Bitcoin, as a cryptocurrency, has been subject to mainstream debate for quite some time now. People analyze its past and speculate about its future for a wide variety of reasons - some people want to know the history of cryptocurrencies, while others are curious about how to make money with Bitcoin.
Whatever your reason would be, in this guide, I'll talk about the different ways how to profit from Bitcoin - but first of all, I'll ponder on why Bitcoin is so popular in the first place. Then, when you understand the history of this cryptocurrency’s emergence and rise to power (or at least the super short version of it), I'll explore its profiting opportunities.
Note: It doesn't matter if you make a smart investment and earn a lot of money from it if you have an unsafe wallet that can be easily hacked. That said, choose a reliable Bitcoin wallet. The most recommended options include Ledger Nano X and Trezor Model T.
Carlos Diaz
PhD Researcher in Business Innovation at RMIT University
How do you envision the future interaction between blockchain and traditional financial systems?
Nowadays, the traditional financial system is already developing blockchain-based solutions to enhance their own operations. These mostly focus on consortia-based solutions that agglutinate several institutions interested in developing common solutions where trust and collaboration are essential. In the future, I see a completely tokenized traditional financial system where blockchains are the databases sustaining the overall operations. Also, I see a progressive integration between the traditional financial system with decentralized finance (DeFi) and the cryptocurrency sector.
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Table of Contents
- 1. Bitcoin History: The Short Version
- 1.1. The Fall of Bitcoin?
- 2. How to Make Money With Bitcoin?
- 2.1. Back to the Basics: Buy and Hold Bitcoin
- 2.2. Make Money With Bitcoin Trading
- 2.3. Accept Payments in Bitcoin
- 2.4. Participate in Bitcoin Mining
- 2.5. Invest in Bitcoin-Related Startups
- 2.6. Make Money With Bitcoin Lending
- 2.7. Bitcoin Affiliate Marketing
- 2.8. Earn Rewards Through Bitcoin Faucets
- 3. Which Method is the Best for You?
- 4. Conclusions
Bitcoin History: The Short Version
Bitcoin was created back in 2009 by someone (or some group of people) known by the pseudonym of Satoshi Nakamoto. At the time that it saw the light of day, nobody had even heard of cryptocurrencies, let alone encountered one. So, no one was yet wondering how to make money with Bitcoin.
Bitcoin's infant and teenage years were pretty rough - it failed to gain significant traction and attention, even though its prices fluctuated for what (at that time) seemed quite a bit.
Finally, at the beginning of 2017, Bitcoin breached the benchmark of $1000. In just a matter of a year, it managed to almost reach the $20,000 checkmark.
Needless to say, this was huge - everybody either stood with their chins reaching the floor or poured everything they had into Bitcoin - it seemed like an unstoppable force that kept on increasing its momentum every single day.
And, if you’ve recently checked the Bitcoin price charts, you can see that it is, indeed, an unstoppable force. Even though it did fluctuate quite a lot throughout the years, as of April 2023, it still stands strong at the top based on its market cap and price.
The Fall of Bitcoin?
At the beginning of 2018, Bitcoin’s price was around $11,000, then reached a shocking low of almost $6000. This was the time people questioned the concept of making money with Bitcoin. What caused a crash of this magnitude? Well, there were many speculations.
People who often look at how to make money with cryptocurrency will probably know what the Bitcoin price chart looked like then:
Does it, perhaps, remind you of something? A… tooth, maybe?
This type of diagram is called a “shark tooth” diagram. It means that a cryptocurrency’s (in this case - Bitcoin’s) price rose and fell so fast that the path it took on the chart resembles a sharp shark tooth.
This is also called a “burst bubble”. A famous economist was even quoted saying that Bitcoin was the “biggest bubble burst in history”. Reasons behind this were speculated to be the built-up hype, lack of support for the blockchain, market manipulations and many, many more.
Whatever the case might be, even though many speculated that it could be the great fall of Bitcoin, it managed to recover from it. After that, it had a few more even sharper "shark tooths" in 2021 and 2022. This time, though, the Bitcoin price peaked at $60,000, and even went a bit over it.
Talking about the current price of Bitcoin, as of April 2023, it fluctuates at around $28,000. Compared to 2018, it surely increased a lot. Though, compared to the prices Bitcoin managed to reach in 2021 and 2022, it could be said that Bitcoin hasn't reached its full potential yet.
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How to Make Money With Bitcoin?
So, now that you know a couple of things about the rise and fall of Bitcoin, we can finally move on to the HOW to make money with Bitcoin part.
There are quite a few methods that those who dream to make millions with Bitcoin can use. However, in this guide, I’ll cover just the main ones - if I had to list them all, this guide would be at least three hundred pages long!
The list isn’t composed in any specific order. Some methods work better (or faster) than others, but - generally - it depends on the person.
Back to the Basics: Buy and Hold Bitcoin
No, I’m not joking.
There are huge groups of people who “invest” in Bitcoin by simply buying it. This is a risky method, of course, but probably the simplest one to perform.
There are a couple of types of such investors. Some people just buy a certain quantity of the coin and forget about it for a year… or ten. These people usually have no real intention to profit short-term - they often believe in the successful future of cryptocurrencies and hope that their investment now will one day bring them a tenfold profit.
Another type of Bitcoin investors are the people who do loads of research, read all of the available predictions on how to make money with cryptocurrency, and spend weeks analyzing data and statistics. These people tend to have a very specific time frame in mind - most of the time, they are looking to invest short-term and just need to know when to do it.
Also, these investments tend to be smaller when compared to the long-term ones - after all, people invest having done a ton of research beforehand, but if their investment fails, they could just move on to the next time frame.
If you’re thinking about how to make money with Bitcoin or how to make money with cryptocurrency in general, buying Bitcoin can be a great starter - or a disastrous one. It can make you huge amounts of money real fast or might drive you to the brink of debt. It all depends on one single factor - the amount of research you’ve done beforehand.
Tip: You shouldn't invest the amount of money that you cannot handle to lose.
| Difficulty | Return |
| Easy | Depends on the amount of Bitcoin you buy, how long you hold it, and its price changes. E.g., During the Bitcoin price peak in 2021, its price increased 6 times. |
Make Money With Bitcoin Trading
So, you bought Bitcoin, but you don't want to hold onto it for 10 years because you want to "make millions" with Bitcoin now. Remember the short-term investors I mentioned in the previous chapter? That's who you would be if, instead of holding onto Bitcoin, you decided to trade it.
How does it work? Essentially, you analyze the market, inspect charts, and evaluate external factors to find the right time to buy and sell Bitcoin within short windows. This way of making money with crypto is probably the fastest one, but also one that has the highest risks. Though, there is a variety of different trading methods.
One of which is day trading, which is by far one of the most popular ones (and probably one of the hardest ones). With this type of trading, you buy and sell Bitcoin whenever its price (or the prices of assets around it) changes. To find the perfect moment, you essentially have to monitor the market non-stop.
Another technique is trend trading. This type of trading is based on making decisions according to the market trend. How does it work? In a nutshell, you would open long-term positions during a bullish market trend, while during a bearish market trend, you would opt for short-term positions.
Then, there also is Bitcoin hedging. It's a method in which you open trades strategically to hedge risks on your owned positions. You seek that a gain or loss in one position gets offset by changes in the value of the other position. Trading of this kind is typically done when the market is moving against you.
Furthermore, another popular way of trading is leverage trading. It includes borrowing funds to trade in higher sums than your own funds allow you. Some platforms allow up to 200x leverage for Bitcoin trading (for example, Huobi). However, do keep in mind that leverage trading is very risky (the higher the leverage, the riskier it gets).
Of course, there are many more trading techniques. However, the one thing that applies to all of them is that you must do extensive research and always stay up to date with the market, trends, and external factors.
| Difficulty | Return |
| Hard | Depends on many factors, including the method of trading, the amount of funds invested, crypto market fluctuations, and so on. It could either bring amazing returns or great losses. |
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Accept Payments in Bitcoin
Have you heard of Fiverr? It’s a site where people pay $5 for some sort of a service done by other freelancers. Now take this same concept, but imagine Bitcoin coming into the place of USD.
All you need to do for this method to work is as follows:
- Think of a skill you’re good at. This can frankly be anything - starting from copywriting and digital marketing to painting or singing. Pick your strongest quality (or qualities) and think of ways you could monetize them.
- Create a cryptocurrency wallet. If you’re reading a guide on how to make money with Bitcoin, chances are this step seems obvious, and you’ve done it long ago. But just in case, let this serve as a reminder - a crypto coin wallet holds your cryptocurrencies safe and ready to use, just like a wallet for your physical money. If you still haven’t got one - research and create it ASAP! In case you're interested in finding the most secure cryptocurrency wallets in the market, check out Ledger Nano X and Trezor Model T.
- Find a way to charge people. A good place to start is to offer your services on online forums and marketplaces, stating that you only take payments in the form of Bitcoins or other cryptocurrencies. Do this long enough, and you might eventually want to create a designated website for this same purpose and teach others how to make money with Bitcoin.
If you’re thinking about how to profit from Bitcoin (and if you’re serious about it), doing research is going to be unavoidable. Without it, it’s like trying to drive a car at night with the headlights off - sure, you MIGHT make it, but the chances are not worth the risk.
| Difficulty | Return |
| Medium | Depends on the price of your services and the price of Bitcoin at the moment of payment. If you get paid in BTC when its price is lower but then it rises, your funds will rise without needing to put in any more work. |
Participate in Bitcoin Mining
One of the most popular ways how to make money with Bitcoin is Bitcoin mining. There can be two forms of mining - personal mining or cloud mining.
If you want to mine individually (meaning, with your own mining rig), it might not be the best way how to make money with Bitcoin. Besides, Bitcoin is considered to be one of the tougher cryptocurrencies to mine since it’s a subject of mainstream success, and a lot of people want to pitch into the hype, yet there’s a limited supply of it.
A single rig, as good as it could be, might struggle to produce significant profits, especially when you consider the electricity and maintenance prices. So, it's definitely not the best way to make millions with Bitcoin.
Cloud mining, however, has become very popular over the last few years. It’s a great alternative when it comes to mining because you don’t need to buy any hardware or software, assemble or even DO anything - all you need to do is pay a one-time fee for a contract, and that’s it!
Usually, at the end of every month, you’ll receive your earnings. The amount will be based on your plan of choice and the electricity bill at the facility that the cloud mining service is based on.
Overall, cryptocurrency mining is a very popular method for people searching on how to make money with Bitcoin. It does require some knowledge and expertise in the field to be able to perform it successfully (especially if you want to build your rig), but the results are definitely worth the effort.
| Difficulty | Return |
| Easy (cloud mining) / Hard (personal mining) | As of April 2023, a miner is rewarded 6.25 BTC per block. However, block rewards are halved every 210,000 blocks. The next Bitcoin halving is planned to take place in 2024 (the block reward will be reduced to 3.125 BTC). Besides, take into consideration electricity bills, the price of your personal mining rig, or the fee paid for your cloud mining plan. |
Invest in Bitcoin-Related Startups
So, I won't be talking about the buying-bitcoin-and-then-selling-it type of investing.
There are quite a few choices you have when it comes to investing in Bitcoin. You could make money with Bitcoin by investing in startups, companies, stocks, or even blockchain development itself.
Blockchain-based startups are a very popular choice when it comes to investing in a cryptocurrency-related field. Already, some notable startups have made it into mainstream success (i.e. Brave’s Basic Attention Token).
You would need to do some digging and find out the next best thing, but if you’d be right and invest in the startup while it’s still in its early days of infancy, you might just hit the jackpot and grow your profits to the roof.
Companies that deal with Bitcoin or blockchain development (or research) are also a good option for investments. You’d have to look over their info - whitepaper, their goals and work ethics, results, statistics, etc., and if their overall view seems attractive, you could think about investing in their projects or the company itself.
You should be careful with investments, though - especially when it comes to cryptocurrencies. It is no secret that the cryptocurrency market is a very unpredictable place.
Always do your homework and research the objects that you plan to invest in, or else the question of “how to make money with Bitcoin?” might turn into “how to get out of debt (no Bitcoin)?”.
| Difficulty | Return |
| Medium | Just like with any type of investing, the returns depend on the project you invest in and how much you invest in it. If it is successful, your funds could skyrocket. If not, however, your investment could turn out to be useless. |
Make Money With Bitcoin Lending
Another way of earning money from Bitcoin is by lending it to others. Crypto lending works similarly to how traditional lending works. However, it is quite a new way of earning from crypto and quite a profitable one, I might add. Though, it also carries pretty high risks.
But how does it work? Essentially, you choose a crypto lending platform (of which there is a huge variety) and deposit your Bitcoin into lending pools. As users borrow your funds, you generate interest. Most lending platforms offer even up to 15% APY.
Note that, usually, borrowers have to use collateral to borrow crypto. However, on some lending platforms, they don't have to do that. This makes lending extremely risky. So, always check out how lending on the platform in question works.
Some of the most popular lending platforms include Binance, Aave, Compound, Crypto.com, and so on.
| Difficulty | Return |
| Medium | Up to 15% APY |
Bitcoin Affiliate Marketing
In recent years, affiliate marketing has become a very popular technique, especially due to the rise of social media. While it's widely used for various products and services, it is also pretty popular in the crypto world.
The concept is very simple: you join an affiliate program for Bitcoin (or other cryptocurrencies, for that matter), promote its products or services, and, if you successfully attract new visitors, you can earn commissions for each converted sale.
Now, this method is perfect for you if you have social media channels like YouTube, Instagram, TikTok, or others (and, of course, if you already have an established audience there). However, if you're not into the whole social media bubble, you can still participate in affiliate marketing by referring your friends and family members to the platform.
Though, do note that you must choose a legit affiliate program. So, make good research beforehand. Some of the most popular platforms that offer crypto affiliate programs include Binance, Coinbase, Ledger, and KuCoin, among others.
| Difficulty | Return |
| Medium | Returns depend on the rules and commission regulations of the affiliate program in question. It can be 5% or even go as high as 45%. |
- A very well-known crypto exchange platform
- More than 500 different cryptos available
- Two-factor authentication
- Over than 100 different cryptocurrencies available
- Strong security
- Small withdrawal fees
- Secure and reliable
- Low fees
- A good amount of fiat currencies accepted
- Reputable exchange
- Multiple fiat currencies are accepted
- Relatively low trading fees
- Anonymous trading
- Secure
- Supports a variety of cryptocurrencies
- Easy to use
- Low fees
- Good security
Earn Rewards Through Bitcoin Faucets
Now, faucets are a great way to earn Bitcoin or other assets without investing money. That's right - you don't have to spend any money! I'll tell you what you have to do in a few seconds, but first, let me tell you what a faucet is.
Put simply, it is a reward distribution program on a website or application that rewards users with crypto for successfully completing particular activities like watching videos or doing other simple tasks.
The way of earning Bitcoin through a faucet is somewhat similar to airdrops or bounties. These also provide users with free tokens for completing certain tasks. However, they are not the same thing!
Now, of course, you surely won't make millions with this way of earning Bitcoin. However, who doesn't like freebies, right?
| Difficulty | Returns |
| Easy | As always, returns depend on the project in question. However, people usually earn only a fraction of Bitcoin through faucets. |
Which Method is the Best for You?
Now you know the main ways you can make money with Bitcoin (of course, there are many more). Since your brain might be a bit scrambled from all this information, and it's hard for you to decide which method is the best for you, let me help you summarize everything.
If you want an easy way to earn Bitcoin, you can buy and hold Bitcoin, participate in cloud Bitcoin mining, or earn free BTC from crypto faucets. Though, do note that the profit you can get from each method is different. Bitcoin faucets, for example, will provide you with just a small fraction of Bitcoin, while cloud Bitcoin mining or holding can bring you pretty high returns.
Furthermore, suppose you're searching for a profitable but medium-difficulty way of making money with Bitcoin. In that case, you can accept payments in Bitcoin, invest in Bitcoin-based startups, participate in Bitcoin lending, or join affiliate programs.
Lastly, if you're searching for a highly profitable way to make money with Bitcoin and you don't mind it being difficult or really risky, you can make money with Bitcoin trading (which is probably the most popular way) or participate in individual Bitcoin mining.
Though, note that there is a "but" for these methods being highly profitable. Yes, they can be, but they can also bring great losses if you don't play your cards right.
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Conclusions
There are various methods of making money with Bitcoin, both directly and indirectly. Direct methods would be buying the cryptocurrency or trading it, while an example of an indirect method would be crypto mining. It's only natural if you get confused at the beginning - cryptocurrencies are a tough nut to crack!
As I’ve stated in the beginning, the preferences for any of these methods lie solemnly on the person using them. If one person finds a cloud mining a gift sent from above, another could think it’s all a major scam and want to do everything on his or her own.
One piece of advice: RESEARCH. Do a lot of research. If you put in the effort, you'll pick the right method in no time. Forums are a great place to start. Join Facebook groups, and participate in their chats. Don't be afraid to ask questions.
Even though cryptos have been around for quite some time now, they are still a mystery to many people. Every day there are new analyses, statistical info and even new coins that enter the community and the market. It is no easy feat, but if you do decide to follow through and try one of these methods to make money with cryptocurrencies (or, more specifically, Bitcoin), I wish you the best of luck!
Just remember, if you decide to make a long-term investment, it's crucial to not only choose reliable crypto exchanges (such as Binance or Bybit) but also keep your cryptocurrencies in secure wallets, such as Ledger Nano X and Trezor Model T. They're both hardware wallets and keep your private keys offline.
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