Three Ways To Make Money On Cryptocurrencies

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Since the beginning of 2021, bitcoin has risen in price by almost 40%. In mid-April, the main cryptocurrency reached a historic high at arou...

Since the beginning of 2021, bitcoin has risen in price by almost 40%. In mid-April, the main cryptocurrency reached a historic high at around $ 64.3 thousand. Over the past two months, the digital coin has fallen in price by 37%.

The largest altcoin by capitalization, Ethereum, has grown by 238% since January 2021. Its price rose to $ 4.3 thousand in April (an increase of 482%) and then went down. Now altcoin is trading at $ 2.2 thousand, writes RBC Crypto.

Such profitability allowed holders of digital coins to increase their capital several times. To do this, it was enough to buy a cryptocurrency and hold it. We will tell you the main ways that even beginners will make a profit in the field of digital assets.

Investment

Buying digital coins for their long-term retention is considered a classic way of earning money, which does not require deep involvement in the market, and is also completely passive. The main feature of this method is its long-term nature.

The cryptocurrency shows high profitability over the long term. For example, when buying bitcoin in January of this year, you could get a yield of 40%. But, if the main cryptocurrency was bought in June last year, then the return on investment would be 335%. Buying bitcoin in June 2016 would bring the investor 6919%. However, it should be borne in mind that previous growth does not guarantee a future rise in asset prices.

When investing in digital assets for a long time, it is necessary to adhere to a trading strategy, not reacting to short-term changes in the exchange rate. You also need to ensure the safety of your investments. To do this, it is recommended to use a hardware (cold) wallet and store it, as well as the seed phrase, in a safe place.

The seed phrase is a set of random 12, 18, or 24 English words that are used to recover a cryptocurrency wallet.

Airdrop

For those who do not want to invest their own funds, but want to get cryptocurrency, there is a way to make money on distributions and performing various tasks. There are services that pay with digital coins for simple actions, for example, installing a mobile application on your device or following on social networks.

For example, the Brave browser pays cryptocurrency to view advertisements, and the Steemit social network rewards users with digital coins for activity: views, likes, reposts, and comments.

Airdrop is a free token giveaway that runs crypto projects to attract a new audience. For example, the developers of the Uniswap decentralized exchange have already handed out 400 tokens to new users. To do this, it was necessary to perform any operation on their platform. At the time of distribution, the cost of 400 tokens was about $ 1.3 thousand. Now, these digital coins cost $ 9.3 thousand (yield 615%).

The most active users received from 95 thousand to 245 thousand coins. The asset rate at that time was from $ 250 thousand to $ 750 thousand. About 50 more people received from 10 thousand to 95 thousand coins, that is, $ 25-250 thousand.

The free distribution of tokens in December last year was carried out by the 1inch decentralized crypto exchange. One of the users took a reward in the amount of 9.75 million tokens, which at the exchange rate at that time was more than $ 25 million. Another 3 users received from 1.21 to 1.34 million 1inch - this is from $ 3 million to $ 3.35 million. 37 traders were withdrawn from the wallet rewards from 100 thousand to 700 thousand coins - from $ 250 thousand to $ 1.75 million. An award of $ 25 thousand - $ 250 thousand in the project's cryptocurrency was received by 190 people.

Staking

Staking is a way of passive earnings, in which users store coins on the Proof-of-Stake (PoS) algorithm and ensure the operability of the blockchain. This gives them the right to receive remuneration. To earn money on staking, additional equipment, and large computing power are not required, as for mining.

For staking, you need to buy a cryptocurrency and freeze it in a special wallet. In this case, the average yield will be from 1% to 20% per annum. For example, crypto exchange Binance is now offering staking of its internal token with a yield of 8.4%. Staking can be a complement to investing. However, it is worth considering the risk of a decrease in the value of tokens involved in staking. In this case, there is a possibility of losing your savings.

To start staking, you need to learn how the PoS algorithm works, as well as familiarize yourself with the available offers on the market. For example, the Binance crypto exchange offers staking of other tokens such as Ethereum, Tether (USDT), and Chainlink.

By the end of 2021, Ethereum plans to switch to the Proof-of-Stake algorithm as part of the blockchain update to version 2.0. This will allow altcoin holders to block their digital coins to ensure the network is operational and receive a reward for this.

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Cryptocurrency Magazine - Crypto Market Updates: Three Ways To Make Money On Cryptocurrencies
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