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In 2020, cryptocurrency gained crucial momentum, with significant firms and financial institutions expressing interest in acquiring bitcoin exposure. While everyone can purchase cryptocurrencies, there are additional ways to obtain BTC and other coins and diversify your portfolio without making a sizable initial commitment.
Cryptocurrency, as a novel set of technology and an asset class with a rapidly developing community of ardent advocates, presents traders and investors with interesting options. Bitcoin’s popularity and price have exploded as a result of its sponsorship by companies like Microstrategy and Tesla, as well as its adoption as legal cash by nations – and there is reason to expect that crypto will continue to gain traction in the months and years to come.
Not just institutions with huge pockets are purchasing cryptocurrency. Anyone can gain access to these new digital assets, with typical retail traders demonstrating an enthusiasm for crypto holdings. While purchasing coins via an exchange is the simplest method of acquiring cryptocurrency, there are numerous alternative methods.
Earning crypto (the easy way)
This article looks at some of the easiest ways to earn bitcoin and other cryptocurrencies. They’re suitable for almost anyone, and they don’t require a large up-front investment – you can get started with just a little capital, or none at all.
They also work for those who aren’t super tech-savvy. For example, while mining can be a good way to get into crypto, it won’t be discussed here as it generally requires specialist hardware and a fairly technical understanding of the space, making it inaccessible to many people.
As a crypto novice, your goals should be twofold: to increase your crypto portfolio and to learn as much as possible about this new asset class. The more you learn and comprehend crypto, the more options you’ll have to investigate and buy intriguing new currencies.
One of the most effective methods to achieve both is to participate in ‘Learn and Earn’ campaigns, such as those offered by Coinbase (one of the world’s largest and most popular exchanges) and industry publication CoinMarketCap.
The concept is straightforward. You’ll watch movies and read articles that provide essential knowledge about various cryptos. Following that, you’ll be asked a few questions to ensure you’ve comprehended everything correctly. Finally, you’ll receive a modest quantity of that cryptocurrency. It’s only a few dollars each time — Coinbase Earn, for example, tips between about three and ten dollars for each coin – but with so many cryptocurrencies listed, the total quickly adds up. In any case, it’s the beginning of your priceless crypto education.
Other websites and cryptocurrency initiatives expand on this concept by offering a far broader range of microtasks, dubbed ‘bounties’ in the crypto realm. You can earn crypto tips by completing little tasks such as following a social media account or sharing an article to assist with promotion. Again, the amounts may seem insignificant, but they pile up, and you’ll also acquire access to these groups, which may lead to further chances.
2. Obtain a crypto-related job
Microtasks are one thing, but if you want to make significant quantities of cryptocurrency, you must think broader.
If you are familiar with the cryptocurrency field and possess relevant skills and experience – for example, if you are a developer or have a history in marketing and public relations – you can apply for one of the several blockchain-related jobs currently available (a LinkedIn search is a good place to start, or you can look through the recruitment pages of different DeFi and crypto sites). In many circumstances, salaries will be paid in cryptocurrency, or a portion of the salary will be paid in cryptocurrency, or there may be performance- or time-based token bonuses.
If you’re not searching for a full-time position, or even a career in the blockchain sector, you can still work for crypto as a freelancer. LaborX and CryptoTask enable freelancers to promote gigs or fulfill customer-posted tasks in exchange for cryptocurrency. These positions can be found in a variety of sectors, including graphic design and marketing, as well as in more technical fields such as software development.
Whether you work part-time or full-time, freelancing or on a regular basis, there are numerous websites that allow you to earn cryptocurrency by working.
3. Staking and Yield Agriculture
While cryptocurrency has a reputation for being a high-risk investment, the blockchain world offers numerous chances to make relatively safe returns.
Proof of Stake cryptocurrency platforms enable users to earn additional coins by encrypting their existing holdings in order to contribute to network security. (This is a far more user-friendly procedure than Proof of Work mining, and typically requires merely authorizing a crypto wallet to stake your coin balance.) Staking yields normally range between 5% and 10% each year, however they are paid in the coin itself, which clearly fluctuates in value. If you earn a proof-of-stake cryptocurrency such as Cardano, Cosmos, or another, this is a simple way to invest your cash.
TimeWarp extends this concept by using money generated by an ecosystem of blockchain services to repurchase tokens from a finite supply currently on the market in order to reward stakeholders. The returns on this and comparable initiatives can be as high as 100-200 percent, or even higher, because the tokens’ value might gain fast as a result of the increased buying pressure. (Of course, the value may decrease as well.) Although certain DeFi staking projects provide even larger yields, returns are often inversely proportional to risk – the higher the yield, the greater the likelihood that something will go wrong.
Additional revenue streams are accessible through the emerging sector of Decentralised Finance (DeFi), which intends to provide financial services such as lending and trading without the use of intermediaries. In comparison to traditional finance (TradFi), the yields on platforms like Aave, Compound, and others can be rather substantial. When governance tokens are included (additional prizes paid in the project token to incentivize liquidity providers), double-digit % annual percentage yields are typical. The practice of’yield farming’ has developed, in which users allocate their wealth to the best prospects, shifting it everyday as new protocols provide higher rewards.
To assist customers in obtaining the best prices without continually monitoring the market and actively updating their positions, a new family of ‘CeDeFi’ (centralized DeFi) projects has been launched. Among these are well-known platforms such as Celsius, Nexo, BlockFi, and Yield. Each case follows the same procedure. Users deposit cryptocurrency into the platform, which acts as a centralized exchange, and the platform then allocates funds to the most promising possibilities. Rates vary according to whatever cryptocurrency users hold, but can approach 20% per year for stablecoins such as USDT and USDC.
4. Trade or make an investment
Cryptocurrency trading is a popular activity, with some individuals profiting handsomely. Trading, on the other hand, can be perilous, as the cryptocurrency markets can be quite unpredictable. In general, trading and investing can be classified according to the time intervals within which consumers seek profit:
Day trading — trading for a period of less than a day
Trading swings – a few days to a few weeks
Trading positions – months to years
HODLers – indefinite/years
By and large, the shorter the time frame, the greater the risk, with day trading being the most dangerous (especially when leverage is used, since this magnifies both gains and losses). Your preferred trading technique will be determined by your personality and financial resources; day trading, for example, can be stressful and may not be suited if you are unable to maintain a sustained attention on the markets throughout the day. However, the same fundamental trading principles apply regardless of time range, and understanding a little can assist increase your chances of benefitting from the markets. BabyPips breaks down the major indicators and techniques into simple lessons, giving you an advantage over people who view trading as a game of chance.
Some of the most successful cryptocurrency ‘traders’ have actually been HODLers: those who purchase bitcoin and other cryptocurrencies and keep them for years, regardless of the market’s performance. While they have had to endure occasional 90 percent value losses, they have also watched the aggregate worth of their investment increase hundreds, if not thousands, of times. (Of course, this is not always easy, particularly when the rest of the crypto community appears to be panicking and selling their coins.)
Purchasing and trading cryptocurrency is straightforward now that a diverse array of exchanges is available to users. Some, such as Coinbase, are global in scope and cater to users worldwide. Others are designed to serve consumers in specific jurisdictions — or they can be used globally, but have unique banking arrangements that make it simple to get started with other national currencies. For instance, TimeX is an exchange based in Australia that is open to anybody but allows quick deposits and withdrawals of Australian dollars, whereas Bitstamp is a popular exchange for European customers.
5. Drops via air
By giving out tokens, new crypto projects frequently bootstrap their communities and create awareness about what they’re doing. These can be dispersed in a variety of ways. For instance, when Uniswap, a prominent decentralized exchange, issued its own token (UNI), it airdropped tokens to all addresses that had previously utilized the exchange. All that was required of users was to claim their reward, which was worth more than 1,000 USD at the time (and is now worth even more).
In other circumstances, members who join a Telegram or Discord community or contribute to an ecosystem in various ways would gain tokens. Often, it’s as simple as enrolling with an email address and a crypto address.
6. Electronic commerce
Finally, anyone who offers goods or services online should consider incorporating cryptocurrency payments into their site. A variety of e-commerce plug-ins, like Coinbase Commerce, Coingate, and BitPay, make it simple to accept cryptocurrency. These can be used in conjunction with or in place of standard payment processing.
Apart from the fact that you can keep the tokens you get, there are further benefits to accepting crypto payments. Due to the fact that crypto payments are borderless and open, they enable retailers to expand their consumer base and sell to customers located anywhere in the world. Buyers are not even need to have a bank account. Additionally, because crypto payments are irreversible, retailers are safe from chargebacks – situations in which a client pays for a goods, receives it, and then claims the purchase was fraudulent. The credit card company reverses the transaction, resulting in a loss for the vendor. Finally, you may be able to appeal directly to the crypto community, establishing a foothold in this rapidly emerging ecosystem by demonstrating your support for the new technology.
Develop your cryptocurrency portfolio
Whatever method you choose to earn crypto, it’s worth considering which cryptocurrencies and tokens you want to hold. Different cryptocurrencies have varying risk and reward profiles: while some may appreciate significantly in the future, this may also mean they crash harder (in some cases, becoming all but worthless).
Diversification is one strategy for spreading risk, as it prevents all of your gains/losses from coming from a single token. This also reduces your total potential gains and losses, but investors generally view this as a worthwhile trade-off.
In practice, if you earn cryptocurrency, you may receive a combination of BTC, ETH, altcoins, and stablecoins. Your allocation to each of these will depend on a number of factors, including the urgency with which you require funds, how you envision the space developing over the next few months and years, the level of risk you are comfortable taking, and whether you have a particular interest in a particular project or community.
Regardless of your choice, maintaining an updated crypto portfolio and cashing out funds to your local currency when necessary is made simple by the abundance of centralised and decentralised exchanges presently available.