By Amir Shalev | Last update: 6/16/2023
The world of Cryptocurrencies is exciting but with so many terms and terminologies it could appear complicated. We are here to try to simplify and cover the different ways in which you can make money with Crypto. In this article we will cover:
- Trading Cryptocurrency
- Investing in Crypto
- Crypto Lending
- Crypto Play-to-earn
- Crypto Casino Gambling
- Crypto Blogging
- Crypto Staking
- Crypto FAQs
- Conclusion
So let’s dive in!
Trading Cryptocurrency
“Trading” is a quick-paced strategy where you buy and sell cryptocurrencies to make a profit. First, you need some crypto. You can then exchange it for different types on various online platforms. This method isn’t for the faint-hearted, though. Prices can swing wildly from one minute to the next in the crypto market. This means there’s a higher risk, but also the potential for high rewards.
To succeed, you’ll need solid technical knowledge and sharp analytical skills. Understanding market trends, monitoring price changes, and making quick decisions are all part of the game. This is why trading is often a better fit for those who have a good grasp of cryptocurrencies already.
For beginners, investing can be a safer option. This involves buying popular cryptocurrencies like Bitcoin or Ethereum, and holding onto them for longer periods. The aim is for their value to increase over time, giving you a return on your investment.
There’s also a way to keep trading going round the clock: trading bots. These are software programs that buy and sell cryptocurrencies automatically based on predetermined rules. While setting up a bot can be challenging, it’s worth the effort. Once it’s running and has gathered enough data on market patterns, it can execute trades possibly even better than a human can. Just remember, even with a bot, it’s crucial to keep an eye on your trades to manage risks effectively.
That’s it about trading, let’s talk about investing in Crypto
Invest in Crypto
“Investing in Crypto” is a chance to profit from the volatile cryptocurrency market. Here’s how to start and what to watch out for.
Ensure your personal finances are sorted before investing. You should have an emergency fund, manageable debt, and ideally, a diversified portfolio. Cryptocurrency investments can then become part of this portfolio.
Here are five steps to start investing in cryptocurrencies:
Know your investment: Understand the crypto you’re investing in. Each crypto functions differently and new ones emerge daily. You must understand the potential gains and losses for each trade. Remember, many cryptocurrencies, like Bitcoin, are not backed by hard assets or cash flow. Their value comes from the belief that someone will pay more for them in the future.
Don’t be guided by the past: Many new investors make the mistake of projecting past growth into the future. Instead, focus on what could drive future returns. The gains you need are those of tomorrow, not yesterday.
Be prepared for volatility: Cryptocurrency prices can swing wildly on rumors. This volatility can be advantageous for experienced traders but a potential trap for new investors.
Manage your risk: When trading volatile assets like cryptocurrency, risk management is key. For long-term investors, this could mean never selling, while short-term traders might set strict rules for when to sell. New traders should consider setting aside a specific amount of trading money and only use a portion initially.
Only risk what you can afford to lose: Don’t put money into speculative assets if you can’t afford to lose it all. Funds needed in the near future should be kept in safe accounts.
Also, consider the security of your exchange or broker. Some traders invest in crypto wallets to securely hold their coins offline, away from potential hackers.
Other ways to invest in cryptocurrency:
- Crypto futures: Wager on Bitcoin price swings, with the power of leverage to generate significant returns or losses.
- Crypto funds: Funds like the Grayscale Bitcoin Trust allow you to speculate on price changes in Bitcoin and Ethereum, among others.
- Crypto exchange or broker stocks: Investing in a company like Coinbase or Robinhood that profits from cryptocurrency trading, regardless of which crypto comes out on top.
- Blockchain ETFs: Invest in companies that might profit from blockchain technology. Note that your exposure to cryptocurrency is diluted as these companies often have other business activities.
Each of these methods carries different levels of risk and exposure to cryptocurrency, so ensure you understand exactly what you’re buying.
Now that we understand trading AND investing in Crypto, let’s dive into Crypto lending:
Crypto Lending
Cryptocurrencies, much like other asset classes such as shares, real estate, or vehicles, can be used as security for loans. A number of contemporary lending institutions now offer crypto loans, which are protected by your existing cryptocurrency assets. However, it’s necessary to already own cryptocurrency to explore these loans as an option.
These loans are attractive due to the provision of immediate liquidity, lower interest rates, swift funding, and the absence of credit checks. The potential drawback? If the value of the collateralized coin drops, you may be obligated to offer more crypto, and missing a payment could result in automatic withdrawals or the liquidation of your crypto account.
Nonetheless, if you need instant funds for purchases and don’t want to sell your crypto, a crypto loan can be a valuable resource.
What is a Crypto Loan?
A crypto loan is a collateralized loan where your cryptocurrency assets are pledged to acquire liquidity from a lender, which you must repay in installments. As long as you keep up with your payments and repay the loan fully, your crypto is returned to you after the loan period.
The loan-to-value (LTV) percentage of your pledged cryptocurrency typically determines the crypto loan amount. Lenders like Binance allow you to borrow up to 50% of your crypto’s value, while platforms like Youholder.com permit borrowing up to 90%. Many lenders accept up to 40 different cryptocurrencies as collateral, with Bitcoin and Ethereum being the favorites.
Loan durations can range from a week to over a year. Compared to credit cards and personal loans, interest rates are lower, starting between 0% and 13.9% with lenders like Nexo.
Crypto loans carry inherent risks such as additional collateral requirement if the value of your crypto diminishes, and heavy penalties for late payments.
Crypto Loans Types
Crypto loans fall into two categories: CeFi and DeFi.
Centralized Finance (CeFi) loans are custodial crypto loans in which a lender retains control over your crypto during the loan’s tenure. The majority of crypto loans are CeFi.
Decentralized Finance (DeFi) loans utilize smart contracts to ensure loan obligations are met. While you maintain control over your crypto assets, a lender can initiate automatic actions against your account in the event of a default or missed payment. DeFi loans tend to have higher interest rates than CeFi.
Crypto Loan Applications
A crypto loan is versatile and can be used for any purpose, much like a personal loan. Whether it’s for a house down payment, vehicle purchase, tuition, debt refinancing, or setting up a business, the loan cash can be utilized freely.
If you hold a substantial amount of crypto and require liquidity without having to sell, a crypto loan can be an excellent solution.
Keep in mind that some crypto lenders may not be able to offer U.S. dollars directly but can provide loans in stablecoins (pegged to the U.S. dollar) or gold, which can be converted into cash.
How to Obtain a Crypto Loan?
The process of getting a crypto loan begins with owning any of the accepted cryptocurrencies for loans. Research trustworthy lenders and select the one that suits your needs best. Each lender has its own application process, so ensure you read through the eligibility criteria and terms and conditions diligently.
After setting up an account with the chosen lender, complete the verification process for your crypto holdings and identity. Credit checks are not required for crypto loans.
Then you can choose the loan type you prefer based on your comfortable LTV, loan amount, and repayment term. Lenders typically provide calculators to estimate how much you can borrow and the collateral necessary for your loan amount.
Finally, submit your application. Crypto lenders are renowned for their quick turnaround times, with some like Nexo approving loans within seconds and funding your account within 24 hours.
Risks of Crypto Loans
Crypto loans are accompanied by risks, such as a lack of thorough supervision compared to traditional banks, susceptibility to hacking, or the lender going bankrupt. If funds are lost due to a security breach, compensation is not assured.
Crypto loans are also susceptible to the price volatility of the underlying coin, and additional collateral will be required if the LTV increases.
The Pros and Cons of Crypto Loans
Advantages:
- No credit checks.
- Rapid approval and funding.
- Avoid selling crypto assets.
- Diverse loan terms, ranging from a week to a year.
- Lower interest rates.
- Wide range of potential uses for the loan.
Disadvantages:
- Additional collateral may be needed if the crypto value drops.
- Non-payment or multiple missed payments can result in asset liquidation.
- Lenders have less oversight compared to traditional banks.
- Existing crypto portfolio is required.
- Your crypto is not accessible when held with a CeFi lender.
Let’s move from Crypto loans, and onto the exciting world of Crypto games!
Crypto Play-to-earn
Blockchain gaming empowers you. It’s no longer about simply playing, but owning, trading, and profiting. You’re not just a player – you’re a stakeholder.
In conventional gaming, the assets you spend time and money acquiring aren’t truly yours. They can’t be sold or transferred, and their value is lost if the game ends.
Blockchain gaming changes this. Your in-game items and coins become your property, held as tokens on the blockchain, which you can trade or sell as you wish.
So, what’s your role in this?
You’ll deal with fungible tokens (like ERC-20) and non-fungible tokens (NFTs), such as ERC-721 or ERC-1155. The former are popular in-game currencies, while the latter represent in-game items and characters.
An NFT represents a unique asset, existing independently on the blockchain but compatible with the game’s infrastructure. You hold ownership and can sell or transfer these tokens as you please. This is a major shift in game dynamics, and it’s a shift in your favor.
But there’s more.
Consider the concept of the Metaverse, a new level of digital reality in gaming. It’s a shared virtual space where you can own, create, and even monetize experiences. With the help of NFTs, you can build your digital world and profit from it.
Then there’s Play-to-Earn (P2E). In these games, you earn real-world rewards, including cryptocurrency, by completing tasks or winning battles. The more time and effort you invest, the more you can earn.
Now, let’s talk specifics.
Take Axie Infinity, for instance. Here, you breed, own, and battle with unique creatures called Axies. Every Axie is an NFT that you own. By winning battles, you can earn Axie’s native currencies, SLP and AXS, providing you with a play-to-earn opportunity.
But there’s a catch. You have responsibilities, too.
The digital value you’re creating and owning needs to be secured. As a responsible blockchain gamer, it’s crucial for you to store your assets securely. For instance, you could use a hardware wallet like Ledger to store your private keys offline, while still interacting with your games online.
In conclusion, you’re not just playing games in this blockchain-driven revolution, you’re owning, trading, and profiting. It’s a powerful shift, placing you at the center of a digital economy. Embrace it, but remember to protect your assets. Blockchain gaming isn’t just about winning – it’s about playing smart.
From playing, let’s look at the world of Crypto Casinos and how to play them safely.
Crypto Casino Gambling
Crypto casino gambling involves using cryptocurrencies like Bitcoin to place bets on online gambling platforms. You can wager on various activities from casino games and poker to sports betting and lotteries. Due to Bitcoin’s high anonymity and security, it has gained popularity among gamblers. Several Bitcoin gambling platforms even offer bonuses and promotions that traditional currencies can’t match.
Kickstarting your crypto gambling journey requires you to buy Bitcoins, which can be done through a cryptocurrency exchange. Post-purchase, you can head over to a Bitcoin-accepting online gambling platform.
Why Gamble with Bitcoin?
- Anonymity and Security: Bitcoin safeguards your personal information, allowing you to gamble online with peace of mind.
- Bonuses and Promotions: To attract players, many Bitcoin gambling platforms offer appealing bonuses like free spins and cashback on deposits.
- Ease of Registration: Most Bitcoin gambling sites let you register without any personal details, unlike traditional online casinos.
Potential Pitfalls of Bitcoin Gambling
- Volatility: Bitcoin’s value can vary significantly over short periods, impacting the worth of your deposits.
- Regulatory Ambiguity: Absence of government or financial institution associations makes it challenging to ensure your funds are managed responsibly.
- Transaction Fees: Bitcoin transaction fees can vary drastically, and at times, exceed your initial deposit.
Playing Poker with Bitcoin
Bitcoin poker is simply an online version of poker that accepts Bitcoin for placing bets. You get to play with international players and access diverse game variations. Moreover, Bitcoin poker platforms often offer tournaments, bonuses, and additional features to users.
Bitcoin-Based Sportsbooks
Bitcoin-based sportsbooks are online betting platforms where you can place bets on sports events using Bitcoin. You can choose from a wide range of sports and different bet types like point spreads and money lines.
Ethereum Gambling
Ethereum gambling works similarly to Bitcoin gambling but employs Ethereum tokens to place bets. It offers the same game variety and betting options, plus the advantage of Ethereum’s smart contract functionality.
How to Start Bitcoin Gambling?
To begin, you’ll need to buy Bitcoins via a Bitcoin exchange. Then, navigate to a Bitcoin-accepting online casino to create an account. Use your Bitcoins to make deposits and withdrawals, and grab any available bonuses and promotions.
Is Gambling with Bitcoin Safe?
Generally, Bitcoin gambling is safe, provided you take the necessary precautions. Make sure to gamble only at reputable, vetted sites and maintain your Bitcoin wallet’s security and privacy to protect your funds. Be mindful of Bitcoin’s market volatility. While many casinos convert your crypto into a fiat currency for wagering, some do not. It’s vital to be aware of Bitcoin’s current price when gambling. As with all forms of gambling, never bet more than you’re willing to lose.
Understanding Bitcoin Casinos
Bitcoin casinos are online gambling platforms accepting Bitcoin for transactions. These casinos usually offer a similar selection of games as traditional online casinos, such as slots, roulette, blackjack, etc. The key difference lies in the ability to deposit and withdraw funds using Bitcoin anytime without providing personal information, providing Bitcoin casino users with increased anonymity and security. Plus, using Bitcoin allows for quicker withdrawals.
Is Gambling with Cryptocurrency Legal?
Cryptocurrency gambling’s legality depends on your jurisdiction and its online gambling laws. In general, many EU countries, Canada, the UK, and Australia have progressive online gambling policies. The USA has varying stances across states, with restrictive laws on online gambling but a wider acceptance of sports betting. Conversely, some countries, like China, Indonesia, and the UAE, ban online gambling entirely.
What is a Bitcoin Gambling Bonus?
A Bitcoin gambling bonus is an incentive offered by online casinos that rewards extra funds when depositing Bitcoin. These bonuses often take the form of free spins, cashback on losses, or deposit matches. Remember, all bonuses aren’t created equal; some come with more favorable terms and conditions. Make sure to understand these before claiming a bonus.
Crypto Blogging
As interest in cryptocurrencies grows, sharing insights and news through a crypto blog can be rewarding. If you’re passionate about crypto and enjoy writing, here’s how to get started:
1. Choose Your Niche: Define your focus within the crypto world. It could be Bitcoin, Ethereum, blockchain technology, or a wider view of the market.
2. Start Your Blog: Choose a platform and set up your blog. Use a catchy, relevant name that reflects your niche. Providers like WordPress or Wix offer user-friendly interfaces.
3. Develop Content: Start creating blog posts about your chosen topic. Make sure your content is well-researched, informative, and engaging. You don’t need to be a crypto guru but a solid understanding and keen interest in your niche are essential.
4. Engage Your Readers: Engage with comments on your posts and on social media platforms. It builds a community around your blog and helps you understand what your readers want.
5. Optimize and Promote: Learn basic search engine optimization (SEO) to make your blog visible on search engines. Use social media and other online platforms to spread the word about your blog.
6. Monetize: Once you have consistent traffic, consider monetizing your blog. Advertising and affiliate marketing are common methods.
Remember, crypto blogging takes time and effort, especially in the beginning. Be patient, stay consistent, and the results will follow.
Crypto Staking
Crypto staking is like putting your digital currency to work. By staking, you support a blockchain network’s operations such as transaction validation, and in return, you earn rewards.
What is Crypto Staking?
Crypto staking is part of the “proof-of-stake” (PoS) system. In this system, you can validate transactions if you hold a minimum amount of the cryptocurrency. By staking your coins, you become a validator. Validators help keep transactions legitimate in a crypto’s blockchain.
Rewards of Crypto Staking
Staking rewards are like a bonus paid to you for your help. These are given in the form of the cryptocurrency you’re staking. However, staking involves risk; you could lose some of your investment if you approve dubious transactions that break a cryptocurrency’s rules.
How Much Can You Earn?
Earnings from staking differ widely based on the platform, the cryptocurrency, and how many people stake a particular coin. Some platforms might take a cut from your staking reward while others may let you keep the full amount.
How to Start Staking Your Crypto
Here’s a simplified process to start staking:
1. Choose a Platform: Many major exchanges offer staking. Browse through available tokens for staking on your chosen platform.
2. Decide on the Token and Term: Choose which token you want to stake and the term length. Some exchanges offer flexible terms, letting you withdraw your funds any time.
3. Wait for Rewards: Once you’ve initiated staking, the next step is to wait. Rewards will be deposited into your account according to the exchange’s schedule.
While staking offers a way to earn from your crypto, always be aware of the risks. As with all investments, it’s crucial to do your research and make informed decisions.
Frequently Asked Questions:
Cryptocurrency beginners can make money through various avenues. They can start by investing in popular cryptocurrencies and holding onto them for potential long-term growth. Additionally, beginners can explore trading cryptocurrencies, taking advantage of price fluctuations to buy low and sell high. Some beginners also participate in initial coin offerings (ICOs) or engage in crypto mining to earn rewards. With proper research, strategy, and patience, cryptocurrency beginners have the opportunity to generate profits in this dynamic market.
Yes, it is possible to make a living off cryptocurrency. Many individuals have successfully transitioned into full-time crypto traders, investors, or entrepreneurs. However, it requires dedication, knowledge, and a strong understanding of the market. Making a living off crypto requires continuous learning, adapting to market trends, and managing risks effectively. With the right skills and mindset, crypto can provide substantial opportunities for financial independence.
The amount you should put into crypto as a beginner depends on your personal financial situation and risk tolerance. It is recommended to only invest what you can afford to lose, as with any investment. Start with a comfortable amount that doesn’t put a strain on your finances or affect your daily life. As you gain experience and confidence in the crypto market, you can gradually increase your investment. Diversification is also important, so consider spreading your investment across different cryptocurrencies to manage risk.
The number of crypto millionaires is continually growing, and it’s difficult to provide an exact count. With the significant growth of cryptocurrencies over the years, there have been numerous success stories of individuals who have amassed significant wealth through their crypto investments. However, it’s important to note that crypto markets are highly volatile, and the value of cryptocurrencies can fluctuate. While there are crypto millionaires, it’s essential to approach crypto investments with realistic expectations and a long-term perspective.
Yes, cryptocurrency can pay real money. Cryptocurrencies have monetary value and can be exchanged for fiat currencies like USD or other goods and services. Many individuals and businesses accept cryptocurrencies as a form of payment. Cryptocurrency can be converted into traditional currencies through cryptocurrency exchanges or used directly to make purchases, making it a viable medium for real-world transactions.
Crypto millionaires can cash out their holdings through various methods. They can sell their cryptocurrencies on reputable exchanges, converting them into traditional currencies like USD or other desired assets. Over-the-counter (OTC) trading is another option, especially for large transactions. Some crypto millionaires choose to diversify their wealth by investing in other assets or ventures, such as real estate or businesses. The process of cashing out may vary based on individual preferences, tax considerations, and applicable regulations.
Bitcoin (BTC) has historically been one of the most profitable cryptocurrencies, given its early adoption, widespread recognition, and high market value. However, profitability can also be found in other cryptocurrencies such as Ethereum (ETH), Binance Coin (BNB), Cardano (ADA), and others that have demonstrated strong performance and utility in the crypto ecosystem. It’s important to conduct thorough research, analyze market trends, and consider individual risk tolerance when determining which cryptocurrencies may be the most profitable for your investment goals.
Conclusion
In this article we covered all the ways you can make money from crypto; Each of these areas within the crypto space presents unique opportunities and risks. It’s important to conduct thorough research, understand the market dynamics, and make informed decisions to navigate the crypto landscape successfully.
Trading and investing in cryptocurrencies offer different approaches to profit from the volatile crypto market. Trading requires solid technical knowledge, sharp analytical skills, and a good grasp of cryptocurrencies. On the other hand, investing is a safer option for beginners and involves buying popular cryptocurrencies and holding onto them for longer periods, with the aim of their value increasing over time.
Crypto lending provides an opportunity to use cryptocurrencies as collateral for loans, offering immediate liquidity and lower interest rates. However, it comes with the risk of having to provide additional collateral or facing asset liquidation in case of default.
Blockchain gaming introduces a new paradigm where players can own, trade, and profit from in-game assets and tokens through the use of non-fungible tokens (NFTs) and play-to-earn opportunities. It allows players to become stakeholders in the gaming ecosystem and participate in a digital economy.
Crypto casino gambling enables the use of cryptocurrencies, such as Bitcoin and Ethereum, to place bets on online gambling platforms. It offers advantages like anonymity, security, and unique bonuses and promotions. However, it’s important to be mindful of Bitcoin’s volatility and ensure the safety of your funds. Also, while gambling may be fun, it is also a very risk way to make money; you should never gamble on money you can’t afford to lose!
Lastly, crypto blogging provides an avenue for sharing insights and news about cryptocurrencies. It requires choosing a niche, setting up a blog, and consistently providing valuable content to engage readers.
That’s it! Hope you learned and enjoyed your reading, for any comments or feedback please leave a comment.