If you're new to Bitcoin or don't know how to make money with Bitcoin, you're not alone. While this digital currency was not well known until the Bitcoin Bubble of 2017, it has since become a popular investment for many people. So if you're looking for an opportunity to make some money with Bitcoin and ensure you're ready for the next Bitcoin growth spurt, we'll help guide you in the right direction with our top twelve tips.
A Short History of Bitcoin
Bitcoin is a decentralized digital currency introduced in 2009 by an unknown person or group of people under the name Satoshi Nakamoto. Bitcoin can be used to purchase goods and services from various vendors both online and in physical stores.
The transactions are verified by network nodes through cryptography and recorded in a public distributed ledger called a blockchain, which uses bitcoin as its unit of account.
Bitcoin has become increasingly popular in the past few years due to its price rise and how accessible it's become for people to purchase cryptocurrency. However, it wasn't until 2014 that countries like Japan even recognized Bitcoin as a legitimate currency form.
Today, you can readily purchase cryptocurrency online or even at Bitcoin ATMs located around the world. While it's still growing and has not reached its full potential, it's more widely accepted by retailers as a form of payment.
First - Do Your Own Research
When starting in the cryptocurrency market, it's essential to do your own research. Don't simply take someone else's word for it and think every investment you make will be a good one. You should always investigate what you're investing in or signing up for before making a purchase.
This is especially true when purchasing Bitcoin since this digital currency has recently received so much attention from media outlets, investment companies, and news outlets worldwide. While the hype surrounding Bitcoin may lead some people to believe it'll go up in price significantly overnight, there are still risks involved with investing in cryptocurrency.
Keep in mind that while you're doing your own research, it's also important to understand that some websites may offer biased opinions or information about their product. Therefore, you should always try to find multiple sources of data before making any monetary decisions. This will help ensure that you make the right decisions regarding how you spend your money when it comes to Bitcoin investing.
12 Top Strategies on How to Profit from Bitcoin
If you're looking to make money with Bitcoin, you may need to develop a strategy to get started. This digital currency is highly volatile - making it very appealing for many investors who are looking to grow their savings over time.
While it may sound daunting, creating an investment plan is easy and doesn't have to be overwhelming when considering all of your options. We've put together our top 12 strategies to profit from Bitcoin so that you can start on your investment journey today.
1. Buy and HOLD
- Difficulty: Easy
- Risk: High
- Speed: Slow
- Possible Earnings: Unlimited
When getting started with Bitcoin, the first strategy you may want to consider is purchasing them outright and holding onto them until they've reached their full potential. The good news about this strategy is that it's easy to get started, but the downside is that you're in for the long haul.
If you're willing to purchase Bitcoins without setting up various trades to generate more revenue, then this could be the best option available for you. Since there are no fees or commissions associated with buying coins, nothing is standing in your way from making a purchase right now. Plus, you can immediately get started by finding a PayDepot ATM near you or purchasing online.
Pros
- You can purchase as much as you want
- It's a relatively easy way to get started
Cons
- No guarantee of making money
- The volatility of the market can make it challenging to know when to sell
2. Creating and Selling NFTs
- Difficulty: Hard
- Risk: Low
- Speed: Slow
- Possible Earnings: Unlimited
Creating and selling Non-Fungible Tokens (NFTs) is an excellent way for beginners to make money through Bitcoin. You can create your own tokens by creating digital art, games, and other digital content. Then, you can sell these NFTs on secondary markets for Bitcoin. In most cases, you can set up a smart contract to help automate this process, making the entire NFT creation process more accessible.
However, since there are many NFTs out there, it can be challenging to find something that sticks or gains popularity with your potential audience.
Pros
- You can generate passive income through your NFT marketplace
- It helps promote digital art and creativity in the Bitcoin space
Cons
- Hard to get started with creating NFTs if you're not tech-savvy
- No guarantee you'll make money
3. Bitcoin Trading
- Difficulty: Mild
- Risk: High
- Speed: Fast
- Possible Earnings: Unlimited
Bitcoin trading is one of the best ways to make money with Bitcoin, and it can help grow your savings over time. The excellent news about trading Bitcoins is that essentially anyone can learn any of these training strategies by watching videos or conducting their own research. However, regardless of the process you use, there's always a risk of losing your money if you make a mistake in your investing strategy. We list a few of the most popular ways to trade your Bitcoin below.
Day trading
Day trading is one of the more popular ways to make money through Bitcoin. With this strategy, you purchase coins then sell them off again shortly after for a small profit.
Leverage Trading (high risk)
Leveraged trading uses a tool that helps investors find sale and purchase transactions with the help of capital borrowed from brokers. By increasing the purchase ability, you can maximize profits. However, if you choose the wrong transactions, it can put you in a significantly bad financial place.
Using Bitcoin Trading Bots
Bitcoin trading bots can help automate trades for you and allow you to make money relatively quickly. With the help of a trading bot, it's possible to earn $100 or more in just an hour or less. Moreover, since so many traders use them, there are tons of options out there for you to choose from when trying to find the best fit for your needs.
Shorting Bitcoin
Shorting Bitcoin is a process that allows you to make money during downtimes for the digital currency. For example, if you think the price of BTC will go down after buying it but don't want to lose all of your investment, you can sell off one coin and then repurchase it later on.
Other Trading Strategies
- Swing: This strategy focuses on cutting losses quicker by taking smaller gains on the trends circulating. While this means less profit, it can eventually earn you great returns after a while.
- Intraday: Intraday trading involves making trades within the day to profit from small price changes.
- Scalping: Scalping is a strategy in which you focus on making small profits off high volumes by watching for small price changes.
- Arbitrage: The idea behind arbitrage is to find the minor differences in prices on two markets for Bitcoin to buy and sell simultaneously and pocket the difference between the two prices.
- Position: Position traders like to find trends that will benefit them, buy during this trending time and hold until the peak of the trend to profit from it.
Pros
- You can find unique ways to make instant money from cryptocurrency
- Unlimited earning potential
Cons
- Easy to lose money if you don't fully understand the trends presented
- May have to pay taxes on short term gains depending on the country you live in
4. Lending Bitcoin
- Difficulty: Low
- Risk: Low
- Speed: Slow
- Possible Earnings: Unlimited
Lending Bitcoin is when investors will let other borrowers use their cryptocurrency in exchange for crypto dividends or interest payments. This is an excellent strategy to earn passive income on the Bitcoins you already own, as interest rates on Bitcoins can range from 3% to 17%, depending on the type of asset they're borrowing and from where.
The best part of this investment is that you're less likely to lose any money because borrowers have to guarantee loan repayment and stake their own cryptocurrency. If the loan is not repaid, investors will be able to keep the staked amount and sell off the crypto to make back the money, ensuring that investors lose almost no money.
Pros
- Easy way to make passive income on Bitcoin you already own
- Unlimited earning potential
- Low risk
Cons
- May lose a little bit of money if the borrower does not repay their loan
- Cannot use your crypto while it's being borrowed, which limits your activity
5. Staking Crypto
- Difficulty: Low
- Risk: Medium
- Speed: Slow
- Possible Earnings: Unlimited
Staking cryptocurrency is a similar strategy in which you earn money on your cryptocurrency in a passive way. In short, you invest your cryptocurrency or commit to support transactions and a blockchain network. By locking up your coins for a period of time, you can earn additional tokens and coins. This can be beneficial and provide higher returns than savings accounts or bonds.
However, you will need to commit to leaving your cryptocurrency alone and not using it when it is staked. Then, you will have freedom once this time is over to use your cryptocurrency as you want.
It's important to note that you can't actually stake Bitcoin, but you can exchange your Bitcoin for another appropriate coin to reap the benefits. To do this, you'll first want to purchase your Bitcoin through PayDepot, and then exchange it online. This process is simple and helps you achieve the desired results.
Pros
- Unlimited earning potential
- Easy way to make your cryptocurrency work for you
- Low risk
Cons
- Cannot use your crypto while it's being staked (can be seen as a con or pro)
- Higher risk than lending Bitcoin (though still low) due to volatility and other factors in cryptocurrency markets
6. Bitcoin Mining
- Difficulty: Hard
- Risk: Low
- Speed: Slow
- Possible Earnings: Unlimited
Bitcoin mining is where you buy a machine that can do complex math at high speeds to unlock new Bitcoins or blocks of new Bitcoins, which are referred to as "mining." When this happens, you will be rewarded with some percentage of the new coins created by your mining.
While you might have been able to set up your regular laptop in the early 2010s to mine for you while you carry on about your day, the process of mining Bitcoins has become a lot harder throughout the decade. As a result, you'll need a powerful machine that can run 24/7 in order to get the best results, which means it might not be worth your time.
Pros
- Unlimited earning potential due to market supply and demand
- Can use hardware for multiple purposes at once
Cons
- Requires a lot of electricity when running non-stop 24/7
- You can only mine one cryptocurrency at a time unless an additional platform is used
- Your crypto may decrease in value during the mining process
- No guarantee you'll mine crypto
7. Bitcoin Faucets and Crypto Gambling
- Difficulty: Hard
- Risk: Low
- Speed: Decent
- Possible Earnings: Unlimited
Cryptocurrency faucets are a pretty simple way to earn some money from your crypto. This can be done by going through a website that offers payouts for reaching different goals. It's important to note here, though, that the only thing you may win is cryptocurrency and not actual cash value. In other words, you will likely have to convert this crypto back into fiat currency before using it if your goal is to buy something or withdraw it from an ATM.
However, it's rare to earn very much from these kinds of websites. The payout rates are pretty low, and your earnings will likely be slow. They're considered time killers rather than legitimate ways to make money, but it can still be fun to check them out if you have some extra time on your hands.
Pros
- A fun way to pass the time
- Easy way to potentially make some crypto
Cons
- Possible earnings are meager
- You may lose more money
- Your crypto may decrease in value during this process
8. Investing
- Difficulty: Medium
- Risk: Medium
- Speed: Slow
- Possible Earnings: Unlimited
Investing with Bitcoin is a widely used strategy that can be very profitable if you do it right. In fact, some financial experts believe that this is the way everyone should invest because of the low inflation and increased transparency of blockchain technology. However, there are still risks involved with all forms of investing – especially cryptocurrency – so make sure to take appropriate measures before going forward with any kind of investment plan.
Pros
- Unlimited earning potential
- Consistent market returns could help you build a stronger future for yourself and your family
- Highly sustainable as long as you don't lose money on poor investments
Cons
- Riskier due to volatility in cryptocurrency markets
- Money that is supposed to be invested in the market could be lost if you're not careful
- Can only invest in a limited amount of currencies at a time
- No guarantee you'll make money from your crypto
9. Accepting Bitcoin as a Payment
- Difficulty: Easy
- Risk: Low
- Speed: Fast
- Possible Earnings: Unlimited
Another fun and easy way to earn money from your crypto are to accept it as a form of payment. You can do this by opening up a website with a "crypto payment" button and having people send you cryptocurrency for whatever they're purchasing instead of paying with dollars or euros. It's important to note that you will need to convert the currency into fiat currency for it to be worth anything, though.
It's essential to make sure that you have a wallet set up and ready before trying to accept crypto payments to keep it all in one place for your business's ledger and tax purposes.
Pros
- No cost involved (other than setting it up)
- It can be an effective marketing strategy
Cons
- Requires deep knowledge of cryptocurrency and how it works
- Setting up a wallet and website may be difficult
10. Affiliate Earnings
- Difficulty: Medium
- Risk: Low
- Speed: Slow
- Possible Earnings: Unlimited
Using Bitcoin to make money online is one of the most popular methods for earning cryptocurrency right now. There are tons of affiliate programs out there that allow you to earn Bitcoin by sharing their links or participating in them in some other way.
The same rules apply here as they would with any other currency you want to earn through an affiliate program. You will need a website that does its best to provide good information about Bitcoin or other cryptocurrencies and that provides helpful content around your affiliate link for this method to work well. This is because people won't trust someone who doesn't know what they're talking about or is just trying to push a site with affiliate links to make money themselves.
Pros
- Affiliate links can be placed anywhere
- Profit margin is up to you and can vary greatly depending on your marketing strategy
- No limit on how much you can earn from a single program
Cons
- Requires deep knowledge of cryptocurrency and how it works
- Website or blog might not get traffic if it doesn't have good content around the links
11. Airdrops and Forks
- Difficulty: Low
- Risk: Low
- Speed: Fast
- Possible Earnings: Unlimited
The free money from the sky has almost run out at this point, but there are still some ways to get in on that sweet crypto action if you're willing to work for it. Airdrops is the term used when a cryptocurrency company gives away coins or tokens for absolutely nothing in return. They're becoming more common as many different currencies remain in their infancy stages following ICOs.
Forks are essentially an upgrade to software or hardware that simply gives everyone using the old technology something new. For example, when Bitcoin Cash was created, it offered anyone who was using Bitcoin before an equal amount of BCH. So if you were holding $500 worth of BTC before the split, you would have $500 worth of BCH after it.
Pros
- Free money!
- No cost involved
Cons
- No guarantee of earnings or when it will even occur
12. Get Into Crypto Business
- Difficulty: Hard
- Risk: Medium
- Speed: Slow
- Possible Earnings: Unlimited
The last way to make money with Bitcoin is to start a business that deals with cryptocurrencies. This can be something like running an exchange, beginning a Bitcoin ATM business, or creating tools that helps others on their journey to acquire or sell Bitcoin.
It's essential that you have a good understanding of how cryptocurrency works from a technical standpoint or that you have someone on your team who does. In addition, if you want to start a business in the space, you'll likely need a lawyer and an accountant to ensure everything is legal and secure.
Pros
- Make money by doing something you enjoy
- Ability to work from anywhere, as long as you're online
Cons
- A lot of upfront investment
- No guarantee of profit
The Risks
There are always risks when it comes to Bitcoin because it's a volatile currency. There is no guarantee that the price of Bitcoin will stay up any given hour, day, week, or year.
Although many people have done well by investing in cryptocurrencies and earning through one of the methods mentioned above, it's always possible to lose money. A crash could cause you to lose everything you've invested into a coin at the time, so never risk more than you can afford to lose.
Do your due diligence before investing in anything new or trying out a new method of earning cryptocurrency. This way, you'll better understand the risks involved, and you can also be sure that it's something you really want to invest your time into.
Tax Management
Depending on the country you live in, you might need to consider the tax implications of earning crypto. Always check with a financial advisor to ensure you're set when it comes to crypto and taxes.
Key Takeaways
If you're ready to make money with Bitcoin, use one of the strategies we've listed above. However, with any investment, you'll want to make sure not to invest more than you can afford to lose, ensure you're aware of the risks involved and do your due diligence. To get started, purchase Bitcoin and start implementing your money-making strategy today!