The Proven Ways Even Beginners Make Money With Cryptocurrency

It is not a news anymore that lives are been changed financially through cryptocurrency. You possibly know someone directly or indirectly whose live changed through cryptocurrency. That may be what motivated you to get started. Whatever the good reason is, I will be discussing about how to make money with cryptocurrency even as beginners.

Can Cryptocurrency Make You Rich?

The success stories of people are out there. You may have heard some of these stories from ‘the horse’s mouth’ but somehow you keep asking ‘can cryptocurrency make you rich’. The simple answer is yes, cryptocurrency can make you rich even as a beginner in the cryptocurrency market but there is a very important thing you must know about crypto. That is:

Cryptocurrency Is Volatile

Cryptocurrency is highly volatile, the price fluctuates because it is influenced by supply and demand, investor and user sentiments, government regulations, and media hype. All of these factors work together to create price volatility. This volatility is the main factor that makes it possible to achieve financial success with cryptocurrency within a short time but just as cryptocurrency can make your life better, it can also make it worse, if care is not taken. [Here Is Why Cryptocurrencies Are So Volatile]

Can You Live Off Cryptocurrency?

Yes, you can live a comfortable life off cryptocurrency. To make money with cryptocurrency and achieve financial stability even as a beginner is one of the great realities about crypto.

But to achieve this you need the right information and skills. You can checkout this article [Can You Make A Living From Trading Cryptocurrencies?] In this article, I treated this question in depth.

How Do You Make Money With Cryptocurrency?

I have discussed some of the good reasons why getting into cryptocurrency market is a beautiful way to financial freedom and some of the realities of the market you should bear in mind. So now I will address the question ‘how do you make money with crypto?’.

There are different ways you can make money with cryptocurrency and I will discussion some of these ways here but if you want to read more elaborate explanation, then you can read [Ways to Make Money With Cryptocurrency].

5 Strategies For Making Money With Cryptocurrency

  • Investing in projects early
  • Holding
  • Trading
  • Staking and Lending
  • Mining

Investing In A Project Early

This is the easiest ways to make money with cryptocurrency even for beginners. This entails discovering projects (coins) in their early stages. Bitcoin (BTC), Ethereum (ETH), Binance coin (BNB) started of selling for cents or a few dollars.

Bitcoin (BTC) was launched at a zero price in 2009. On July 17, 2010, its price jumped to $.09.

make money cryptocurrency new coins

Ethereum (ETH) was launched In August 2014 at the price of $0.31 per coin.

Binance Coin (BNB) was launched was launched through an Initial Coin Offering (or ICO) that took place from June 26th to July 3rd, 2017. According to coinmarketcap BNB sold for $0.1078 on 29th July 2017.

We have seen this scenario play out over and again on and the good news is that it is still happening and will continue to happen as long as new cryptocurrency projects are been created.

Holding

If you’re not a technical person. You don’t like seeing those lines in the charts, this is a another way you can make money with cryptocurrency.

Holding is an investment strategy in cryptocurrency known are buy-and-hold, whereby you buy a coin and just hold it for a while before selling. This is a long term strategy and the best for beginners in cryptocurrency because it is not capital intensive, you can start with any amount you have.

This investment strategy demands that you discover cryptocurrency coins that are with stable projects. This increases the chances of the coin staying around for the long term and the chances that it will be profitable in the future.  This is because, having a solid projects linked to it shows that the team behind it are dedicated.

And in holding, you don’t need to worry about short-term price fluctuations – especially when investing in solid and established cryptocurrencies. In the chart below, in August 2021, AXS was priced at $77.88, but it started dropping and sold for $51.29 in September 2021.

make money with cryptocurrency chart

Had you panicked and sold your AXS tokens, you would have sold in loss of approximately 34%. Nevertheless, had you engaged in HODLing – by October of the same year, AXS was trading at nearly $136.25 per token. That is approximately a 75% increase from $77.88.  This is just one example of many. The key point here is that the most effective way to invest in cryptocurrency and make money is through a long-term strategy.

Day Trading

This is the most popular way people make money with cryptocurrency. Unlike holding, staking that are profitable in long term, Day trading take daily advantage of the volatile nature of cryptocurrency.

To be a good day trader you need to posses at least the basic understanding of the market operation and to have the proper analytical and technical skills.

binance home page cryptocurrency

With this skills you will analyze the chart for the market performance and the possible future move, so that you can arrive at an accurate predictions for your trade. Day traders lookout for short term opportunities in the market and capitalizing on the volatility of cryptocurrency to make money.

Experienced traders would hardly hold onto a trade for more than 24 hours. The idea is to enter multiple trades, then make small fraction of their trade capital in profit but then more frequently.

When trading cryptocurrencies, you can enter a long or short position trade based on your predictions from analyzing the market. This shows that you can trade cryptocurrency in any direction of the market and make profit.

Staking And Interest

Cryptocurrency staking is one of the ways to earn passive income with cryptocurrency. Staking cryptocurrency coin means locking your coin away in a proof-of-stake blockchain network for a certain duration.

cryptocurrency Staking And Interest

When you stake your cryptocurrency coin you are contributing to the blockchain through the proof-of-stake network because the network uses your coins to validate transactions and in return you receive rewards.

In a simpler terms you are lending your cryptocurrency coins to the network. Staking enables the network to manage security. The Proof-of-Stake algorithm appoints the transaction validator depending on the number of coins you have staked.

Mining

The final method to consider from our list of some of the strategies for making money with cryptocurrency is through mining.

When you mine a cryptocurrency like bitcoin, you are rewarded with new coins. To be capable of mining a cryptocurrency, you need technical expertise and upfront investment in specialized hardware.

cryptocurrency Mining

Mining is one of the oldest ways to earn money with cryptocurrencies. And an important part of the consensus mechanism of Proof of Work (PoW), which is the process of validating transactions and securing a PoW network.

There are many cryptocurrency projects that need miners and in many cases, competition is slim on the ground. Overall, you just need to ensure that the rewards from the mining are worth more than you what you invested.

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