Are you thinking about investing in cryptocurrency? If you are, you’re not alone. Millions of people invest in more than 5,500 different types of cryptocurrency each year.
Yet while cryptocurrencies can net you a huge return on your investment, the crashes in recent years showed that they are still unstable. Because of that, you need to have a clear understanding of how to make money with cryptocurrency.
So what do you need to know to get started?
Keep reading to learn how to make money with Bitcoin and other cryptocurrencies.
What Are Cryptocurrencies?
Before you get started trading Bitcoin and other types of cryptocurrencies, you’ll want to have a clear understanding of what exactly they are. Most people who trade don’t, but that makes them more susceptible to making poor investment strategies.
Cryptocurrencies are a form of payment that you can trade for goods, services, and actual money. Different companies create their own currencies, but you can think of all of them as digital casino chips that you need to pay to use.
Instead of relying on banks or some other centralized system, cryptos use a decentralized technology known as blockchain. Aside from putting the power in the hands of the individual (theoretically), blockchain is also safe and secure.
What Are Some of the Most Popular Currencies?
As mentioned, there are thousands of different cryptocurrencies to choose from. That being said, some are more popular than others.
Created in 2009, Bitcoin is the oldest cryptocurrency and also the one that most people choose to invest in. For many, it can be a reliable source of income, especially over the long-term.
In fact, if you invested $100 in 2010, you would have more than $48 million today.
Some of the other popular cryptocurrencies include:
- Ethereum (ETX)
- Tether (USDT)
- Uniswap (UNI)
- Stellar (XLM)
- Ripple (XRP)
- Binance Coin (BNB)
- Cardano (ADA)
While it makes sense to buy the more popular coins, Bitcoin has shown that anything can happen in the world of crypto. Do your research, invest in something you feel is worthwhile, and who knows—in a decade, you may be a millionaire.
What Are the Different Ways You Can Make Money?
As is the case with regular stocks, there are several ways that you can make money with cryptocurrencies. Given their unique nature, there are also some unique avenues to success.
Here are three of the most common tactics that people use.
If you’re looking to make a lot of money over the short-term, day trading is the way to go.
Day trading involves buying high amounts of crypto, then selling it that same day. As cryptocurrencies naturally experience large levels of fluctuations, day trading provides many people with an easy way to make money.
The income that you make from day trading might not be huge. However, with time (and luck), investors can make a lot of money,
Keep in mind that day trading is also one of the riskiest forms of investing. The rollercoaster-like tendency of cryptos might make day trading a natural fit, but it also means that you could lose a lot of money if you’re not careful.
Day traders need a lot of skills and experience to be successful, as well as more patience than most people realize.
Many people view day trading to be too risky, and because of that, they choose to invest over the long-term.
The easiest way to do that with cryptocurrencies is by buying a set amount of coins, keeping them in a digital wallet for a long period of time, then selling them back when you can make a substantial profit.
As mentioned, the long-term returns on many cryptos like Bitcoin can be huge. That being said, some financial experts are unsure about the long-term viability of cryptocurrencies.
As is the case with real currencies, there isn’t any cash flow with cryptos. Because of that, someone always has to invest more than you did for you to profit.
Up till now, however, that doesn’t seem to be a profit!
Mining is another avenue that people can take to make money off of cryptocurrencies like Bitcoin. That being said, the average person might find it difficult to make a sizeable profit.
Mining involves using your computer hardware and a lot of electricity to generate coins. Early miners found it easy to make money, but today, most cryptocurrency mining occurs in warehouses in certain regions of the world where electricity is cheap.
Most people who mine today do it because they enjoy it, not because they expect massive returns of profit.
Choose the Right Trading Program
The easiest way to get started trading cryptocurrency is to download an app or a program to help you out. Coinbase, Voyager, and Gemini are some of the most popular apps. Most of them are also beginner-friendly.
These apps contain a digital wallet where you can store your coins so that they accumulate wealth over time. They also allow you to see the value of all of the cryptocurrencies on the market at any given time.
If you’re interested in buying Ethereum, you can also check out this link.
Wondering How to Make Money With Cryptocurrency? This Guide Should Help
If you’re looking to invest in something that has an insane amount of long-term growth, cryptocurrency might be the way to go.
However, before you get started, make sure that you’re clear on how to make money with cryptocurrency. This guide should help you with the basics—after that, the rest is up to you!
Are you ready to get started with investing in cryptocurrency? If you are, make sure to check out the rest of our site for more helpful articles before you go.