5 ways to Make Money in Cryptocurrency
Cryptocurrency is the new industry that has opened up many more money making channels. Though it’s a relatively new industry, it is fast gaining grounds.
It’s started with Bitcoin, powered by the blockchain technology. While Bitcoin is the pioneer, we have over 1500 currencies traded on exchanges today.
There are many ways to make money in the industry. But before we get into these points, let me help with some basic understanding of what the industry is.
Cryptocurrency is Internet-based money. It’s a currency for everyone that has access to the Internet. It’s not owned by Governments. While Governments are working towards regulating the industry, they can’t in any way fix the value of the coins.
Governments own and regulate FIAT currency. Think of the currency of your country. Your Government fixes its value and makes laws that force people to accept it as a means of payment.
On the other hand, no one forces you to accept cryptocurrency. The coin value generally is determined by demand and supply market forces. The more people accept and use it, the more the value grows.
- 1 How to make money in the cryptocurrency industry.
- 2 What do you do with digital coins
- 3 The risks in cryptocurrency
A big problem with cryptocurrencies is volatility. They can change rapidly and unpredictably, especially for the worse. That makes it difficult for businesses to adopt and accept it as a means of payment. However, some cryptocurrencies like DT Coin based on Big Data, demand and supply are relatively stable and encourages massive adoption.
How to make money in the cryptocurrency industry.
Here are 5 ways you can make money with cryptocurrencies
1 – Buy coins and hold – Long-term investment
The easiest way for anyone to start making money in the industry is to buy and hold the coins. You really do not need to be an expert here. All you need is to be able to choose the right coin.
Bitcoin happens to be the first choice for many. However, there are many altcoins (Other coins apart from Bitcoin) that are super profitable. Holding for a few weeks could sometimes triple your investment.
There are many platforms to buy digital coins with your credit card. A widely used and recommended broker is Coinbase.
Once you’ve bought your coins, it is recommended for security reasons to store them in a cold or paper wallet. Allowing your coins in broker or exchange account (hot wallet) is highly risky as you may lose access should the platform break down.
Any problem with this method?
If you invest in fake or scam projects that end up dead, you lose your investment. You have to really do thorough research before taking steps to buy any coins for a profit.
2 – Day trading on exchanges
Trading digital coins on exchanges is another way to make quick money in cryptocurrencies. It is also a highway to big losses.
Day trading is not given to just anybody. It requires skills and accurate understanding of the market to be able to profit from it. It involves buying coins when the value drops and sell on the rise.
Your success here depends on your ability to chose the right coin to trade and how to use the tools to interpret signals. Being current in the industry helps you buy the rumor and sell the news.
Binance is an excellent cryptocurrency exchange to day-trade digital coins. While the interface looks frightening for most beginners, the principle is the same. Some other commonly used exchanges are Poloniex, Bitstamp, Bitfinex, HitBTC, Kraken, etc
Both methods #1 and #2 are purely based on speculation. You invest because you believe sometime in the future, prices will rise giving you exciting profit margins.
3 – Create Cryptocurrency Resources/tools
One of the ways most people make money with cryptocurrencies is to create tools. As the industry grows, there is an increasing need for facilities to aid coin usage. These include trading platforms, wallet apps, analytics apps, storage organs, etc.
For peeps with advanced knowledge, they offer coaching services, video training platforms, ebooks, etc.
While this seems to be a daunting task, you do not need to be an expectation to create a resource. You may just need to tool idea and then hire developers on freelance platforms to develop the project.
The problem with this approach is that you may create a tool that’s not in demand or invest in an area that’s highly competitive. That’s why you really have to do a lot of research to be sure of the profitability of your idea.
4 – Affiliate Marketing
Affiliate marketing is a quick way for anyone to make money online. Fortunately, the cryptocurrency industry has added to the list of products to promote and earn commissions.
In this post on WA, I explained briefly how affiliate marketers can take advantage of the new and growing industry and promote products that pay in fiat or digital coins.
Some of the products you may want to promote include cryptocurrency video courses, exchange platforms, ebooks, etc.
Promoting video courses on Udemy allows you to earn in fiat currency. Most of the exchanges have affiliate programs and pay commissions in the coins your referrals buy.
If you promote CoinExchange and your referrals buy Bitcoin, Ethereum and Ethos, you earn commissions in these various coins.
5 – Create your own Cryptocurrency
Today, smart contract blockchain projects like Ethereum make it quite easy to create a cryptocurrency. You either create a utility token to serve as a payment unit on your platform or you go in for a cryptocurrency project.
While creating your own cryptocurrency appears a difficult task, it has been made quite possible by the availability of smart contract tools and a myriad of experts ready for hire.
What do you do with digital coins
- Cryptocurrency is money and it’s meant to be spent the way it is. You could use your coins to buy goods and services online or from offline shops where the coins are accepted.
- Another option is to hold and wait for the value to grow.
- Transfer to someone.
- Convert to your local currency.
The risks in cryptocurrency
Like in any other business, cryptocurrency is not without risks. This is at every point of investment. One of the major risks is volatility. If there is no major update in the systems to stabilize the coin values, sign up and down movements may end up injecting a massive deterrent in the industry.
Most Governments still haven’t approved digital currencies for macro economies. The fear of money laundry, tax evasion and sponsorship of criminal and illegal activities may push Governments into taking rash steps towards completely neutralizing the industry.
Now you know you can make money in cryptocurrency in many ways. Let me know what you think in the comment box. Are you holding any coins? What do you think about the industry in general?