If you want to learn how to make money investing in cryptocurrency, you’re in the right place. We’ll show you all the trading tricks that advanced traders use to boost their income.
Should I invest in cryptocurrency? This was our first question after learning about blockchain technology.
We’ll explore six straightforward ways to invest in cryptocurrency and earn passive income. This strategy allows you to invest a small amount of money while still having good potential for returns.
Not everyone has a lot of money to put into the market or buy the most popular cryptocurrency, Bitcoin.
So, let’s dive into six proven methods to make money with cryptocurrency investments.
Table of content
- How to Invest in Cryptocurrency
- Cryptocurrency Investment Strategy #1: Long-Term Investing – HODL
- Cryptocurrency Strategy #2: Passive Income from Dividend Payouts
- Cryptocurrency Investment Strategy #3: DeFi
- Cryptocurrency Investment Strategy #4: Airdrops
- Cryptocurrency Investment Strategy #5: Mining
- Cryptocurrency Investment Strategy #6: Hard Forks
- Cryptocurrency Investment Strategy #7: Research ICOs
- Conclusion: How to Make Money Investing in Cryptocurrency
How to Invest in Cryptocurrency
Finding the right cryptocurrency investment strategy that suits your needs and goals is the best way to start. This guide will give you an overview of various ways to make money with cryptocurrencies.
Cryptocurrency Investment Strategy #1: Long-Term Investing – HODL
Much like investing in the stock market, you can invest in Bitcoin and other altcoins with a long-term mindset. Most cryptocurrency traders adopt the HODL mentality, holding a coin for the long-term in hopes of profiting from a price rise. HODL, a staple term in the crypto world, stands for “Hold On for Dear Life.” This strategy works well, especially if you believe in the cryptocurrency’s long-term success.
But how do you invest in cryptocurrency during a bear market? The key is to diversify your investment strategy.
Cryptocurrency Strategy #2: Passive Income from Dividend Payouts
Passive income is regular income that requires minimal effort to maintain. While traditional dividend payouts from stocks are a source of passive income, few traders know that some cryptocurrencies also offer dividends. Coins like NEO and VeChain pay dividends between 5% to 10% per year, received in cryptocurrency. For example, NEO holders earn dividends in the form of GAS, which is used on the NEO blockchain. This can be more lucrative than the 2-3% interest rate from your bank. Consider adding dividend-paying cryptocurrencies to your portfolio for diversification and cash flow.
Cryptocurrency Investment Strategy #3: DeFi
DeFi, or Decentralized Finance, is an exciting area for crypto investors. Unlike centralized banks, DeFi operates on decentralized platforms owned by participants. Participants receive rewards from transaction fees, reducing the risk of corruption. By creating LP tokens and providing liquidity, you can share in the transaction fees and gain from holding the tokens.
Cryptocurrency Investment Strategy #4: Airdrops
Airdrops allow you to earn free coins when a blockchain project distributes tokens to the crypto community. While you may need to own a specific token to qualify, airdrops provide free assets, encouraging people to use the new cryptocurrency. Engage with token communities to stay informed about airdrops and maximize your earnings.
Cryptocurrency Investment Strategy #5: Mining
Mining involves creating new bitcoins by solving complex equations with powerful computers. Every Bitcoin transaction must be verified and added to the blockchain. As more bitcoins are created, the difficulty of mining increases, but successful miners are rewarded with bitcoins. With a finite supply of coins, mining can be a profitable venture if done correctly.
Cryptocurrency Investment Strategy #6: Hard Forks
Using Bitcoin as an example, a hard fork occurs when there’s no consensus on updates, splitting the blockchain into two. This results in a new coin, like Bitcoin Cash. For every Bitcoin you own during a hard fork, you receive an equivalent amount of the new coin. This is similar to a stock split and can be a lucrative opportunity.
Cryptocurrency Investment Strategy #7: Research ICOs
ICOs, or Initial Coin Offerings, are similar to IPOs in the stock market. By investing in a new token or coin, you can get in early on promising projects. Thorough research is essential to identify valuable opportunities and avoid scams.
Conclusion: How to Make Money Investing in Cryptocurrency
The cryptocurrency market is highly volatile, so a solid investment strategy is crucial. Despite market fluctuations, blockchain technology holds tremendous potential. Try these strategies and see where they lead. Remember to do your due diligence, as the decentralized crypto market is rife with scams. For further reading, check out our article on the best cryptocurrency investments.
Also Read: How to Start Trade Bitcoin: 3 Fast Profit Strategies for Beginners
