By now, most of us have heard of the cryptocurrency sector and know of all the amazing opportunities that lie within it. Every other day, there is a headline of just how much money cryptocurrency is bringing in for investors, and even mainstream companies are getting involved.
You will also be pleased to know that there are a myriad of ways to make money from cryptocurrency. No matter your risk tolerance, investment preferences, or even budget, there will be something for you. Here are some of the top ways to make money from the asset class:
Invest In Presales
Many of the tokens you see floating about the industry today were once in the presale stage. This refers to a period where a portion of the token supply is sold at a lower price to investors. Presales are attractive because, by buying a lower-priced token, you can resell in the future and make a lot of profit.
On top of this, presales often come with other benefits such as access to closed communities. If you’d like to take the leap and make money from a presale, do some research about the best ones. Crypto writer Tony Frank, for example, has written a list of the best crypto presales to invest in, and this should give you an idea of where to start.
Staking
Some investors find themselves particularly risk-averse and would rather generate a smaller but more reliable profit. This is where staking comes in, as it means locking away your tokens for a period of time to support the blockchain network. In return, you get a percentage back as interest after a period of time has elapsed. Staking only applies to tokens like Ethereum and Solana that are based on a proof-of-stake consensus, so make sure to confirm this. Staking can be done through various platforms and exchanges, or you could join a staking pool to maximize your rewards. Staking rewards are typically anywhere between 1% and 5%, and while this is not a dramatic profit, it is virtually risk-free and reliable.
Mining
Mining is the process through which cryptocurrencies based on a proof-of-work consensus come into existence. Mining requires specialized computer equipment and can be quite energy-intensive. When you mine a token, your device completes complex mathematical puzzles to confirm transactions across the network. Once a block of transactions is confirmed, a predetermined amount of crypto is released as a reward. Bitcoin mining is the most popular form of mining, and the rewards for this are halved every four years or so. While mining can be expensive and time-consuming, it can turn out to be quite profitable.
Speculative Trading
This is perhaps the most common way to make money from cryptocurrency. Speculative trading, at its core, simply involves buying a token at a certain price point and then reselling it later when its value goes up. While this is simple in concept, the execution is much more complex. It requires market knowledge and traders’ intuition to know the right time to buy a token, how long to wait for it to increase in value, and even the right token to buy in the first place. The speculative trading can be done manually through exchanges, using peer-to-peer platforms, or even using trading bots. But if you can figure out this system and have a bit of patience, this sort of trading can be quite profitable.
Lending
The global demand for cryptocurrency means that there is a whole market for lending crypto. This works in a similar way to lending fiat currency in that there are platforms which let you list your tokens to be borrowed. Using smart contracts, you can determine the amount of time the tokens will be lent for, the interest rate, and other terms of repayment. Because the transactions are governed by the smart contracts, repayment is done instantaneously, and there is less risk of one party cheating the other. If you have cryptocurrency you’re not currently using and you’d like to make some passive income from it, consider signing up for one of the many lending sites available.
