5 ways how to earn money from cryptocurrency

When people hear something about the cryptocurrency market, most of them immediately remember Bitcoin. Although Bitcoin remains the leading cryptocurrency, there are also thousands of altcoins on the crypto market, offering numerous options to take advantage of Web3 technologies. The same situation with crypto investments. Some crypto newcomers think that cryptocurrencies are suitable only for benefitting from price fluctuations. But in reality, the crypto market provides users access to many potential earning opportunities.

Let’s take a look at how to earn money from cryptocurrency using methods that may fit both beginners and established crypto enthusiasts.

Investing

Investing can be an easy way to earn cryptocurrency which many crypto newcomers begin with, because it simply involves purchasing digital assets and holding them for some time. Such an approach is also known as a buy-and-hodl strategy. The cryptocurrency market is known for its volatility, but those who stick to this strategy pay less attention to price fluctuations and are more focused on potential long-term benefits. Once an asset’s price reaches a certain level, investors may sell it. Every investor sets their own exit level, and it may take months, or even years, to reach it.

The investing strategy requires you to identify assets with high long-term potential. Before buying an asset, it can be useful to do your own research and assess the project’s prospects, given current market conditions. Alternatively, investors may form a crypto portfolio that consists of different assets, diversifying potential risks and returns.

Trading

While investing is a long-term endeavor, trading is meant to take advantage of any short-term price opportunities. Traders also buy an asset and sell it when it reaches a certain level, but these events may happen several times a day, or even a minute. Traders try to benefit from price volatility and usually follow a certain strategy to spot potential entry and exit points. Active trading usually requires monitoring the crypto markets and analyzing the current market situation.

When trading, you can either take long or short positions, depending on whether you expect the asset price to rise or drop. This means trading could allow one to benefit from the price fluctuations, regardless of their direction.

As a part of trading opportunities, traders may also take advantage of arbitrage. It implies buying an asset on one platform and selling it on another one. Traders involved in crypto arbitrage search for significant price imbalances on different platforms, and can benefit from price differences. Crypto arbitrage may require high-speed transactions since the price may quickly stabilize. Because of that, some arbitrage traders use specific software and connect it with trading platforms using API.

Staking

Staking is one of the most popular ways of potentially earning passive cryptocurrency income. It empowers users to put their crypto funds to work and contribute to blockchain networks, taking part in transaction validation and governance. Staking is supported only for cryptocurrencies that use proof of stake (PoS) or similar consensus mechanisms to maintain network security and operation.

There are many ways of staking cryptocurrencies, and the experience may differ depending on what you choose. But in general, you need to hold a certain number of coins to be eligible for staking rewards paid in cryptocurrency. Some users prefer using crypto exchanges for staking and earning staking rewards, just by holding coins on their balances. Those who have more experience and want to be more involved in the staking process may choose token delegation to manage funds between different validators.

If the asset price goes up while you stake your cryptocurrency, you could benefit from both price movement and staking rewards. During bear markets, staking can be used for accumulation and as a way to compensate for potential price losses.

Lending

Crypto enthusiasts like to say that one can become their own bank with crypto. And that’s true because the crypto market empowers users to lend coins to other users, and earn an interest income from borrowers in return, just like banks. To participate in crypto lending, you can join specific platforms or use crypto exchanges that can offer lending services by opening savings accounts.

Crypto savings accounts are similar to savings accounts in traditional finance. You earn interest income over time and your potential rewards depend on an asset, savings period, and savings account flexibility. If users can withdraw money from savings accounts anytime, lending providers may offer lesser rewards than in savings accounts where crypto is locked until payment day.

Crypto social media

Being active in crypto social media offers another one of the potential best ways to earn free crypto. Crypto networks and platforms sometimes run specific offers for their communities with random or guaranteed prizes for taking certain actions. Alternatively, you can join an affiliate program, share your referral link, and earn additional income by inviting new users to the platform.

Where to start?

Both newcomers and experienced users sometimes focus only on one theoretical way of earning cryptocurrency income, while losing sight of others. However, you can use a platform such as CEX.IO that provides access to numerous crypto services, allowing you to take advantage of them all, or choose a combination that fits your needs.

CEX.IO is a reputable and reliable crypto exchange with an over eight-year history that provides its services in over 99% of countries and has over 5 million users worldwide. CEX.IO is known for its high security and advanced techniques of keeping users’ funds safe, meaning it can be used to store cryptocurrencies for long-term investments.

With CEX.IO, you can get access to 200+ crypto-to-crypto and crypto-to-fiat markets, exchanging major cryptocurrencies, security tokens, DeFi tokens, stablecoins, and taking advantage of price fluctuations. Moreover, CEX.IO offers free crypto API trading solutions, empowering traders to automate their trades, receive a plethora of information about crypto markets, and improve their arbitrage operations.

In addition, CEX.IO users can stake crypto and open savings accounts. CEX.IO Staking lets users earn staking rewards with up to 23% annual yield by simply holding assets on the balance. No additional actions are needed! While coins participate in staking with CEX.IO, they are not locked, meaning you are free to withdraw and trade them anytime.

CEX.IO gives users access to numerous stake-able assets such as Cardano (ADA), Polkadot (DOT), and Avalanche (AVAX). Staking rewards are sent once a month but users are eligible to receive staking rewards even if they hold crypto only for an hour. Similar to staking, the CEX.IO Savings service only requires users to transfer funds to a savings account, empowering users to generate interest income every day and withdraw it anytime.

Active traders and crypto enthusiasts who are active in social media may also earn rewards by connecting their friends to CEX.IO, or inviting other traders with referral links. Any CEX.IO user can become an affiliate and earn 30% from all exchange transactions made by referrals. There is no cap on the amount you can earn with the CEX.IO Affiliate program and the number of referrals you can invite. Once you decide to withdraw fiat funds, you can use multiple payment methods available on CEX.IO, including debit/credit cards, bank transfers, and online wallets.

Keep in mind that there is no best way to benefit from cryptocurrency. Every crypto enthusiast can find their own potential path to earning money from cryptocurrency by combining different services and earnings opportunities. Regardless of the route you choose, the CEX.IO ecosystem helps you explore the cryptocurrency marketplace and expand your crypto experience.

Editorial Note: This is a sponsored article. Opinions expressed are solely those of the sponsor and readers should conduct their own due diligence before taking any action based on information presented in this article.