Many people come into crypto thinking they can make a lot of money or even get rich in a short time.
If you’re one of them, I’m here to assure you that you can. You can make a lot of money with cryptocurrency, but I can’t say it’ll be so easy or quick.
And, it depends on the amount of money you already have to invest or how much effort and time you’re willing to put into it.
In this post, I will be sharing with you the various ways you can make money with cryptocurrency and how to maximise your earnings from them.
12 ways to make money with cryptocurrency
- Buy, and HODL tokens with a sustainable business model and utility
- Trade tokens with good price action
- Lend your crypto assets to earn interest
- Stake your tokens to earn rewards.
- Provide liquidity to earn rewards
- Stake your liquidity provider (LP) tokens to earn even more rewards
- Participate in crypto airdrops and giveaways
- Mine your favourite cryptocurrency mining
- Participate in crypto contests
- Promote your favourite crypto projects to earn referral commissions
- Get a job or become a freelancer
- Start a crypto business
Please know that there’s no absolutely free launch anywhere.
All the ways to make money with cryptocurrency discussed in this article require you to invest either money, effort, or time.
So, with that out of the way, let’s get into it.
1. HODLing (buy and hold)
The most popular and safest way to make money in crypto is to buy and hold tokens with a sustainable business model or utility.
It’s a long-term crypto investment strategy that requires you to leave the token in your wallet for years, waiting for the price to go up before you sell.
How long you have to HODL depends entirely on you and the profit target you hope to reach before selling.
Ever heard of “diamond hands”?
They’re referring to the HODL strategy and your ability to hold through both the bear and bull markets until you become rich or at least, reach your profit target.
How does HODLing a cryptocurrency make you money?
The dollar value of the coin can increase beyond your purchase price and you make a profit.
For example, 1 CST in your wallet will remain 1 CST but the dollar value can increase (or decrease).
However, HODLing some kind of tokens can earn you more of the same or other tokens for free.
- When there’s a hard fork of the coin you’re holding, you may receive an airdrop of the new coin.
- Holding reflection tokens or dividend-paying tokens can earn you more of the same or a different token as a reward.
- Lastly, if you hold the native token of some launchpads or blockchain networks (e.g ATOM) you may get random airdrops of new project tokens launching on the platform.
As you can see, it’s also possible to grow your portfolio and acquire new tokens for free by holding the right coins in your wallet.
What are the risks of HODLing?
Buying and holding is the safest crypto investment strategy, but it also has risks.
- There’s no guarantee that you’re going to make money by HODLing, because the price of the asset may never reach your profit target. It’s even possible the price permanently falls below what you bought and you lose money.
- The project may fail, and you’ll lose all or a portion of your money. Remember, not every coin will survive a few months or years after you bought them.
- Also, the project can be hacked, exploited, or the team pulls the rug on investors one way or another. As a result, you may be left holding a useless or worthless coin.
HODLing is the most conservative or safest way to make money in crypto because, given enough time, the price of the most popular or useful cryptocurrencies tends to go up.
By having a diamond hand, and resisting the urge to sell during price downturns or too early during a bull run, one could make a significant profit in the future if you HODL the right coins.
2. Crypto trading
Trading is the fastest and riskiest way to make money in crypto. It refers to the act of buying and selling or swapping cryptocurrencies for one another.
The idea is to buy a coin when the price is low and sell it when the price is higher.
Buy low, sell high. Simple, right?
It’s not. Because the cryptocurrency market is so volatile, unpredictable, and heavily manipulated due to its unregulated nature.
Also, it’s a zero-sum game.
For you to win, someone else has to lose and there are professional players with all the knowledge, skills, resources or tools to beat you at it.
You stand no chance against them, except you’re a professional trader yourself who knows what they’re doing and have the resources to play the game well.
Furthermore, crypto trading can be so stressful and dangerous to your mental and physical health as it demands constant attention in monitoring and analysing the charts.
But, if you must trade, I have prepared this degen trading strategy that anyone can use and make money with crypto trading.
And it doesn’t require you to constantly monitor the charts or do any technical analysis.
3. Crypto lending
You can lend your crypto assets on crypto lending platforms to earn interest, which is usually paid in the same or a different coin.
This works just like your regular savings account with a traditional bank where you deposit your money, the bank uses it to do business (including lending it to others) and pays you interest.
There are centralised and decentralised crypto lending platforms you can lend your coins on and earn decent interest while also waiting for the price of the coins to increase.
Whether you decide to use a centralized or decentralized crypto lending platform depends on your risk and privacy preferences.
However, both work great, but centralized platforms seem to offer better interest rates but also greater risk.
Staking is the act of locking up your tokens to earn rewards.
Some blockchain networks require users to stake their native coin to secure the network or participate in governance and earn rewards.
Similarly, certain crypto projects use staking to distribute their token to their most loyal users.
They require you to stake your token on their platform to earn more of the same or a different token as a reward.
For example, you can stake BSW on Biswap to earn more BSW and other tokens. Plus you enjoy other exclusive privileges.
Once they have fully distributed the tokens, other staking options may be released or the staking program ends accordingly.
Staking is a great way to put your coins to work and earn passive income in crypto.
It’s used by projects to:
- Attract new users or investors to the platform.
- Reward long-term investors for their trust and commitment to the project.
- Reduce circulating supply and make the token scarcer in the short term, which can help grow or maintain its value.
In the early days of a project, they usually offer higher than normal APR to attract users to the platform.
As a smart investor, you need to do your own research, identify the projects with a sustainable business model (not just high APR), and then buy and stake their token to grow your stack.
Mindlessly chasing every high APR staking opportunity you see will get you roasted in crypto.
For a comprehensive list of the top staking coins or platforms across all chains, click here.
5. Liquidity mining
Liquidity mining is when you deposit your crypto assets in a liquidity pool on a DeFi protocol to facilitate and earn a share of all trading fees generated from the pool.
In addition to the trading fees collected and distributed among the liquidity providers, the platform may also reward you with their native token.
New projects usually distribute their tokens to liquidity providers for free as an incentive for you to provide liquidity on the platform.
What are the risks to liquidity mining?
- There’s the risk of impermanent loss, where the dollar value of the assets you added to the liquidity pool may be less than what it would have been if you had just held the tokens in your wallet.
- The respective tokens you added to the liquidity pool may lose significant value due to hacks, exploits, rug pull, etc.
- The liquidity protocol or platform can be hacked or exploited and the funds drained. It could even be a scam platform.
As such make sure the platform you’re providing liquidity to is secure and reliable.
Secondly, only provide liquidity for tokens that have a sustainable project behind them and you’re willing to HODL for the long term.
And remember, if it’s too good to be true, you’re either ignorant or it’s not true.
6. Yield farming
Yield farming is an extension of liquidity mining. It requires you to stake your liquidity provider (LP) tokens to earn even more rewards.
Your LP token is like a receipt indicating how much you have in a particular liquidity pool.
Several DeFi platforms operate “farms” where you can deposit your LP token and earn their native or any other supported asset in addition to your liquidity mining rewards.
With yield farming, you’re earning from almost 3 different sources with a single investment.
- from the (potential) price appreciation of your crypto assets.
- a share of all fees generated in the liquidity pool.
- more of the same or other tokens in the farms which could also appreciate in value.
Some farms allow manual or auto-compounding to help you grow your wealth even faster.
So, to maximise your earnings, add your crypto assets into liquidity pools that allow you to stake your LP token to farm other tokens.
And if they offer auto-compounding, that’s even better.
7. Crypto airdrops and giveaways
Crypto airdrops and giveaways are the most popular ways to make money in crypto without investing cash.
It’s a way that especially new crypto projects use to attract new users and investors by rewarding them for performing simple tasks.
They could ask you to interact with a social media post, join their communities, and do other simple tasks in order to be eligible for their airdrops or giveaways.
However, some airdrops can be retroactive, rewarding users who have interacted with a platform or performed specific tasks in the past.
For example, the Uniswap (UNI), Optimism (OP), Ethereum Naming Service (ENS), and Ampleforth (FORTH) airdrops were all retroactively distributed.
So, whereas some airdrops require you to follow certain specific instructions to be eligible, you’ll have to be lucky to qualify for others.
You just have to keep your eyes and ears open to catch as many of these crypto airdrops as you can.
Beware of fake airdrops
Be aware that some new airdrops and giveaways are garbage or outright scams.
They will make you do spammy tasks and never distribute, or at best, give you worthless tokens.
Some of them may even ask you to send some money or buy their token to get the airdrop.
Others just use the airdrop campaign to mine email addresses, which they will sell to the highest bidders.
As such, you need to evaluate every airdrop and be sure it’s worth it before jumping aboard.
8. Crypto mining
Similar to staking cryptocurrency mining is a way to secure a blockchain network and validate transactions to earn rewards.
However, unlike staking, mining does not require buying and staking a token.
Rather, you mine with special machines or computers designed to solve very complex mathematical problems.
Cryptocurrency miners are rewarded with the new coins they’re able to create by solving these complex mathematical puzzles.
Mining is no longer as popular or profitable as it used to be when crypto was still very niche, especially among retail investors.
Now, it takes a lot of money to invest in and be profitable with crypto mining. So, it’s not a simple or easy way to make money with cryptocurrency anymore.
Only technically competent and well-funded individuals or companies can make meaningful money from crypto mining now.
9. Crypto contests
Every now and then you’ll see a crypto writing, meme, video, or other contests that you can participate in to win crypto prizes.
Similar to airdrops and giveaways, crypto contests are a way to make money in crypto without investing any cash.
All you need is the skill and experience required to compete in the contest and win some crypto.
I have participated in several contests, especially on Publish0x and earned some reasonable amounts from them.
So, keep your eyes and ears on the various crypto social media platforms for news of the latest contests you can participate in.
10. Referral and affiliate programs
Depending on the size of your audience and influence, you can make a lot of money in crypto by promoting your favourite platforms.
If you know about or have used some really great platforms that are relevant and useful to your audience, tell them about them and include your affiliate links.
When they decide to visit and use the platform through your link, you earn a referral commission paid by the project from their revenue.
This way, you create a win win win scenario where your audience gets useful information, the project gains new users, and you earn some crypto.
This blog for example depends heavily on affiliate commissions to earn revenue, and we push only the best projects.
All you need to get started with affiliate marketing:
- Register on the platform you want to promote and generate your affiliate link.
- Promote the platform via articles, videos, podcasts, etc, and include your affiliate link in them.
- Earn a commission for every sale the project sale generated through your affiliate link.
Your referrals or friends don’t have to pay anything extra for you to earn a commission.
In fact, in some cases, they will get a sizeable discount for using your referral link.
Most crypto projects will pay your referral rewards in their native token or the same token your referrals spend on the platform.
Either way, you’re earning some crypto that you didn’t have to buy with cash.
11. Get a job or become a freelancer
Get a job at a crypto company that pays you in cryptocurrency or request your current employer to pay all or part of your salary in crypto.
If you can’t get a salary-paying job, become a freelancer and get paid in crypto for your services.
Regardless of what your profession is, you can become a freelancer, and get paid in crypto for your services.
For a list of freelancing platforms that pay in crypto, click here.
12. Start a crypto business
Become a cryptocurrency entrepreneur by starting your own crypto company or project where you get paid by clients in crypto.
There’re several cryptocurrency business ideas you can explore.
For example, you can
- Become a local crypto merchant or dealer who buys and sells crypto from and to others.
- Build your own centralised or decentralised cryptocurrency exchange, if you have the money to hire developers or you have the skill.
- Start a crypto marketing agency where you help different projects with branding, marketing, etc.
- Buy and install Bitcoin Automated Teller Machines (BATM) Create your own token and publicity where people can buy and withdraw their crypto with fiat and you earn from the usage fees.
There’re so many businesses you can start and make money with cryptocurrency if you think about it.
Better still, you can start accepting crypto in your existing local or online store and make money with crypto with that.
But note that, you’ll be exposing yourself to the wild fluctuations of the crypto market, which can work for or against you.
What are the risks of trying to make money with cryptocurrency
Everything comes with a risk, and the above ways of making money with cryptocurrency are no exceptions.
Below are the risks associated with making money in crypto.
- The price of the tokens you invest in can go to zero or dump below your purchase price and never recover. And even your rewards from staking, liquidity mining or yield farming may not be enough to cover the loss from their dump. That’s why mindlessly chasing high APY alone is futile.
- The protocol or platform you interact with or deposited your crypto assets in can be hacked and you lose your money with little to no hope of being reimbursed.
- The project developers or team can disappear with your deposited funds one way or another.
- The project could fail like every other business. After all, not every project or company will survive and thrive.
You can quickly lose everything or a significant value of your investment due to these risks and you should take note of them, and invest accordingly.
In this article, we’ve discussed the top 12 solid and legit ways to make money with cryptocurrency and their associated risks.
You can choose to focus on one or more of these ways to make money in crypto and leverage them to grow your portfolio accordingly.
Which of these ways of making money with cryptocurrency do you like or use the most? Join the discussion in our Telegram community.