The main purpose of people getting into the cryptocurrency field is to make money, but unfortunately, not everybody makes it in the end. Cryptocurrency is a very volatile asset and with little or no knowledge about it, you can end up losing all your savings. This is one reason it is always advised to do proper research before diving into the industry.
The industry is still very young with a very long way to go, so if you have not joined in don’t be discouraged because you are probably still one of those that heard about it in its early stage. There are thousands of cryptocurrencies out there to choose from, but with your proper understanding and choice, you can narrow the search to the ones that suit your purpose.
Since 2011, there has been steady growth in the adoption of cryptocurrency which leads to massive growth in the crypto community. The good news is, that there are several ways to make money from cryptocurrency investing, trading, staking, mining, and others. We will take a closer look at 6 of the ways in this post.
6 Best Ways to Make Money With Cryptocurrency in 2023
If you are a newbie and have been curious about how to make money with cryptocurrency, look no further as we will detail these ways below and give some easy-to-understand explanations to each of them.
- Investing in a promising coin
- Staking and lending
- Trading
- Mining
- Airdrops and forks
- Play-to-earn crypto games
1. Investing in a promising coin
The crypto market has thousands of coins available and unfortunately, not all of them are good for investing. Investing is simply a strategy of buying and hodling (holding) a crypto asset for the long term.
As earlier stated, cryptocurrencies are volatile, and holding for the long term has been proven to be more profitable than short term. This strategy requires you to identify more promising coins (that is the more stable ones) that will be around for a long time and then invest in them.
Before you start, take a look at our 5 tips to be aware of before investing in cryptocurrency.
Coins like Bitcoin and Ethereum have been around for a long time and have shown tremendous price increases over the years, so they can be said to be promising and safe to invest in.
Other promising asset includes Binance Coin BNB, Tether USDT, and USD Coin USDC.
2. Staking and Lending
This is a strategy for earning a profit on your idle cryptocurrencies. This is a way of validating crypto transactions. When staking, you should already own some coins but aren’t spending them, instead, they are locked in a cryptocurrency wallet.
Your locked coin is then used by a proof of stake network to validate transactions and then you receive rewards for doing this. This simply means you are lending your locked coin to the network. Look at this like an interest you receive from a bank for crediting your account.
This process saves much more energy than crypto mining and also does not require you to own any crypto mining hardware. Ethereum – the second most popular crypto after Bitcoin had announced a merger and will be shifting from proof of work to proof of stake in the coming Ethereum 2.0.
3. Trading
You might get confused about understanding trading and investing. In simple terms, while investing has to do with holding a coin for the long term, trading on the other hand is exploiting short-term opportunities.
We already know that the crypto market is volatile, so while you can lose money, you can also gain good profits with a proper understanding of the volatility. To be successful with trading, you will need to understand the market very well and have the proper technical skills to be able to read charts.
When trading, you can make profits regardless of whether the market is experiencing a bull run or a bearish one.
4. Mining
According to this post on Simplilearn, “crypto mining is just a process of creating new digital coin”. Mining has to do with the proof of work mechanism. The value of a coin is generated in mining.
You earn rewards with new coins when you mine cryptocurrency. Miners have to solve three very difficult mathematical problems; the hashing problem, the byzantine general’s problem, and the double-spending problem.
5. Airdrops and Forks
Cryptocurrency airdrops are free tokens that are distributed as ICO to wallet addresses to create awareness for a crypto project. Being part of an airdrop, you can get a free coin that you can later exchange or sell for money when the project goes live.
A fork happens because of a change in a blockchain that creates a new coin. If you were holding a coin on the original network, you will earn a free token on the new network.
6. Play-to-Earn Crypto Games
Play-to-earn games are simply crypto games that allow users to play games and earn crypto as rewards. Games might include completing tasks or other quests and conducting battles.
They reward players with digital cash or Non Fungible Tokens popularly known as NFTs. This way, you can have fun while earning money. There are different P2E games available out there. Below is a list of the top 5 cryptos NFT games.
- Axie Infinity
- Defi Kingdoms
- Alien World
- Crypto Blades
- Gods Unchained
Conclusion
Making money is the main reason why people indulge in the crypto space. There are several ways of making money, and you are always advised to get familiar with the market and do your extensive research before choosing one.
Among the ways to make money with cryptocurrency include but are not limited to, investing, trading, play-to-earn crypto games, airdrops and forks, mining, and staking.