When deciding how to make money with Bitcoin, you can choose between a number of methods for generating profits, each with its own unique benefits and drawbacks. Since it is an emerging new asset, there is very little regulation of Bitcoin, as world over, governments and legislators are still catching up with developments in the […]
When deciding how to make money with Bitcoin, you can choose between a number of methods for generating profits, each with its own unique benefits and drawbacks.
Since it is an emerging new asset, there is very little regulation of Bitcoin, as world over, governments and legislators are still catching up with developments in the crypto arena. However, in this exciting, decentralized ecosystem the opportunities are endless.
In the aftermath of COVID 19, with a looming global recession, 2021 is likely to see a strengthening of alternatives to fiat as traditional currencies lose purchasing power. Many see this as the time for Bitcoin to fulfill its promise and transition to the mainstream.
Want to know how to make money with cryptocurrency in 2021? Here are some of the top methods being used by the worlds growing community of Bitcoin investors.
If you want to make money cryptocurrency trading, the basics are easy. It essentially involves buying and selling a digital asset on cryptocurrency exchanges, either as a long-term investment or for short-term speculation.
The idea? To buy your Bitcoin for as low a price as possible and then sell it for a higher price for a profit, minus the commission you pay on the trade.
For any investor deciding how to earn money trading Bitcoin, the decision often comes down to risk-tolerance. You may hear that Bitcoin is currently booming, or prices are low now and it’s the perfect time to get on board. Both these statements could be equally true within a matter of hours, as the crypto markets, and Bitcoin in particular, are exceptionally volatile.
Any cryptocurrency basic trading guide will tell you that trading on Bitcoin is a risky proposition. While the wild price fluctuations offer fantastic opportunities, Bitcoin’s extreme volatility can also lead to significant losses. In fact, you simply need to consider the price peak of around $20,000 in late 2017 and the sudden drop of more than 70% of its value, within just a few months in 2018. Adoption has grown considerably since then, which has contributed to the increased stability of the coin. However, Bitcoin is still primarily characterized by its volatility and short-term traders analyzing and exploiting intraday Bitcoin price swings profit from the lucrative opportunities this provides, while also incurring substantially higher risk than for almost any other asset.
If your blood pressure can take it, you have the market knowledge and experience to know exactly when to buy and sell, then consider short-term Bitcoin trading a great investment opportunity that can be incredibly profitable.
Taking the long view? If you want a safer, slower route then there is always HODLing. It is basically, a strategy of buy and hold. Regardless of what is happening to the current price of Bitcoin, a HODLer is an investor who holds their position for the long haul and waits out every storm. They are working on the assumption that over time, Bitcoin and blockchain technology as a whole will gain ground, with increased adoption and subsequent demand for the currency that will lead to a significant rise in value.
The phrase HODLing, stemming originally from a misspelling of the word “holding” in a post by a crypto investor, later came to be known as an acronym for “Holding On for Dear Life”, an apt description when you consider the wild swings for which Bitcoin is known.
Either way, HODLing is a far less risky business than day trading, but requires you to hold your nerve even on those occasions when the Bitcoin price seems to be in freefall.
Unlike traditional currencies, where the government is in control of printing and distribution, Bitcoin is mined. Bitcoin miners solve computational problems, confirming blocks of transactions and being paid in newly mined Bitcoin and fees.
Any discussion of how to make money with bitcoin mining, needs to touch on the danger that the cost of mining might exceed the amount that can be earned. Setting up and running a Bitcoin mining operation can cost a great deal, particularly in terms of electricity usage. In addition, you don’t just need the specialized software but also the expensive hardware to ensure the processing power necessary to mine complex algorithms. As a result, many miners come together to form mining pools to combine their processing power and beat competitors in the race to complete blocks of transactions. The fees are then distributed among the pool members.
If you are willing to put in the time this can be a profitable enterprise.
Prefer slow but steady, with a lot less effort? Try a Bitcoin faucet.
A Bitcoin faucet “drips” out small increments of Bitcoin to attract visitors to a site and expose them to various ads. It is a website where you can earn Satoshi, (a subunit of Bitcoin) in return for completing a captcha or a brief task. At various intervals, sometimes just a couple of minutes apart, you can input your BTC wallet address to receive your reward.
A Satoshi is just a hundred millionth of a Bitcoin, so while a Bitcoin faucet doesn’t require much work, the rewards are equally modest.
When choosing how to make money with cryptocurrency in 2021 your top priorities are going to be maximizing profits and minimizing risk and this is where crypto arbitrage shines brighter than almost any other investment strategy.
Like many forms of online crypto investing, it involves the use of an automated cryptocurrency trading platform. An algorithm monitors multiple crypto exchanges simultaneously, 24/7 to find temporary price inefficiencies. These are instances where, for a brief time, Bitcoin or another cryptocurrency is available at different prices at the same time, across a number of exchanges. The system will identify these crypto arbitrage opportunities, buying the coin on the exchange where it is currently cheapest and then instantly selling it on the exchange where it is going for the highest price before the window closes and the temporary price difference disappears.
The returns are reliable, and the risk is minimal, making it an attractive option for Bitcoin traders. Here at ArbiSmart, our automated algorithmic trading platform offers profits reaching as high as 45% a year, depending on the amount deposited. ArbiSmart is also fully EU licensed, making it a safe, regulated space for investors unsure who to trust in the crypto arena.
As we can see there are all kinds of ways to make money with Bitcoin in 2021, but not all of them share the same revenue potential or level of risk. When deciding how to make money with Bitcoin, you need to determine what your profit goals are and how much risk you are willing to tolerate to reach those targets within a given time frame. If you are asking yourself “Can I make money buying Bitcoin?”, the answer is absolutely. You just need to be aware of the extreme volatility of this exciting emerging asset and choose a strategy that enable you to exploit these price swings, while mitigating your exposure.
Crypto lending arbitrage is equally straightforward, referring to the process of taking out a digital currency loan from one lending source, which has a low interest rate, and then reinvesting that same crypto sum elsewhere to earn a higher rate of interest.
Yield farming provides an effective means of earning a steady, sky-high return on your crypto capital. It involves using Decentralized Finance (DeFi) solutions to earn exceptional profits that far exceed those offered by any bank, or other traditional investment channel. DeFi is a digital ecosystem covering a vast array of decentralized financial protocols, products and […]