Popular ways to make money on cryptocurrency

Among the characteristics of cryptocurrencies, one of the key places is occupied by their high volatility. On the one hand, it provides digital money with an honorable first place among high-risk investment assets. On the other hand, sharp and rapid price changes provide an opportunity to increase capital both in the long and short term.

Cryptocurrency coins – illustrative photo. Image credit: Kanchanara via Unsplash, free license

Today, there are at least 10 ways to make money on cryptocurrency. Each of them may be acceptable or even optimal for your goals and capabilities. Let’s consider some of them in more detail.

Buy and keep for a long time

Fundamentally, cryptocurrencies are steadily rising. Of course, this is most true for top coins. Periodically, the market sags, but if you successfully catch the wave and be patient, the result can be stunning.

The classic of the genre is the history of Bitcoin. Now it is hard to believe that in 2009 1000 BTC were worth less than 1 cent, namely 0.003 USD. And then I could not even dream of the opportunity to change BTC to LTC.

In mid-2020, the coin was already worth $12,000. It would seem that this is not the best time to buy, but in the fall of 2021, the coin reached an all-time high and its price exceeded $68,000.

Ethereum has a very similar story. Moreover, according to some indicators, the potential of this coin is even greater. In the summer of 2021, its price tested the $900 mark, five times lower than the all-time high. Within a few weeks, the price topped $1900 and rushed down again. Now it is re-storming another key resistance level at around $1,700.

Long-term earnings on cryptocurrency include investments lasting more than 1 month. That is, Ethereum has already provided the opportunity to double investments over the past year.

Advantages. Potentially high profit, the possibility of risk diversification. Deep knowledge in technical analysis is not required.

Flaws. With a strong drawdown of quotes, there is a risk of large losses. It is difficult to do without knowledge in the field of fundamental analysis.

Mining

Many see the prospect not only in cryptocurrency trading, but in coin mining. Traditional mining has been used by thousands of people and is still quite popular, although it is being actively crowded out by more affordable staking and landing.

Mining requires at least minimal knowledge in the field of cryptography and special equipment. It is almost impossible to mine Bitcoin on user-level devices, and the coins that your laptop can “power” are not very well known and their prospects are rather vague.

Earnings are influenced by a huge number of variables and it is extremely difficult to name even approximate figures. Based on the combination of characteristics, it is already quite difficult to call mining the best way to earn money.

Advantages. Moderate passive income, deep technical knowledge is not required, a lot of guides on the Internet.

Flaws. The need for large investments at the start, earnings are unpredictable, although it largely depends on the power of the equipment.

Cryptocurrency staking

You can get coins in another way. Over the years, staking has become more and more popular. Unlike mining, it is not calculations that are used to confirm transactions, but already existing coins.

If you have PoS coins, you can mine them indefinitely without any special effort, mental or physical. It is enough to choose a platform for staking, deposit coins and, in fact, that’s it. Of course, you will have to buy coins for fiat or LTC to BNB exchange using LetsExchange or another service. Naturally, there are nuances here. If you are lucky enough to find a promising coin, you can hit the big jackpot. If the coin loses popularity and depreciates, you risk losing everything.

Advantages. Deep knowledge of the market is not required, powerful equipment is not required, the main costs are associated with the purchase of coins. Staking can be successfully combined with hodling.

Flaws. For a sufficiently high income, significant investments will be required, there is a risk of partial or complete loss of the deposit.

Cryptocurrency trading and copy trading

Those who have experience trading on the stock exchange often start with trading. Technically, everything is simple: buy on a dip, sell on an uptrend. However, you can make money on falling prices, but this requires experience.

Copy trading can be considered a light trading option, as you simply copy the work of a more experienced trader.

Advantages. High profit potential in a short time, you can combine the methods of technical and fundamental analysis. The market entry threshold starts from a few dollars.

Flaws. You need to study the market, permanently monitor asset quotes. Very high risk of losing the deposit.