Some call cryptocurrency digital gold, others believe it’s not worth a dime, or don’t trust it. However, it can no longer be denied that cryptocurrency represents an absolute value. It makes people rich or poor. You can buy, store, sell and simply pay cryptocurrency.
It is possible to earn an incredible amount of money on cryptocurrency simply because it involves extremely volatile and high-risk investments. Fluctuations in the cost of cryptocurrency of 50% per day are no exception.
When you buy a cryptocurrency at a low price and then sell it when the price goes up, you can make a lot of money. There are still many ways to make money on cryptocurrency. In this article, we will tell you the best ways to make money on cryptocurrency and how to do it.
Recommend Binance – the world’s best cryptocurrency exchange.1. Purchase and storage of cryptocurrency
This is the easiest way to earn cryptocurrency. Buy a cryptocurrency that you like and in which you are sure that it will become more valuable in the short or long term and relax.
The great thing is that such investments require very little time and energy, and your investments can generate significant returns in the future. On the other hand, it can happen that your investments cost much less and you lose money.
For example, there were quite a few people who sold Bitcoin in 2014, at its peak at $1,000. At the time, no one dared to assume that Bitcoin was worth 50 times more today than it was in 2014.
There are also many people who sold their Bitcoins in 2021 for $50,000. But who knows how much Bitcoin will cost in a few years – $100,000 or $250,000?
However, buying and storing cryptocurrency for a longer period of time is one of the least aggressive ways to make money on cryptocurrency. However, keep in mind that it is also possible that the part you bought will become much cheaper.
If you want to actively work with your assets, passive cryptocurrency storage (also known as HODL) may not be the best solution for you. In this case, cryptocurrency trading, which we’ll look at below, may be right for you.2. Cryptocurrency Trading
Cryptocurrency trading is very similar to buying and storing cryptocurrency, but the cycle is much shorter. An active crypto-trader often opens and closes several positions per day.
A crypto-trader is essentially looking for a good time to buy or a good time to sell, in other words, a good entry and exit. For example, you have determined the right time to buy a cryptocurrency, the price has gone up, so you can sell it again and make a lot of money.
This way of making money can also be compared to stock trading or Forex trading. The only difference is that cryptocurrency offers the possibility of a greater profit due to strong price fluctuations.
For cryptotrader, it does not matter what the crypto project entails, who participates in it, and what benefits will bring to humanity. Cryptotrader only looks at prices, charts, trading indicators and tries to determine the optimal times to enter and exit the trade. Of course, you can’t just make profitable trades, no one can do it. You need to make sure that profitable transactions have been more profitable.
See also, what tools to use to analyze cryptocurrencies.3. Staking
Staking cryptocurrency is a bit like putting your money in a savings account. You get a certain interest rate on the coins you put into the staking. But why do you get money for staking?
You maintain the operation of a blockchain network, and since the network can use your cryptocurrency to serve and operate the network, you are compensated for it.
4. P2P crypto loans
With P2P crypto loans, you are somehow lending your cryptocurrency to someone else. For this, you are paid interest on the loan, so you can get a good additional income. P2P crypto loans are also known as Yield Farming.
Depending on the duration, the type of loan and the cryptocurrency to which it belongs, P2P crypto loans usually bring in a little more profit than staking. But you risk that someone won’t be able to repay the loan or the price drops and you want to sell the cryptocurrency, but you won’t have access to it and you’ll suffer a loss at the end of the loan.
See also how to buy and sell cryptocurrency on Binance P2P.5. Mining Cryptocurrency
Another popular way to earn-cryptocurrency mining. You use the power of your video card to perform complex mathematical calculations. For every block solved, you get a reward. The more powerful the video card, the faster the blocks are unraveled, and you can earn more cryptocurrency, which can then be sold on the stock exchange.
The main disadvantages of mining are the high cost of electricity needed for the operation of video cards, the constant increase in the complexity of new blocks, as well as the high cost of video cards and specialized equipment for mining, for example, ASIC.
Currently, cryptocurrency mining is a big business and you are competing with huge companies that do nothing but build huge platforms for cryptocurrency mining. Therefore, it is now unlikely to start mining as a private person.
If you still want to start mining, then join the cryptocurrency mining pool to do something together.6. Masternodes
There is not much difference between mining and masternodes, except that during mining you are looking for new blocks and with masternodes you control existing blocks. As a masternode, you make sure that all transactions on the network are verified in real time and that you are compensated for it.
The downside of these gains is that you will have to invest a lot to run masternode. The size of these investments depends largely on the cryptocurrency. This is usually between $50,000 and $150,000. On the other hand, you can earn about 10% of that amount per year, which is pretty good.7. Liquidity pools
Liquidity pools are a relatively new way to invest. With liquidity pools, you help fund the balance of some cryptocurrency tokens. You deposit a certain amount of token and the same amount of stablecoin (for example, USDC). Other users can then use this liquidity to exchange tokens, i.e. exchange one token for another.
Every time someone makes such a transaction, you get a percentage per transaction. The well-known platforms on which you can contribute to liquidity pools are Uniswap and Trustswap.
Also, find out how to choose a bot for cryptocurrency trading. Finding
There are a number of different ways to make money on cryptocurrency. The possible risks and the return of each of them can be completely different.