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Everyone knows that you can make money by mining bitcoins and investing in new cryptocurrencies, but those are not the only ways. CryptoCurrency is a whole universe of its own, and there are more ways of making money from these encrypted hash functions than you think.
With the increase in the number of crypto exchanges in the market, ways of making money with crypto have also increased.
Here are 5 of the lesser-known ways to help you make quite a bit of money if you try.
1.Maintain a Diverse Crypto Portfolio
One of the things that relatively novice crypto investors often overlook is the need to maintain a diverse crypto portfolio. Anyone with experience in investments of any kind can tell you that the more diverse your portfolio is, the more chances of making money and preventing loss.
If you have a diverse crypto portfolio, and you lose on one of the currencies, you can profit from the others. This is because the value of all the cryptocurrencies is interlinked in a complicated fashion, and the change in the value of one creates a chain reaction that affects all others.
It is true that having more currencies in your portfolio decreases the chances of exponential growth. Still, it guarantees a steady stream of income and lower chances of catastrophic losses.
Become an Insider
You need to keep your research up to date and keep looking for currencies that have the potential to go up.
Another way that you can make money with crypto is by referring a currency to the people you know. It is, by far, the easiest way to make money with crypto. Many coins, primarily new and emerging ones, offer this deal. All you need to do is send a link to the people you think might be interested in cryptocurrency. When that person signs up on that cryptocurrency platform, you get the currency in exchange. It is that easy, literally free money.
Some cryptocurrencies even offer you a share in the profits or investments that the person makes over their tenure with the currency.
Trading is Better than Investing
Just like the stock market, there are two formats that you can follow for making money from cryptocurrency, trading or investing. Investing in crypto is a long-term process. You buy a currency and hold it with the hope that it will go up in value. If it does go up, you make a profit. This kind of crypto dealing is a passive income where you don’t have to do much once you’ve bought the currency.
Crypto trading, on the other hand, is a process where you actively buy and sell cryptocurrencies. The buying or selling decisions are based on the currencies’ speculative values, and you can make numerous ‘trades’ in a day.
If you want to make crypto your primary source of income, or the thing that you do full-time, trading is the way to go. For the ones who need a side hustle, investment in cryptocurrencies is the best option.
One of the most prominent ways people are making money these days with cryptocurrencies is by lending cryptocurrencies. Many people invest in crypto lending nowadays because it is easier and safer than traditional peer-to-peer lending.
Here’s how it works:
- Investors lend their money (in cryptocurrency) to Decentralized Finance (DeFi) platforms.
- The DeFi platforms pay the lenders a weekly or monthly interest on their money. This can range anywhere from 6% to 17%.
- The DeFi platform lends money (in currencies like USD) to the borrowers.
The natural question here is, what is the guarantee that the borrower will repay the loan? To ensure that the loan is repaid, the DeFi platform facilitating this arrangement requires the borrower to stake some of their money (in cryptocurrency) as a guarantee. This can be between 25 to 50% of the borrowed amount.
The benefit for the borrower, in this whole arrangement, is that they can get money on an urgent basis without having to liquidate their crypto assets in an emergency. For example, if a coin has gone down in value, and someone who has invested in it needs money, they can avoid selling it by getting a loan from a DeFi platform.
Accepting Cryptocurrency Payments
This is a way of making money from cryptocurrency, even if you are not a crypto trader or investor. If you have an online or brick-and-mortar store, all you need to do is sign up for a crypto wallet and start accepting crypto payments.
It has two benefits. Firstly, people who don’t want their money traced feel comfortable with cryptocurrency transactions, and that can increase your sales. Secondly, if the currency you receive the payments in goes up, you’ll earn money.
Already around 2,300 stores in the US accept payment in cryptocurrency, and the trend is only increasing.
In addition to making money if the currency goes up in value, this can also give you the chance of venturing into other areas where you can make money with cryptocurrencies like trading and lending.
Cryptocurrencies are a whole world of their own. While most people think that the only way to make money with these is by buying a currency and hoping for the value to go up, there are many other ways that you can use to earn money using cryptocurrencies. These include maintaining a diverse cryptocurrency portfolio, referrals, trading, staking and accepting cryptocurrencies as a payment method on your store.
The most important thing to be mindful of in the crypto game is to keep an eye on the ever-changing crypto market. Many things can make the market move, and you need to be aware of them before you invest or make a trade.
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