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How to Make Money with Cryptocurrency? 9 Most Popular Ways

Crypto has taken the financial world by storm, presenting people with unique opportunities to expand their earnings. Luckily for you, I'm here to tell you about the top ways of how to make money with cryptocurrency.

From trading to engaging in airdrops and giveaways, there's a multitude of avenues to explore. Just let's be clear from the start – I'm here to provide you with tips on how to make money with cryptocurrency based on what other crypto enthusiasts favor, not to give you financial advice.

My advice is this: as you venture into the crypto world, exercise caution and only conduct transactions on reputable crypto exchanges, like Binance, Kraken, or Bybit.

Key Takeaways

  • There are multiple ways to make money with crypto, including trading, staking, mining, yield farming, and more;
  • If you want to learn how to make money with crypto, it's important to think about your risk tolerance, goals, knowledge, and time availability;
  • Building a diversified cryptocurrency portfolio can help mitigate risks and maximize potential returns.
What is Polkadot in Crypto? (DOT Animated Explainer)

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How to Make Money with Cryptocurrency?

You've probably heard stories of people striking it rich with Bitcoin, Ethereum, or other digital assets. After that, you may have wondered how to make money with cryptocurrency, which is totally understandable.

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Well, there are actually many ways to make money with crypto, so let's cut to the chase and begin exploring them.

But keep in mind that the cryptocurrency realm is dynamic and ever-evolving, and as with any investment, it carries inherent risks. Before making any decisions, it's crucial to DYOR and thoroughly understand the intricacies of each method listed here.

Trading

In a cryptocurrency degree program, trading would be essentially a 'How to Make Money with Cryptocurrency 101' class. It involves buying and selling cryptocurrencies to turn a profit, much like traditional stock markets.

While there are many trading options, let's talk about how to make money trading crypto via two core methods: long-term and short-term trading.

How to make money with cryptocurrency: cryptocurrencies on a candlestick chart.

Long-term trading means holding onto assets for extended periods, while short-term trading involves quick buy and sell decisions within a few minutes or a couple of weeks. Each method has its rules, challenges, and rewards.

Your choice will depend on your goals, risk tolerance, and the time you can commit. Whether you seek steady growth or quick gains, I'm here to tell you a bit about how to make money trading crypto and make your assets work for you.

Long-Term Trading

If you want to learn how to make money trading crypto, long-term trading is a strategy worth keeping in mind. It's all about patience and a belief in the potential of digital assets. So, let's explore how long-term trading can help you grow your wealth.

PROS CONS
Potential for substantial gains Exposure to market volatility
Less stressful than short-term trading Funds may be illiquid for an extended period
Tax benefits with lower capital gains rates Requires extensive research

Table: Pros and cons of long-term trading.

Long-term trading involves buying cryptocurrencies and holding onto them for an extended period, often years. Long-term traders focus on the fundamental value and the potential of a cryptocurrency.

The key to success in long-term trading is thorough research.

You need to choose cryptocurrencies with strong fundamentals, real-world use cases, and a promising future. Look for projects with a solid team, a clear vision, and a roadmap for development. Projects like these will usually be listed in trusted CEXs like Binance, Kraken, or Coinbase.

Once you've bought a cryptocurrency, it's recommended to store it in a secure crypto wallet, preferably a hardware one (such as Ledger Nano X). Then, just sit back and watch your investment grow over time.

Long-term trading is not a get-rich-quick scheme, but it can be a reliable way on how to make money trading crypto in the long run. As with any investment, there are risks involved, so be sure to employ risk management strategies.

Short-Term Trading

Short-term trading is an exciting approach within the cryptocurrency realm, allowing investors to capitalize on rapid market shifts and potentially secure quick profits. Thus, let's delve into the foundations of short-term trading so you can understand how to earn daily from cryptocurrency by employing this strategy.

PROS CONS
Potential for quick profits High risk
Active engagement Stress and emotional pressure
Development of technical skills Market timing challenges

Table: Pros and cons of short-term trading.

The essence of short-term trading involves the swift buying and selling of cryptocurrencies, often within hours or even minutes (though it could also go up to a couple of weeks).

To successfully navigate this terrain, however, there are a few things you must consider.

For one, cryptocurrencies are renowned for their price volatility, making them a magnet for short-term traders. The goal is to learn how to earn daily from cryptocurrency trading and leverage these price fluctuations, but it's vital to acknowledge the inherent risks.

While short-term trading can yield profits, it's not without its challenges. The cryptocurrency market is known for its unpredictability, so losses are a real (and common) possibility.

Therefore, mitigating risks is paramount. Setting stop-loss orders is a crucial step to safeguard your investments. Also, never invest more than you can afford to lose when partaking in short-term trading.

To learn how to earn daily from cryptocurrency, it's also crucial to acknowledge that achieving consistent profits demands a high level of dedication and knowledge. You must determine if this path will fuel your enthusiasm for learning and investment, or if it may lead to exhaustion and overwhelm.

How to make money with cryptocurrency: a person analyzing charts.

Moreover, technical analysis tools, such as charts and indicators, play a pivotal role in guiding short-term trading decisions. They assist in identifying potential entry and exit points in the market.

Besides, staying well-informed is your ally. Be vigilant about the latest news and events that could sway the cryptocurrency market. Timely information can trigger sudden market shifts, impacting your short-term trading decisions.

On top of that, practice is obviously essential. Consider starting with a demo account or a modest investment to hone your trading skills. Learning by doing is a valuable way to gain experience in the dynamic realm of short-term trading.

Overall, figuring out how to make money from cryptocurrency short-term trading demands a robust strategy, disciplined execution, and an unwavering commitment to your goals. Short-term trading is a thrilling endeavor, but it's essential to DYOR, so you approach it with caution and diligence.

Staking

Cryptocurrencies offer various earning opportunities, and one of the most popular ones is staking. If you've been wondering how to make money from cryptocurrency staking, wonder no more.

PROS CONS
User-friendly Risk of loss
Passive income Lock-up periods
High potential returns Penalties

Table: Pros and cons of staking.

Staking is a way to earn passive income by participating in the validation process of certain blockchain networks[1]. It's like depositing your money in a savings account, but with the potential for much higher returns.

When you stake your cryptocurrency, you essentially lock it up as collateral to support the network's operations. In return, you receive rewards in the form of additional tokens. Staking helps secure the network and validate transactions, making it an essential part of many blockchain ecosystems.

To start staking, you'll need to choose a cryptocurrency that supports this feature. Not all cryptocurrencies can be staked, though, so do your research.

How to make money with cryptocurrency: ETH staking on Binance.

Once you've selected a suitable cryptocurrency, you can use a wallet or platform that supports staking, like Binance, Bybit, or Kraken. Most exchanges and wallet providers make staking relatively straightforward, so you don't need to be a tech expert to get started.

The rewards you earn through staking can vary, and it largely depends on the network, the amount you stake, and the duration of your stake. Some networks offer higher rewards for longer lock-up periods, while others have more flexible options.

Staking can be an excellent way to put your idle crypto assets to work, but it's important to remember that it comes with some risks. The value of the cryptocurrency you stake can fluctuate, and there may be penalties for early withdrawal. So, as with any investment, it's essential to do your homework and make informed choices when staking your cryptocurrency.

Yield Farming

Yield farming is an exciting way of how to make money from cryptocurrency. It involves putting your crypto assets to work, allowing them to generate passive income for you. In simple terms, it's like earning interest on your digital money. So, how does yield farming work?

PROS CONS
Passive income High risk
Participation in platform governance Complex, especially for beginners
Diversification Impermanent loss potential

Table: Pros and cons of yield farming.

Well, it's all about providing liquidity to decentralized finance (DeFi) platforms. In DeFi, various financial services are offered without intermediaries like banks. Instead, smart contracts on the blockchain handle everything.

To start yield farming, you need to invest in a pool of assets, usually involving two different cryptocurrencies. These pools are typically hosted on decentralized exchanges (DEXs) like SushiSwap. By contributing your tokens to these pools, you're helping to facilitate the trading of these assets.

In return for your contribution, you receive rewards in the form of fees and, often, governance tokens. These governance tokens allow you to have a say in the development of the platform, making you a part of the community.

If you want to know how to make money from cryptocurrency yield farming successfully, note that choosing the right pool is the key, because the returns can vary widely. Be cautious of the risks, though, as the crypto market can be volatile, and smart contract vulnerabilities are not uncommon.

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What is a Liquidity Pool in Crypto? (Animated)

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Lending

Lending your cryptocurrency can be a smart path on how to make money with cryptocurrency. It's a relatively simple concept that involves loaning your cryptocurrency to others in exchange for interest.

PROS CONS
Passive income Risk of borrowers not repaying
Diversification Volatility
Choice of duration Regulatory challenges

Table: Pros and cons of crypto lending.

When you lend your cryptocurrency, you're essentially providing it to someone else, like a peer or a platform, for a specified period. In return, they pay you an agreed-upon interest rate. This rate can vary depending on the cryptocurrency and the lending platform you choose.

Lending can be an attractive option because it allows you to earn passive income without actively trading. It's a bit like putting your money in a savings account, but with the potential for higher returns.

To get started, you'll need to find a reputable lending platform or service like Binance Lending or KuCoin Crypto Lending. Many cryptocurrency exchanges and peer-to-peer lending platforms offer lending services. Make sure to do your research and choose a platform that suits your needs and offers competitive interest rates.

How to make money with cryptocurrency: crypto lending on KuCoin.

Once you've selected a platform, you can decide which cryptocurrency you want to lend and for how long. It's essential to assess the risk associated with lending, as cryptocurrencies can be volatile. Diversify your lending portfolio to spread the risk.

Lending your cryptocurrency can be a viable strategy for those looking into how to make money with cryptocurrency. However, there are some risks associated, like the fact that a borrower might not repay you, or the regulatory challenges you might face.

Thus, remember to do your due diligence, stay informed, and choose reliable lending platforms to minimize risks and maximize your earnings.

Crypto Mining

If you want to learn how to make money with cryptocurrency mining, this is your moment. Crypto mining is the process of validating transactions on a blockchain network.

PROS CONS
Higher profit potential High energy costs
Active involvement Potentially expensive initial investment
Supports decentralization Increasing competition

Table: Pros and cons of crypto mining.

Miners use powerful computers to solve complex mathematical puzzles, which confirm and secure transactions. In return, they're rewarded with cryptocurrency coins.

However, there is more than one mining method. If we were to base it on the process, there is solo, pool, and P2Pool mining. If we were to base it on the means used for mining, on the other hand, there is CPU, GPU, ASIC, and cloud mining.

It's probably best to start with pool mining rather than solo mining, as the latter is much harder.

How to make money with cryptocurrency: crypto mining.

To begin mining, you'll need the right hardware. Specialized mining rigs or high-performance graphics cards are common choices. Then, you must install mining software and join a mining pool. Pools are groups of miners who combine their computing power to increase their chances of solving puzzles and earning rewards.

Keep in mind that mining can be energy-intensive and may not be profitable for everyone[2]. The competition is fierce, and the puzzles get harder as more miners join the network. So, it's crucial to calculate your potential costs and rewards.

Learn more about mining on BitDegree's Crypto 101 Handbook.

Airdrops, Giveaways, and Crypto Faucets

If you're looking to explore unconventional ways on how to make money with cryptocurrency, you'll want to keep an eye on airdrops, giveaways, and crypto faucets.

PROS CONS
Free cryptocurrency Potential for scams
Low financial risk Limited earnings
Good introduction to crypto Time-consuming

Table: Pros and cons of airdrops, giveaways, and crypto faucets.

These methods can be fun, and with a bit of luck, they can bring in some extra digital assets.

Airdrops

Airdrops are like getting freebies in the crypto world. Projects usually distribute tokens to those who are eligible (sometimes you just need to hold certain tokens, other times, you might need to follow the project on social media and be registered to their platform).

It's a way to promote a new coin or platform. When the airdrop happens, you'll receive the new tokens. Sometimes, these tokens can gain value, and you can sell them for profit. Though, other times their value might not grow.

Giveaways

Many people wonder how to make money with cryptocurrency giveaways, but that's actually quite simple.

How to make money with cryptocurrency: an person filming a video.

Many projects or influencers run contests on social media platforms. They may ask you to retweet, comment, or follow their accounts for a chance to win cryptocurrency. It's a game of luck, but if you win, you can pocket some digital coins without spending a dime.

Crypto Faucets

Crypto faucets are websites or apps that give away small amounts of cryptocurrency for completing simple tasks or captcha challenges. It's an easy way to accumulate small amounts of crypto over time. While you won't get rich from faucets, it's a good way to start your crypto journey.

Remember, while airdrops, giveaways, and crypto faucets can be rewarding, they also come with risks. Be cautious and verify the legitimacy of the offers. It's essential to maintain security and privacy when participating in these activities.

Learn-and-Earn Programs

In the world of cryptocurrency, learning and earning can go hand in hand. One way to do this is by participating in Learn-and-Earn programs. These programs offer individuals a unique opportunity to acquire knowledge about the crypto space while simultaneously earning some free digital assets.

PROS CONS
Educational value Limited earnings
Free crypto rewards Competition
Convenience Skill and time investment

Table: Pros and cons of Learn-and-Earn programs.

One notable program in this category is BitDegree's LearnDrops. With LearnDrops, you get the chance to delve into the fascinating world of cryptocurrencies through engaging courses.

Earning crypto rewards with LearnDrops is quite simple and fun: you watch the courses, absorb the valuable information, and then answer straightforward questions related to what you've learned. As a reward for your successful course completion, you receive cryptocurrency tokens.

This Learn-and-Earn model combines the thrill of discovering new crypto opportunities with the tangible benefit of growing your digital assets. It's a win-win situation for those who are eager to explore the ever-evolving world of cryptocurrency and harness the potential it holds for financial gain.

Play-to-Earn Games

To master how to make money with cryptocurrency, it's important to grasp the concept of Play-to-Earn games.

PROS CONS
Earn while having fun Initial investment is often needed
Transparent and secure blockchain tech Potential earnings volatility
Diverse gaming opportunities Growing competition

Table: Pros and cons of Play-to-Earn games.

These innovative games offer you the chance to have fun while making money at the same time. These games are unique as they are built on blockchain technology – which ensures transparency and security.

The idea is simple – you play the game, complete tasks, and earn cryptocurrency rewards. Some of these games have even created their own tokens or NFTs that can be traded for other cryptocurrencies or real-world money.

To get started, you'll need a wallet to store your earnings, and you might also need to have specific tokens required for the game. Once you're set up, you can dive into a variety of gaming experiences, from action-packed adventures to virtual real estate management.

How to make money with cryptocurrency: BitDegree Missions.

Each game has its own rules and incentives, making the world of Play-to-Earn diverse and engaging. For example, if you want to try BitDegree Missions, which is a gamified learning experience (a mix between Play-to-Earn and Learn-and-Earn), you'll see that you don't need to have any tokens in advance. You just need to have a crypto wallet and a desire to learn.

However, it's important to approach Play-to-Earn games with the same caution as any other investment. With the right approach and a bit of gaming fun, though, you can discover how to make money with cryptocurrency through these exciting Play-to-Earn opportunities.

Binance Review
Pros
  • A very well-known crypto exchange platform
  • More than 500 different cryptos available
  • Two-factor authentication
Main Features
  • Over 500 different cryptocurrencies available
  • Strong security
  • Small withdrawal fees
Bybit Review
Pros
  • Very low trading fees
  • Exceptional functionality
  • Mobile trading app
Main Features
  • Very competitive trading fees
  • An intuitive mobile app
  • Up to 100x leverage available
Kraken Review
Pros
  • Secure and reliable
  • Low fees
  • A good amount of fiat currencies accepted
Main Features
  • Reputable exchange
  • Multiple fiat currencies are accepted
  • Relatively low trading fees

ICO and IEO Investments

If you want to learn how to make money with cryptocurrency by participating in Initial Coin Offerings (ICOs) and Initial Exchange Offerings (IEOs), this is your opportunity.

PROS CONS
High profit potential High risk of loss
Diversification of investment portfolio Lack of regulatory oversight
Support for innovation in the cryptocurrency space Complexity in assessing legitimacy and potential

Table: Pros and cons of ICO and IEO investments.

In the world of cryptocurrency, there are various ways to potentially grow your investments, and one of the most intriguing avenues is through ICOs and IEOs. These are fundraising methods used by blockchain startups to secure capital for their projects.

ICOs involve the issuance of a new digital currency or token by a company. Investors purchase these tokens during the ICO, hoping that the project will succeed and the tokens will increase in value.

If the project takes off, the value of the tokens can skyrocket, resulting in substantial profits for early investors. However, it's essential to be cautious because ICOs are often associated with high levels of risk, as not all projects achieve success, and some may even turn out to be scams.

How to make money with cryptocurrency: ICO.

IEOs are somewhat similar to ICOs but are conducted on cryptocurrency exchange platforms like Binance (on Binance Launchpad) or KuCoin (on KuCoin Spotlight). This provides a level of trust and security, as the exchange typically vets projects before allowing them to launch an IEO.

Investors can participate by buying tokens directly from the exchange. This added layer of security can help reduce the risk associated with fraudulent projects.

Before diving into ICOs or IEOs, it's crucial to do your research. Assess the project's whitepaper, team, and objectives. Look for transparency and a clear use case for the cryptocurrency. Furthermore, consider the exchange's reputation when participating in an IEO.

Risk Assessment and Management

Now that you know how to make money with cryptocurrency, it's important to take some time to learn how to manage risks.

Here are some key principles to help you navigate this volatile landscape and protect your investments:

  • Set Realistic Goals. Start by setting achievable financial objectives. Don't expect overnight riches. Crypto can be unpredictable, so patience is key.
  • Diversify Your Portfolio. Never put all your eggs in one basket. Spread your investments across different cryptocurrencies. The best crypto exchanges list a wide range of assets, so you can diversify without having to change platforms.
  • Automate Your Trades. Consider using trading bots (like the ones offered by Binance) or limit orders to automate your buying and selling. This can help you stick to your strategy and prevent emotional decision-making.
  • Stay Informed. Regularly follow cryptocurrency news and stay informed about market trends. Knowledge is your best defense against unexpected shifts.

How to make money with cryptocurrency: newspaper.

  • Use Risk Management Tools. Many platforms offer tools like stop-loss orders. These tools limit potential losses by automatically selling your assets if they drop below a certain price.
  • Consider a Hardware Wallet. For long-term storage, hardware wallets provide added security. They're not connected to the internet, reducing the risk of hacking. One of the top wallets on the market is Ledger Nano X.
  • Consult a Financial Advisor. If you're unsure about your investment choices, consider seeking advice from a financial expert. They can help tailor a strategy to your specific financial situation.
  • Never Invest More Than You Can Afford to Lose. This golden rule cannot be stressed enough. Only invest money you can afford to lose without causing financial distress.

While the allure of cryptocurrency gains is undeniable, it's essential to remember that risk management is your shield against potential losses.

Conclusions

When looking into how to make money with cryptocurrency, you'll find a wide range of promising opportunities, including trading, mining, staking, gaming, and so on.

No matter if you choose to trade on Binance or immerse yourself in engaging and rewarding BitDegree Missionscontinual learning and adaptability are keys. Keeping up with the latest developments, exploring new opportunities, and diversifying your portfolio can help you navigate the volatility and uncertainties of this dynamic market.

Just don't forget that earning money with crypto can often be risky and there are many scams out there. Thus, make sure to DYOR before engaging in any earning activity.


Scientific References

1. H. Lau, S. Tse: 'Decentralized Basic Income: Creating Wealth with On-Chain Staking and Fixed-Rate Protocols';

2. J. Li, N. Li, J. Peng, et al.: 'Energy Consumption of Cryptocurrency Mining: A Study of Electricity Consumption in Mining Cryptocurrencies'.

About Article's Experts & Analysts

By Ain N.

Lead Content Researcher

Ain is the Lead Content Researcher. Her vast experience with crypto and blockchain tech-related content allows her to identify the key pieces of information that should be presented to the learner, and ensure the validity of the gathered data. Wit...
Ain N., Lead Content Researcher
Ain is the Lead Content Researcher. Her vast experience with crypto and blockchain tech-related content allows her to identify the key pieces of information that should be presented to the learner, and ensure the validity of the gathered data.
With a degree in New Media studies, she has developed an extensive list of techniques to educate people via new, research-proven study models based on deduction and long-term human memory.
Ain approaches everything with unequivocal attention to detail. Her main goals are to erase the ambiguity surrounding many Web3 concepts, and to guide content writers in presenting difficult crypto-related concepts in an easy-to-understand manner.
Even though content strategy is her main passion, Ain also enjoys reading high-fantasy books and watching superhero movies.

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FAQ

Is cryptocurrency safe to invest in?

Cryptocurrency investments come with risks. While they offer potential for profit, the market can be highly volatile, and scams exist. To stay safe, do thorough research, use reputable exchanges like Binance or Bybit, and consider storing your assets in secure wallets like Ledger Nano X. Besides that, diversify your investments and only invest what you can afford to lose.

How to make money with cryptocurrency as a beginner?

For beginners, it's crucial to start by understanding the basics. Begin by researching different cryptocurrencies, their uses, and the technology behind them (you can learn about some great projects and crypto overall via BitDegree Missions). Consider starting with a small investment in a user-friendly exchange (such as Binance or Kraken). Joining online communities and forums can provide valuable insights and guidance, too. Overall, always prioritize learning and exercising caution to make informed decisions as you begin your cryptocurrency journey.

How to pick the best crypto exchange for yourself?

Picking out the best crypto exchange for yourself, you should always focus on maintaining a balance between the essential features that all top crypto exchanges should have, and those that are important to you, personally. For example, all of the best exchanges should possess top-tier security features, but if you're looking to trade only the main cryptocurrencies, you probably don't really care too much about the variety of coins available on the exchange. It's all a case-by-case scenario!

Which cryptocurrency exchange is best for beginners?

Reading through various best crypto exchange reviews online, you're bound to notice that one of the things that most of these exchanges have in common is that they are very simple to use. While some are more straightforward and beginner-friendly than others, you shouldn't encounter any difficulties with either of the top-rated exchanges. That said, many users believe that KuCoin is one of the simpler exchanges on the current market.

What is the difference between a crypto exchange and a brokerage?

In layman's terms, a cryptocurrency exchange is a place where you meet and exchange cryptocurrencies with another person. The exchange platform (i.e. Binance) acts as a middleman - it connects you (your offer or request) with that other person (the seller or the buyer). With a brokerage, however, there is no “other person” - you come and exchange your crypto coins or fiat money with the platform in question, without the interference of any third party. When considering cryptocurrency exchange rankings, though, both of these types of businesses (exchanges and brokerages) are usually just thrown under the umbrella term - exchange. This is done for the sake of simplicity.

Are all the top cryptocurrency exchanges based in the United States?

No, definitely not! While some of the top cryptocurrency exchanges are, indeed, based in the United States (i.e. KuCoin or Kraken), there are other very well-known industry leaders that are located all over the world. For example, Binance is based in Tokyo, Japan, while Bittrex is located in Liechtenstein. While there are many reasons for why an exchange would prefer to be based in one location over another, most of them boil down to business intricacies, and usually have no effect on the user of the platform.

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