If you are interested in how to make money with cryptocurrencies, there must be a million things or questions in your mind right now. I’m a newbie. What do I need to do? Is it easy? How do I learn? Can newbies makes money from this? What are the ways to earn this digital age currency?
We will try to dig deep and answer those questions in this post.
There are quite a few things that we’re sure about cryptocurrencies though. It’s that in the past years, people have earned crypto through sheer luck. But today, the highest earners succeed because of skills, thorough analysis, and a wealth of experience.
Having said so, this trending cryptocurrency is NOT easy to earn and learn. The high volatility of crypto is both its boon and bane. It may bring in various opportunities but it can also drain your money if you don’t learn how to manage your cryptos properly.
How to make money with cryptocurrencies? Read the rest of this post to find out. Who knows, it may (or may NOT) be your ticket to good fortune. Before we get any further to any of the questions, let us first answer the one below.
Is Cryptocurrency Risky?
Be it trading, investing, or merely holding on to your cryptos for the future, there are risks involved when it comes to these digital currencies. Therefore, you must gauge and learn about the risks before joining the bandwagon.
The most heard of high volatility (that we already mentioned earlier) and the absence of rules and regulations. In 2017, the value of major cryptocurrencies especially Bitcoin was extremely erratic. Bitcoin increased more than 1000 percent and then crashed. This left many devastated.
But as of late, the cryptocurrency hype has died down a bit. As a result, the price swings are more and more formulaic or foreseeable. It seems as if it follows stocks and other assets patterns.
Regulations, or lack thereof, are heavily talked about in this sphere. The weird thing is that both the absence and presence of regulations pose as a risk for the investors.
You can never proceed to learn how to make money with cryptocurrencies if you are not aware about its risks. Right?
So, what comes next?
What Should You Do Prior to Making the Big Jump?
Do you want to buy, save, and wait for the value to go up for in the future? Do you want to be an active investor? Do you want to buy and sell cryptocurrencies? Do you have transactions that involve cryptocurrencies? No matter what your reason is, you need to come up with a plan.
Think about the following:
- What currency should I buy?
- When do I buy them?
- How much do I need to buy?
- When can I sell?
You see, there are many things to think about before you learn how to make money with cryptocurrencies.
What Is the Next Logical Step?
The next step if you want to continue in learning how to make money with cryptocurrencies is to pick your cryptocurrencies. There are over 1,500 cryptocurrencies waiting to be picked out and this number is constantly growing.
There are talks that maybe some of those digital money will disappear in five years or so. While others will grow and shoot up 1000 percent. Who knows, it may take the place of traditional cash in the near future.
Anyhow, you can pick cryptocurrencies based on popularity, blockchain management, and so on. After making your choice, you need to analyze and identify the best time to purchase.
In 2017, for instance, many got to know Bitcoin better and wanted to try out cryptocurrencies themselves. The bad thing is that many people bought Bitcoin at the time it had peaked so it was ridiculously expensive. This means that they were only able to buy fewer coins. Moreover, they had to wait for the next price increase to acquire more of this asset.
If people properly managed their timing of purchase, they would have bought more. Thus, analysis is an important step – analysis of price action. Risk management is another necessary measure as this will help you turn things in your favor… and hopefully earn from this in the future.
How to Make Money with Cryptocurrencies: Different Strategies
This post will introduce a few of the many things you can do to earn profit from cryptocurrencies. As mentioned, crypto assets are highly volatile. They involve a high degree of risks which means that you need education – more than enough knowledge and expertise.
Anyhow, below are a few strategies you can learn to get started on how to make money with cryptocurrencies:
- Investing – this is a long term strategy where you buy and hold your currencies for quite some time. Generally, cryptocurrencies are better maintained in this strategy since they are volatile (yes, they really are, thus the reiteration of this fact) in the short term but present great potential long-term.
- Trading for profit – this is to make the most out of short-term opportunities. However, trading necessitates experience and skills which you cannot hone overnight. You need to learn how to read charts, and grasp technical terms and indicators. You need to know the price action or tend, and use the trend in the past to predict the rise of fall of crypto assets in the future. It is good to note though that you don’t need to be well versed with blockchain and other projects so this is less thing to study about.
- Trade Bitcoin for US Dollars – Bitcoins are not considered as traditional currency, but they are still made available for Forex trading. Fluctuation of traditional money value is small, so it is measured in small fragments of a penny. Value of Bitcoins, on the other hand, can significantly rise and fall in just one day in amounts of dollar or more. Considering their inherent volatility (yes, we already mentioned this a hundred times), traders need to drop their currencies fast to avoid being affected in an abrupt price crash However, you will only be stable if you keep your assets for the long term Confusing, right? Hence, it is safe to say that this strategy is risky and should only be left to the experts.
- Mining – this is one of the oldest ways to make money with cryptocurrencies. This is an important element of the Proof of Work (POW) mechanism. Miners, people who mine crypto assets, are compensated with new coins for performing certain roles. In the “old” days, you could mine using just your desktop. But now, you need specialized equipment to do this. If you also want to support a network, you need to run a masternode which hosts a copy of the whole network. Technical know-how and significant investment are needed for this strategy.
- Payment for products/services – for instance, if you are selling products or goods, you can tell your customers that you are accepting Bitcoin as payments. You will be surprised to know that there are many customers who are willing to pay through this option. However, you will need hardware terminal, or wallet address, and even touch screen apps if you are operating a physical store. Online Bitcoin payments will need a merchant tool to accept crypto payments.
- Wage or salaries – we have heard of people working and getting cryptocurrencies as payment. In fact, there is an increasing amount of people that choose this kind of salary over traditional cash. The reason is that these digital assets have become super enticing due to the trend.
- Gambling – we will tell you upfront that this is NOT the best way to go if you are still learning how to make money with cryptocurrencies. We will tell you though that there are online lotteries, spread betting, and casino games that provide bitcoin as prize to their players.
How to make money with cryptocurrencies? Let me put this bluntly – it is NOT easy. You will need to educate yourself. You need lots of time to learn about the basics extending to technical terms… and at some point, you will get lost and overwhelmed by all the data that you are getting.
It does not stop there. You need lots of experience to be able to come up with critical decisions, especially if you choose to partake in short-term strategies (or in any strategies as these digital currencies are extremely risky) to earn money with crypto assets.
Moreover, you need significant capital for this. You need to be willing to lose a lot as this is how you will learn.
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