So you’ve heard of Bitcoin and altcoin millionaires, you got jealous and want to know how to make money in cryptocurrency. No doubt.
You’re probably super jealous that you didn’t know about Bitcoin back when it was below a dollar.
Or perhaps you did know about Bitcoin, but you weren’t sure about it so you didn’t buy it (or it was too complicated to buy) and now you’ve missed out on all of those gains.
Or even worse, you knew about it, you bought it, but you thought Bitcoin died a few dozen times so you bought high and sold low. Tsk tsk.
You can still learn how to make money in cryptocurrency.
Disclaimer: I am NOT a financial advisor, and nothing in this post constitutes official financial advice. This is for informational purposes only. Always consult a professional financial advisor and/or accountant before making any financial decisions. **Never invest more than you can afford to lose.**
Now, none of these
There are six main categories to making money in cryptocurrency:
- Earn Free Crypto
- Using Crypto to Make More Crypto
- Working in the Crypto Industry (broad, many subcategories)
Make Money In Cryptocurrency by Investing
Investing is the most basic, least energy/work intensive method to make money in cryptocurrency. However, it is the most time intensive, because typically real investing requires a medium to long term time horizon (3-5 years is generally considered medium, >5-10 years is considered long term).
The key to successful investing is that you must have a plan while investing in cryptocurrency, and you must STICK TO YOUR PLAN. Plan to buy low and sell high. Don’t let market dips freak you out. Those are sales. Keep a big picture outlook. **Never invest more than you can afford to lose. **
Investing in cryptocurrency refers to doing your own due diligent research and choosing an investment to purchase. There are two broad categories to investing:
- Cryptocurrency assets
- Traditional stocks in the cryptocurrency industry
Cryptocurrency assets are your digital tokens: Bitcoin, Ethereum, XRP, Litecoin, Binance Coin, really any digital token. Keep in mind that in the last crypto boom there were about 2000 altcoins, and
Tip: Bear Markets the best time to invest in most assets.
Alternatively, you can still invest and gain cryptocurrency exposure by investing in cryptocurrency related traditional businesses/stocks. Sometimes this can offer you a greater advantage. If you bought Bitcoin in 2017, you most likely lost money in 2018. Meanwhile, Binance and many other successful, financially savvy businesses made huge profits.
Sure you can’t buy Binance equity. But you can purchase stocks in other companies that invest in various crypto related business models and products.
A brief Google search and you can discover a whole bunch of companies that are involved in the cryptocurrency industry to varying degrees, from newer startup public companies to established legacy companies investing in cryptocurrency.
Some legacy companies investing in the crypto industry:
- Starbucks (Bakkt)
- Facebook (releasing its own crypto)
- Goldman Sacs (investor in Circle)
- … the list goes on, just Google it and do your due diligent research.
Some new start up publicly traded companies in the crypto space are:
- HIVE Blockchain
- HUT 8 Mining
- Galaxy Digital (Investment/holding company)
- Global Blockchain Technologies
- DMG Blockchain
- HashChain Technology
- Block One Capital (not to be confused with Block One)
- … and more, just Google it and do your due diligent research.
Given that most crypto related companies are privately owned and/or you must be an accredited investor to buy their shares, I look for investment corporations that make these purchases on behalf of the shareholders. One in particular that I like is Galaxy Digital, run by CEO Mike Novogratz (full disclosure, I do own shares in this company). I’ve also briefly looked at Block One Capital, but I do not own any shares in Block One Capital as of yet.
These types of companies allow you to gain exposure to other aspects of the crypto industry that simply buying or trading crypto doesn’t allow. You cannot profit from the trading fees of exchanges unless you own the exchange or own shares in the exchange. However, all crypto exchanges are privately held. Although, you can gain exposure by buying shares in companies that hold shares in these exchanges (Galaxy Digital owns shares in Bakkt and Bitstamp).
Want to profit from the fees that digital asset custody solution providers will be making? Galaxy Digital invests in BitGo and Xapo, both provide custody solutions. I use Galaxy Digital as my example because I am familiar with them and the companies they invest in.
That being said, always do your best due diligence before investing any of your hard earned money in any crypto related startup as they are all quite high risk.
How to Make Money in Cryptocurrency with Trading
Trading is a highly realistic way to make money in cryptocurrency. It is also a highly realistic way to lose money in cryptocurrency – especially if you have no idea what you are doing.
When I say trading, I am referring to short term buying and selling of cryptocurrency. There are several ways to do this, but I will only briefly go over the broad idea of each as I am very unqualified to give details on these.
- Manually day trade
- Trading Bot
Manually day trading refers to you physically monitoring your crypto-portfolio and then putting in buy and/or sell orders for various cryptocurrencies. The idea is that if a crypto increases a certain percentage you sell for profit, then buy again if/when it drops. The trouble is… it may not drop below what you sold it at. Or you may buy it and it only drops and you can only sell it at a loss.
With manual day trading you must constantly monitor the prices like a full time job. Then, for safety, you should close all of your positions into cash when you are done trading to avoid anything crazy happening while you’re “not working”. I would personally not touch day trading with a 10-foot-pole.
Arbitrage was much more profitable prior to the regulators coming on scene. Arbitrage refers to buying any asset on one exchange, and then moving it to another exchange where it is selling at a higher price. This can be done with most any asset, but with crypto, the movement was super easy due to its technology and there was so much volatility and price differentials between the exchanges due to the unregulated nature of the industry.
As regulators create rules and exchanges implement the NASDAQ monitoring tech for manipulation and start to harmonize prices internationally, arbitrage will become a dying method. Arbitrage also requires quite a bit of work to monitor the variations of exchange prices.
Last but not least, is trading bots. Trading bots are algorithmic software that is instructed with a set trading pattern or rule that is preset by yourself. The software then works on an exchange and buys/sells crypto according to the preset rules in an attempt to make profit.
I have never used a trading bot. However, I can imagine that it would be more effective than a person day trading for a few reasons: it is better at math; it doesn’t have emotions and simply sticks to the algorithm (plan); it does not get tired and can work 24/7 (since crypto exchanges are open 24/7).
In all of the above cases you are responsible for tracking your profits and losses of EACH transaction and have them balance so that you can properly account for your taxes at the end of the year. Do not forget to consider that.
How to Make Money in Cryptocurrency by Earning Free Crypto
Now that sounds too good to be true. And it partially is. You can “earn free crypto” by using sites that have enabled “Bitcoin Faucets”.
Bitcoin faucets are basically a stream of satoshis that you get every day for streaming or using certain websites. Imagine a faucet in a sink, that instead of pouring water pours crypto (bitcoin). The website pays for the satoshis to incentivize users to visit, which they
Most faucets will restrict the max satoshis from 10,000 to 100,000 ($0.38/day to $3.80/day at a price of $3800/BTC). While this seems like peanuts, if we take an average 50,000 satoshis ($1.90) and you do this daily for 48 weeks out of the year (4 weeks “vacation” or days you don’t manage) is $638/year… that might pay for some people’s cell phone plans… but nothing that will make you rich.
Below is a quick YouTube video explaining satoshi faucets:
Make Money in Cryptocurrency by Using Crypto to Make More Crypto
While cryptocurrencies don’t have dividends, there are ways to make your crypto earn you crypto!
- Hard forks
We are all familiar with Hard Forks. If you own 1000 coins of a crypto that hard forks, then you have two thousand coins, 1000 of the original crypto and 1000 of the forked new crypto. I wouldn’t count on hard forks as a reliable way to earn crypto for two reasons: they are unpredictable and relatively rare; and they are negative for the cryptocurrency industry. You do not want coins to frequently have contentious hard forks because that divides the crypto community and dilutes coin scarcity.
Airdrops – this is when you are given coins simply by virtue of holding another coin. For example, if you own 1000 Tron tokens, you might be airdropped a new token at a certain ratio. Perhaps 10 new tokens per 1 TRX, or 1 new token per 10 TRX or simply a 1-for-1 airdrop. Again, I would not rely on airdrops as they are also rare and unpredictable.
Staking – this is referring to Proof-of-Stake (PoS). It is the concept of locking up a certain amount of a cryptocurrency and a computer program/node verifies transactions on the blockchain. If you are a bad actor and try to verify a faulty transaction or allow a double spend then you are financially punished by losing some or all of your crypto that is staked. Staking is a much more reliable and consistent way to earn cryptocurrency. Ethereum is moving towards PoS and many other cryptos utilize PoS as well.
Lending – refers to classical lending of money for a certain interest rate. There are resources that allow you to lend your crypto out at certain interest rates so that you earn and annual return on your crypto. Whalelend.com is a site that facilitates this. I personally have not done this, but it is theoretically a lower risk way to earn some return on your crypto in addition to its simple appreciate in price.
Make Money in Cryptocurrency by Mining
Mining cryptocurrency used to be very feasible to do on your laptop in 2010, 2011, and maybe even 2012, but since then the worth of Bitcoin has skyrocketed so high that mining has become an industrial endeavour.
So how can someone make money by mining cryptocurrency today?
Join a mining pool.
Mining pools is a complex system of a network of individual computers who share their processing power over this network to collectively contribute computational power to mine Bitcoin.
There are several public mining pools that you can join today.
- BTC.com Mining Pool
- Kano CKPool
Make Money in Cryptocurrency by Working in the Crypto Industry
The cryptocurrency industry is one of the fastest growing industries in the world. Investments in the private sector of crypto
There are so many different ways to become involved in the cryptocurrency industry. Since we are so early on in the development and adoption of cryptocurrency, getting in now allows you to be a part of building the foundations of the cryptocurrency industry. To be an early investor, build a groundbreaking tech, develop a groundbreaking app that hasn’t been done.
The different ways to make money by working in the crypto industry are:
- Work for a private crypto startup
- Content creator
- YouTube Channel
- Author (book)
- Develop an online course teaching about how cryptocurrency works.
- Entrepreneur: start your own crypto-start-up
- Regular App
- Crypto Investing Firm
- Crypto Consulting Firm (legal, technical, marketing, some market sub-specialty)
- Crypto Project manager
- … You’re the entrepreneur, get out your creative hat!
If you work for a crypto start-up company, most will offer to pay you in fiat or crypto.
By making your own content (via YouTube, Podcast, Website, etc) you can appeal to the masses by providing crypto industry updates, insights, advice, how-to guides and general discussion. Your site/Youtube channel or podcast can earn income via ad revenue, selling your own products and selling affiliate products.
Obviously, if you develop a high-quality course you can sell it to the masses. High-quality content will be rewarded with paying customers who will likely return for more of your valuable work since it provides them with value too. The key here is to actually provide value and not to scam your followers.
There is no limit to what you can do to become a successful crypto entrepreneur! The industry is ripe for development! And the more it develops, the more opportunity will be created. Opportunity creating opportunity, creating opportunity!
Markshire Crypto Conclusion on How To Make Money In Cryptocurrency
There are numerous ways to create an income with cryptocurrencies. You can easily be creative and earn a modest to insane income.
With the crypto industry being so new, you will need to put a ton of “sweat equity” into your business or content channel (YouTube, website, podcast, etc) so that you can build a customer base, or audience/readership that trusts your product and/or content. Building an honest company or website will build you lasting wealth and respect in the crypto industry.
When investing in cryptocurrencies, do not forget to account for taxation. Look up your local tax laws with respect to cryptocurrency and always keep a record of your trades, buys/sells of crypto. Record your losses and record your gains. I hope that your gains are more than your losses but if you don’t record it accurately, and set aside your profits for tax payment, you could be left with a hefty tax bill.
That all being said… I wish you the best of luck in your crypto adventure. Please comment with you ideas or ventures that you may have started. Obviously don’t comment if you haven’t developed it yet and are afraid someone might steal your golden idea.
Please feel free to drop a comment, question, or note for me. I love hearing from my readers