One of the main reasons people get really deep into the cryptocurrency world is that they want to make money. They want to leverage cryptocurrencies and their various use-cases with the intention of making a profit.
Investments like cryptocurrencies have a reputation for being some of the most volatile investments out there, which could result into a 1000% or higher return overnight, for example. However, investing and hoping for such kind of scenarios isn’t the only way to make money with cryptocurrencies, and surely not the smartest.
Today, we will be exploring multiple ways through which you can make crypto a source of additional income.
Quick Summary for Fast Readers
- Earning money with cryptocurrencies can go beyond just investing in cryptocurrency tokens and hoping that they go up in value.
- There are numerous ways through which you can make money with crypto, such as staking and interest accounts, mining and mining pools, trading, affiliate marketing, yield farming, liquidity providing, lending, arbitrage, and some more.
- You can choose your favorite method or combine more of them, and as your capital grows, so will your opportunities when it comes to having more ways through which you can make money with cryptocurrencies.
- There are many cryptocurrency exchanges and many cryptocurrency blockchains, so make sure that you do your research before you decide where you want to take these ideas and put them to practice.
Can You Earn Money with Cryptocurrencies?
You can absolutely earn money through leveraging cryptocurrencies, especially with the various developments surrounding decentralized finance. All of this goes far beyond just purchasing a cryptocurrency token and holding onto it; however, that is still a viable option. Let’s dive in and explore how exactly you can make money with Cryptocurrencies in 2022.
7 Ideas on How to Make Money with Crypto in 2022
Bitcoin is the largest cryptocurrency token based on market capitalization. After all, it came first and genuinely introduced the world to what cryptocurrency tokens are all about. It led to a wave of altcoins, which are just any coin that isn’t Bitcoin, and in this article you’ll learn how those digital coins can work for you and generate profit. That being said, there are many ways through which you can make money with different Crypto coins, so let’s go over 7 of them.
- Staking & Interest Accounts
Staking Bitcoin gives you much more profit than just letting it sit in your cryptocurrency wallet. By staking your crypto, you can earn a small extra amount of that currency on top of your holdings, with an annual interest from staking hovering around the 5% to 10% range. Keep in mind that staking works for blockchain networks and tokens that use the Proof-of-Stake consensus model, and as Bitcoin uses Proof-of-Work instead, you might need to trade it for another cryptocurrency asset based on PoS first in order to start staking and earning interest, think of it along the lines of dividends. Kraken has this as an opportunity.
- Mining and Mining Pools
Bitcoin is a Proof-of-Work (PoW) token, which means that you can mine it through the usage of powerful hardware and electricity, where you can essentially earn newly mined BTC tokens each time you confirm transactions. However, mining alone can be difficult, and as such, you could join Bitcoin mining pools. These pools are networks of distributed Bitcoin miners that cooperate to mine blocks together, where the Bitcoin is then distributed based on each entity’s contribution to the pool. This means that you can get Bitcoin without investing too heavily in the necessary (& expensive!) hardware.
Crypto trading is essentially you speculating on the movements in the cryptocurrency’s space. This traditionally involved buying an asset at an exchange, hoping that it would rise in value and then sell for a profit; however, it has evolved to the point where cryptocurrency traders typically use derivatives to speculate the rising and falling prices of the asset in order to make the most out of its volatility. You can engage in trading on cryptocurrency exchanges such as DXOne.
- Affiliate Marketing
There are a variety of different affiliate opportunities within the cryptocurrency space, and you can find the best Bitcoin and Crypto affiliate programs with a bit of research with ease. Many exchanges out there will typically offer lucrative rewards in their affiliate marketing programs, and due to the fact that they are popular, they also use their programs to monetize their content. Many affiliate programs offer fixed commissions on every lead generated through their referral links.
- Yield Farming, Liquidity Providing, and Lending
Yield Farming is essentially a process where you stake your cryptocurrencies or provide liquidity to a pool, where people can borrow these tokens that you provide and pay you an interest rate for them. Think of this process as taking a loan through a centralized exchange. As a borrower, due to the fact that this is conducted in decentralized finance (DeFi), you are not required to provide anything aside from collateral against that you borrow.
These tokens that you lend through a yield farming protocol can be used for trading or be further invested for leveraged yield farming. Annual yield through this method is in the 15% range annually.
- Crypto Arbitrage
Crypto arbitrage is a complex concept, however, put into simple words, it is a way through which you can generate profit from the differences in a token’s price across multiple exchanges. This is due to the fact that cryptocurrencies can be priced differently on different exchanges, and arbitrageurs can trade between exchanges. However, there is risk associated with it, such as slippage, price movement, and transfer fees.
HODling is a strategy within the cryptocurrency space where you essentially buy your most favorite cryptocurrency that you fundamentally believe in and hold onto it for a prolonged period of time, despite its price fluctuations. This means that you are not moving or trading the cryptocurrency asset no matter where the price swings for a long period of time.
There are many ways to earn passive income just by leveraging the different use-cases for Bitcoin and other cryptocurrency tokens. We have covered just seven ways here; however, keep in mind that there are many more ways through which you can use your cryptocurrency tokens. This way, the tokens aren’t just sitting there in a cryptocurrency wallet but are being put to work through which you are generating real income. Keep in mind that all of this has some level of risk involved with it. However, this can be said of any investment.