Bitcoin, also known as BTC, is the most popular cryptocurrency in the world. So it’s no surprise that people are becoming increasingly interested in learning how to make money with Bitcoin.
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How to Make Money with Bitcoin
From trading Bitcoin to investing or mining it, there are many different ways you can make money with bitcoin. And, how much you make with Bitcoin largely depends on the strategy you use and how well you know it. Here, we will show you 7 different ways through which BTC can make you smile to the bank.
Overview of Bitcoin
Bitcoin is a cryptocurrency; a digital currency. Being a digital currency means that it is entirely virtual and at the moment, it does not have any physical form. But just like fiat currency, you can use it to purchase products and services; that’s what makes it a currency.
Although not many businesses accept BTC at the moment, it is increasingly growing in popularity and usage. Presently, online payment service providers such as PayPal allow their customers to transact with Bitcoin.
This article aims to guide you on the basic principles of how to read a crypto chart.
After reading this article, you should be able to identify candlesticks accurately and correctly on any crypto trading chart. You will be able to interpret the information represented by a candlestick and understand how candlestick patterns are formed.
So, let’s go through the basics first and build a foundation that will make learning how to trade simple.
7 Ways You Can Make Money With Bitcoin
Mining is one of the most popular ways to earn money with Bitcoin, but that is if you know the right way to do it. As a miner, the Blockchain network rewards you with BTC for generating new blocks.
#1. Mine Bitcoin
There are two major ways to go about bitcoin mining:
- Personal Mining: This type of Mining is done individually. You make efforts to crack the code and get a reward. Mining requires powerful computers, and some other maintenance prices, and doing it alone may be tough.
- Cloud Mining: This type of mining is less demanding than personal mining. You do not need to buy software or hardware or pay any recurring maintenance charges. With only a one-time investment, you get other miners to mine for you. The individuals in the group split the miners’ fees and the rewards among themselves.
However, you need to take caution with this approach. Always verify the credibility of the cloud mining company or group before investing your money.
Generally, there are some factors to consider if you want to mine bitcoin efficiently. Such factors include:
- Choice of hardware: You should go for an Application-specific Integrated Circuit device(ASIC). Also, you must consider the electricity consumption level of the hardware. Go for the one that consumes electricity less.
- Availability and cost of electricity in your location.
- Market conditions: With the right market condition, you can expect your venture to yield profit.
#2 Bitcoin Trading
Trading is basically speculating on the movement of the price of bitcoin, whether the price will rise or fall. This is known as technical analysis and generally, trading bitcoin is highly volatile, so you can maximize the price fluctuations to make a profit.
However, trading Bitcoin profitably requires concrete and updated knowledge of the market. Here are some guidelines to increasing your success potential as a trader.
Study the Price Movement of Bitcoin
There are certain factors that influence the price of bitcoin. They include:
- Volume of Supply: Currently, the supply of bitcoin is capped at about 21 million. From predictions, it will be spent by 2140. A limited supply means an increase in future prices.
- Integration: This is concerned with how well BTC is fitting into new payment networks and banking structures. If positive, it can increase the demand for the coin and that in turn increases its price.
- News: News related to the security of the coin can either impact its value negatively or positively. For instance, if a renowned company such as Microsoft announces that they’re investing in BTC, the value might rise, and vice versa.
- Key incidents: Changes in regulations, insecurity, and macroeconomic news can add up to affect the prices of bitcoin.
Choose a Trading Strategy
There are different ways you can trade Bitcoin depending on your investment goals. Some of the most popular trading strategies include:
- Day trading: Another name for this strategy is “intraday trading”. It allows you to open and close a position within a single trading day, and avoid overnight funding charges on your position. Day trading is the best option for people who want to take advantage of bitcoin’s short-term price movements.
- Bitcoin hedging : This is a risk-mitigating strategy where you take an opposing position to your previous position. It is especially helpful when the market moves against you. So, your gain on one position can make up for your loss on the other position.
- Trend trading: Trend trading is simply taking a position according to the current market trend; bullish or bearish.
- HODL bitcoin: This strategy is a long-term investment option. It means buying and holding bitcoin and then selling later when the price goes up.
Choose Your Means of Market Exposure
You can get exposure to bitcoin through any of these ways:
- Buying bitcoin through an exchange: This is one of the easiest and safest ways to buy crypto. Binance, Coinbase & Huobi are my top picks when it comes to exchanges. Here, you buy and own bitcoin through an exchange because you are optimistic about a rise in its price. One of the setbacks of this strategy is that there is no adequate regulation and management of most bitcoin exchanges. Also, you have to pay a fee for the exchange, even though there are restrictions on the activities you can perform with the account. Lastly, the servers and matching engines can be unreliable, which can alter accuracy. Therefore trade and invest with caution.
- Trading bitcoin derivatives: Rather than own a bitcoin, you will speculate its price with CDFs. You will either “go long” (for price rise) or “go short” (for price fall). Trading bitcoin derivatives comes with some huge benefits, one of which is deep Liquidity. This is a result of the mass of people involved. You can sell orders at your price. Also, it hedges your bitcoin and mitigates the risk that results when the market dwindles. Finally, with just a deposit (margin), you can access full market exposure. Despite all these benefits, you must understand that this method involves huge risks.
- Crypto 10 index: Crypto 10 Index gives you exposure to 10 major cryptocurrencies in one single trade. The index monitors these cryptocurrencies and speculates on them.
Set Your Stops and Limits
Stops and limits are crucial risk management tools you need to master as a trader. You should know when to stop or limit your position. You can use:
- Guaranteed Stops: As the name implies, they will close your position whether there is a spillage or not, depending on the level you set.
- Trailing Stops: These stops work hand in hand with favorable market conditions. They are less risky and have more potential for profit. However, they are prone to spillage.
- Normal Stops: Depending on the level you set them, they close out your stops. Here, spillage is likely to occur with a sudden price fluctuation.
Open your Trade
Opening a trade simply implies that you start transactions (buying and selling). You would buy if you foresee a price increase and sell if you foresee a price drop. And of course, you have to monitor the market to know when it is a good time to buy or sell depending on the current market movement.
Close Your Position
This option is applicable when you want to take your profit or prevent a loss.
#3. HODL Bitcoin
HODL is a term common in the investment world, especially in the crypto community. It was coined from a misspelling of the word “hold”.
HODL is a long-term investment approach that subscribes to GameKyuubi’s line of thought. GameKyuubi thinks that novice traders are likely to make less profit or lose out entirely. This is because they sell their coins because of speculations when they can hold onto it and make more.
Hodlers take their eyes off volatility and predictions and simply buy and hold their coins. They do this expecting that the price of the coin will rise in the nearest future, and then they can sell and make a substantial profit. This helps them take a neutral stance between FOMO (fear of missing out) and FUD (fear, uncertainty, and doubt).
FOMO can lead an investor to buy coins at a high price because he (she) believes that the price will further rise. On the other hand, FUD leads to selling low because the investor believes there will be a dip, and has to sell off to recover capital.
If you are a hodler, you might not have to bother so much about momentary market movements. You just make your research to find coins with high return prospects in the long run.
Then, you buy these coins and wait till there is a significant rise in price before you resell them. So, hodling is not for you if you cannot be patient and cannot spare the money for a long time.
To start earning through Bitcoin hodling does not involve any complicated steps. All you need to do can be summarized in 3 simple steps.
- Get a Bitcoin wallet.
- Buy BTC, then wait and hope that the price of the Bitcoin spikes in the future.
- Sell your BTC when the price rises.
#4. Become A Bitcoin Affiliate
If you are a social media influencer or own a website, you may find this option easier. You can make a fortune when you partner with bitcoin or any other cryptocurrency company as an affiliate.
All you have to do is promote their services on your social media platforms to increase their visits. If any visitor registers with the company as a result of your advertisement, you earn “a commission”.
When you sign up with the Bitcoin company as an affiliate, the company gives you a special affiliate link. You have to share the link on your social media handles, and if the company makes a sale through your link, they pay you.
You can also leverage your large social network to get other social media influencers to share your link. You can also create content on how to make money with bitcoin (add your link), and post them on blogs. That way you can increase your customer base and chances of sales.
In conclusion, how much you can make as a Bitcoin affiliate is directly proportional to the number of customers you can convert. So you will need a large bank of followers to make the most of this means of making money with Bitcoin.
Another thing you must consider is the company to partner with. You must ensure that you sign up with a credible company with a reliable affiliate program.
#5. Lend Bitcoin
Lending Bitcoin does not just let you earn money, let’s put it this way; your bitcoin earns you money.
Bitcoin is a decentralized coin. It does not need the approval of authorities to be valid, and this makes it a handy option for transactions.
You can decide to loan BTC to other people at an interest rate. The best part is that you are still holding the bitcoin, but instead of letting it be dormant, you give it out to loanees and attach an interest rate. This is indeed a smart way of using bitcoin to create wealth.
Also, it has become much easier to loan your Bitcoin. Platforms like BTCpop, Unchained Capital, Bitbond, and some other websites can help you with your lending services. These platforms pay up to 15% interest and are trusted (a vital factor to consider in lending your Bitcoin)
#6. Accept Bitcoin Payment
Bitcoin is increasingly becoming a medium of exchange. More businesses are beginning to accept it as payment for their goods and services. So if you are a business person, you can as well consider integrating Bitcoin into your payment system.
It will give your business a global visage, make payments secure, and speed up the entire payment process. The good news is, it is super easy to begin. All you need is a bitcoin wallet and you can easily create one if you don’t have one already.
If you own a physical business and want to introduce this system, you can put up a notice at your storefront or your cash register. For an online business, a banner on your home page can serve. You can also inform your customers via email or your regular newsletter.
You can also use the services of third parties like Paxful to integrate it into your website. This will enable customers to send funds directly to your Bitcoin wallet.
Once you have gathered a sufficient amount of BTC, you can use them for investment. However, one thing you must do is to be abreast with the bitcoin volatility and set your price accordingly. This will reduce the possibility of incurring losses instead of profit.
#7. Micro Earnings
Of course, the word “micro” implies that the returns come in bits, but micro earning is certainly a credible source of income using bitcoin. If you want to make some easy money without expending energy, micro earnings is a recommended way.
Some websites pay you in Bitcoins when you complete some assigned tasks and fill online surveys. Bitcoin get is among the prominent micro-jobs websites. Companies such as adBTC, Coinpayu, Coinadder, and BTC4ADS are other examples.
Though this pay is not high, they can help you with meeting daily expenditures. If you decide to save them, they can culminate into a substantial amount with time.
Micro earnings sites pay you very little amounts of Bitcoins called “Satoshis”. One Satoshi is equal to 100 millionth of a Bitcoin. So if you can commit more time to these jobs, you can earn around 0.04 USD to 0.05 USD.
Helpful Tips for Investing in Bitcoin
Do an Extensive Research – This is a crucial requirement for bitcoin investors. The bitcoin market is known for fluctuations, price volatility, and therefore uncertainties. Therefore, it is best to conduct extensive research to get every bit of information about bitcoin and how the market operates.
Learn How to Analyse the Market – You should consider learning how to analyse the market by enrolling in a cryptocurrency trading course. Discover all the important technical indicators that you need to know to help reduce as much risk as possible while increasing the probability of making a profit.
Consider all Risks – Foresee all your risks and carefully make a decision on which method will suit you best. You must also understand that you cannot make profit all the time. The market might go against you sometimes, but that’s also part of the game.
Seek Expert Advice – This is very important. Experts in this field stand a better chance of making less-risk decisions, as a result of experience and professionalism.
Diversify Your Investments – As an investor, it might be very risky to put all your eggs in one basket. Do not throw all your money into bitcoin. You can look out for other more reliable investment options.
Final Thoughts
Bitcoin is widely considered by many people to be the future of digital finance. Currently, the value is very high and is speculated to increase even more. Hence, it has a good potential for profitable investment, and these 7 ways can help maximize this potential.
