Last Updated on April 23, 2021 by Melissa S.
Can You Actually Make Money With Cryptocurrency?
You only have to search this blog or Google to quickly conclude there are many ways to make money in life. Some money-making ideas require a great deal of effort, while others are passive and mostly need an initial investment of your time.
Cryptocurrency has quickly become an exciting way to make some extra cash and has become a primary income source for some individuals. However, the question remains: can you really make money with cryptocurrency, or is it just a load of hot air spouted online?
The answer is yes. You just need to decide which cryptocurrency money-making method is suitable for you. If you want to try something different towards your financial future, here are a few examples of what you can do:
Buy and Sell Cryptocurrency
Arguably the best way of making a profit on cryptocurrency is by purchasing some coins at a low price and selling them later when the value goes up significantly. For example, let’s say you bought one bitcoin at the cryptocurrency’s inception in 2009.
Today, 12 years later, the value of a single bitcoin is just under £36,000. Of course, you don’t have to wait such a long time to enjoy an excellent return on your investment. But, it can make sense to keep some coins for long-term investment purposes.
Naturally, you will want to minimise your risk. With that in mind, it makes sense to invest small amounts of money in several different cryptocurrencies rather than staking a large amount in a single cryptocurrency.
Trade on Cryptocurrency Price Movements
If you don’t want to buy coins, you can instead speculate on the price movements of cryptocurrencies and make a side income that way. The process is the same as trading traditional currency pairs, such as USD/EUR (US Dollar against the Euro).
For instance, let’s say that you wait for the price of bitcoin to reach a particular low in the month. You can then open a trading position and speculate the price will soon go up. When it does, and it reaches a specific amount, you can close your position and make a profit.
Websites like the Swyftx cryptocurrency exchange let you make such speculations, much as you’d use a service like IG for forex (foreign exchange) trading on traditional currency pairs and commodities such as precious metals.
Investing in New Cryptocurrencies
People introduce new cryptocurrencies every year. Bitcoin is undoubtedly the original cryptocurrency, but its value makes it untenable as an investment unless you’ve got deep pockets.
When new cryptocurrencies enter the market, you could always purchase a few coins from them and just hold onto them for a while. It’s a process known as ‘hodling’ – yes, it’s a deliberate misspelling, but it’s now a cryptocurrency term, believe it or not.
It’s worth considering that hodling won’t always guarantee you the results you desire (if any), so only invest money that you wouldn’t get upset about if you lost.
The above examples are the most popular methods for making money on cryptocurrency. There are others that haven’t been mentioned, such as cryptocurrency blogging and using affiliate programs, but the above methods yield the highest results or rewards.