another, and the prices of all the currencies are also always changing.
By tracking these numbers you can make a profit: You might buy low on one exchange and sell high on another. You could also buy one cryptocurrency and then invest into another that has a lower dollar per coin value.
This way you’d own more coins overall with the hope of the higher number of coins making you a profit compared to if you had stayed with the other coins, and owned less of them.
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You should know that there are various apps and websites that offer bitcoins as a reward for completing a designated task.
These websites or apps are known as bitcoin faucets and there are thousands of them online. The only catch is that the amount of bitcoins they give is very small, and it varies from 100 Satoshis (0.000001 BTC) to 10,000 Satoshis (0.0001 BTC).
The tasks you usually complete range from things like clicking on ads, watching videos, and filling out surveys. Here are a list of bitcoin faucets you can look at.
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If you own a website or business, this might be a good way of making some extra money. In simple terms, affiliate marketing is where you’re paid a commission when someone from your website clicks a link of another company, and purchases one of their products. If the company offers payouts in coins, you can choose this instead of getting paid in cash.
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For strategies like day trading, you need to be looking at charts and your computer constantly, manually buying and selling when you think the time is right. This involves a lot of work using your own brain to come up with predictions based on the data…not to mention staring at complex financial charts for hours on end. When you’re still figuring out how to make money trading cryptocurrency, this can definitely be exhausting and tedious.
As with most things in the world today, this process has been automated in a great way: computers can perform thousands of calculations much faster than you or I, and use algorithms as well as data science to predict crypto pricing strategies.
By investing in a crypto trading bot, you can have something automatically buying and selling at the right time based on thousands of data points instead of having to manually guess or look at a screen 24 hours a day. The bot will do the trading for you.
Here are 3 crypto trading bots you can look into when considering generating an income with cryptocurrency:
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If you are a business, merchant, or freelancer, accept cryptocurrency as payment
While you might search out employers that agree to pay you in cryptocurrency, you might also actually accept payment in crypto if you sell products online. Many online platforms now allow you to put in your cryptocurrency wallet information and have payment sent straight there.
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If you are buying and holding some coins, this might be a great way of making money online. By using several peer-to-peer networks, you can lend out your coins. You can usually earn upwards of a 10% return on your investment when you do this.
However as you know, cryptocurrency is not regulated by any government or official department. It is the same for the lending side and you need to be extremely careful about how you lend your money and to whom.
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A masternode might sound like something from a sci-fi movie, but it is simply a computer that keeps an entire copy of a cryptocurrency’s blockchain available, constantly updated in real time. The blockchain is a digital ledger where any transaction (buying and/or selling) is digitally recorded in chronological order, and seen publicly.
Hosting a masternode is a great choice when considering making money with cryptocurrency. Depending on the cryptocurrency network you host a masternode for, the network pays you a certain number of coins. However, you need to have a minimum number of coins before hosting a masternode, which can range anywhere from 1,000 to 25,000 coins depending on your currency of choice.
Hosting a masternode properly does require some technical knowledge in terms of setting up as server though, so it’s recommended for more advanced users. To learn more about how to setup a masternode, click here.
How to Make Money with Cryptocurrency: Bonus Resources to Get Started
Before you really put a lot of work into trying to make money with cryptocurrency, we recommend you check out the following guides to learn more and have a solid background on the topic. Knowledge is power, after all…and hopefully, wealth.
Buying cryptocurrency is the most basic way to start in the world of coins. Even if you don’t plan on buying crypto, we recommend you read this article and understand how to buy crypto because it will teach you a lot about how cryptocurrency works.
While you can just buy cryptocurrency, you might be wondering: what strategies should I use? Do I have to declare my crypto portfolio for taxes? How do I keep my coins safe? In this article, we walk you through the answers to all of these questions and more.
Cryptocurrency is all digital, so you don’t really store it in a traditional bank. Instead, you have your own secure digital wallet where your coins are held. The wallet could be a file on your computer, a USB stick, or even printed out and noted as a barcode on paper for access. You’ll need a wallet to transfer any coins you make, so we recommend you read this article and set up a wallet with any coins you’re interested in.
Here’s a quick recap of all the methods you can use to make money with cryptocurrency:
While we talked about some more advanced methods, getting started doesn’t have to be difficult and you can get started today. You can start with a small investment and always increase it later on. By following this guide and using the methods we’ve talked about, you’re now well versed on how to make money with cryptocurrency, get in on the wave of new investments, and start making money yourself! For more details on cryptocurrency and how to use it, check out our full guide to cryptocurrency.