“How do I make money with cryptocurrency?” is a common question beginners ask when getting started with crypto. Cryptocurrency offers several opportunities for you to invest and earn a passive income.
While there are significant risks associated with crypto (as with all investments), the benefits are wide-ranging, and proper research and planning can help mitigate some of those risks.
Keep reading to find out some of the best ways you can make money with crypto today even without much experience or a large budget.
How to make money with Cryptocurrency
Before you start earning with cryptocurrency, it’s important that you research the coins available. This is because each coin has its unique features and risks, so take your time to choose the one that works for you.
Next, pick a crypto wallet. Different wallets serve different purposes, so consider factors like your security needs, goals, available features, popularity, customer support, and compatibility with local currencies before making a decision.
Once you’ve selected your cryptocurrency and wallet, you’re ready to start earning. Here are some of the best ways to make passive income with crypto today:
1. Crypto Mining
Most cryptocurrencies are created through a process called mining, which involves solving complex cryptographic problems. Miners earn rewards in the form of new cryptocurrency for solving these puzzles—a process known as Proof-of-Work (PoW). In PoW, you compete with other miners to be the first to solve the encryption on a block.
Mining requires time, patience, and technical skills. If you’re considering mining, you have two main options: cloud mining or hardware mining.
- Cloud mining: Cloud mining allows you to rent computing power without directly installing hardware or software, making it more accessible.
- Hardware mining: Hardware mining, on the other hand, involves purchasing and maintaining mining rigs, but it typically yields higher rewards compared to cloud mining.
To start, you can turn a computer into a miner and join a mining pool—a group of miners who combine their resources to solve problems faster. This usually requires a dedicated GPU and some technical knowledge of programming and computer systems.
However, mining can consume significant resources, including electricity, which adds to operating costs. Mining rewards also decrease over time, such as Bitcoin halving every four years, while costs remain constant. Because of this, mining tends to be more profitable in the short term than in the long term. Always do thorough research before investing in mining.
2. Crypto Trading
Trading is one of the most popular ways to make money with cryptocurrency. It involves taking advantage of price fluctuations—buying when prices dip and selling when they rise. While it can be highly profitable, trading is also one of the riskiest methods due to the constant volatility in crypto prices.
To trade successfully, you will need to study the market to understand trends and timing. It’s common for traders, especially beginners, to incur losses as they learn the ropes.
Here are two main types of cryptocurrency trading:
- CFD Trading: This method lets you speculate on crypto price movements without owning the assets. Essentially, the buyer agrees to pay the seller the difference between the starting and ending price of a crypto asset during the contract period.
- Trading via an Exchange: This involves buying and selling cryptocurrency directly through a crypto exchange. Unlike CFD trading, you own the assets here. To get started, choose a reliable exchange like Binance, Mular, or Coinbase. Buy the quantity of cryptocurrency you want, store it in your wallet, and sell when the price rises.
That said, trading on an exchange isn’t as simple as it seems. You’ll need to study the platform, analyze market trends, and decide the right time to sell. Success requires both patience and careful planning.
3. Staking
Staking is a straightforward way to make passive income with cryptocurrency. It involves holding a certain amount of cryptocurrency for a set period to support the operations of a blockchain. In return, you receive rewards based on the quantity and type of cryptocurrency you stake. This method is less risky and doesn’t require a lot of technical expertise, making it perfect for beginners.
Staking operates on a Proof-of-Stake (PoS) system, where participants “stake” their cryptocurrency to validate new transactions and add blocks to the blockchain. This process helps ensure that only legitimate and verified data gets recorded. If you validate accurately, you earn more cryptocurrency as a reward.
However, staking isn’t without its risks. If you improperly validate flawed or fraudulent data, you may lose some or all of your staked cryptocurrency. Despite this, staking remains one of the easiest and safest ways to earn with crypto while contributing to blockchain security.
4. Investing in Cryptocurrency
Investing in cryptocurrency works similarly to other financial investments—you purchase a certain quantity of cryptocurrency and hold it, waiting for its value to grow over time.
For example, Bitcoin’s value skyrocketed over the years; 10,000 bitcoins that once could buy only two boxes of pizza are now worth enough to buy 1,400 Lamborghini Aventador. While such dramatic increases may not happen again, the potential for growth remains. Investing in crypto can help you secure your financial future while growing your wealth.
To start investing, sign up on a reliable crypto exchange, verify your account, and purchase digital assets. Store them securely in your wallet until your investment matures. If you prefer diversified exposure, consider investing in crypto index funds, mutual funds, or exchange-traded funds (ETFs) that mimic market performance.
Before you invest, research the market and analyze trends to improve your chances of significant returns. With patience and careful planning, crypto investing can be a lucrative way to grow your portfolio.
5. Yield Farming
Yield farming is a way to make money with cryptocurrency by contributing your coins to a lending pool. These coins are then lent out to others, and you earn interest in return. It works similarly to how banks generate revenue, but in this case, you’re participating directly in the lending process.
Your earnings from yield farming depend on the loan amount, duration, and interest rate. Some decentralized finance (DeFi) platforms and exchanges also pay you additional rewards for lending your coins, making it a great way to earn passive income.
While yield farming is relatively low-risk compared to active trading, it’s important to use trusted platforms. Some of the top platforms for yield farming include Uniswap, Curve, and Balancer. Always do your research before committing your funds to ensure your assets are secure.
6. Play-to-Earn Games
Playing games remains the most exciting way to make money with cryptocurrency. Games like Axie Infinity and Decentraland reward players with digital assets, this way, you can make money while having fun.
How It Works:
- Axie Infinity: In this game, you collect and battle creatures called Axies. By participating in battles and completing tasks, you earn Smooth Love Potion (SLP) tokens, which can be traded for other cryptocurrencies or fiat money. Additionally, you can breed and sell Axies as NFTs.
- Decentraland: This virtual world allows you to buy, develop, and sell parcels of land as NFTs. By creating and monetizing content or experiences on your land, you can earn MANA tokens, Decentraland’s native cryptocurrency.
These games run on blockchain technology, giving players true ownership of their in-game assets. By rewarding players with cryptocurrency, they encourage more engagement, boosting the game’s value and drawing in more users. It’s a win-win for both players and developers.
7. Initial Coin Offerings (ICOs)
ICOs are a method for new cryptocurrencies to raise funds by offering initial quantities of their tokens to investors. Participating early can lead to significant returns if the project succeeds. For example, Ethereum’s ICO in 2014 raised over $18 million, and early investors have seen substantial gains.
However, ICOs carry considerable risks. The space has been plagued by scams, with fraudulent projects exploiting investors. A study found that out of 1,014 ICOs, 576 were scams resulting in over $10 billion in losses.
To protect yourself:
- Research the Team: Verify the identities and track records of the project’s developers and advisors.
- Read the Whitepaper: Ensure it clearly outlines the project’s goals, technology, and roadmap.
- Assess Community Engagement: Active and transparent communication channels can be a sign that the foinbodfering is legitimate. .
- Check Regulatory Compliance: Be aware of the legal status of ICOs in your jurisdiction.
8. Affiliate Programs
Crypto affiliate programs let you earn commissions by referring others to a platform. For example, Mular offers up to a $300 referral bonus, awarded on your 1st, 5th, 10th, and 15th referrals. Bonuses unlock as you meet specific criteria and increase your spending.
This method is low-risk and straightforward. Simply share your referral code with friends and family; when they sign up using your code, you earn rewards. No special skills or market knowledge are needed—just promote a platform you trust and use.
Wrapping Up
There are countless ways to make money with cryptocurrency, and when done right, it can bring significant returns—even turning into a full-time income stream. However, success in crypto always comes down to proper research and due diligence. Just as there are legitimate opportunities, there are also scams, so take the time to study the platform, understand the risks, and make informed decisions to maximize your profit.
Disclaimer
The information provided in this article is for informational purposes only and should not be considered financial advice. We do not endorse or recommend investing in any specific cryptocurrency or taking any particular action. Always conduct your own research and consult a financial advisor before making any investment decisions.