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How To Make Money With Cryptocurrency - A Definitive Guide

Last Updated November 9th 2020

Make money with cryptocurrency

From zero to the best investment of the decade. Cryptocurrencies were born during a difficult financial period, and very quickly, they became the most profitable investment having the most massive increase of the decade compared to rivals.

In this article, you will have the opportunity to see cryptocurrencies in retrospective, an outlook of the crypto market right now and the 5 best strategies to make money investing in cryptocurrencies.

Cryptocurrency Retrospective

The first cryptocurrency was Bitcoin which was launched in 2009 by Satoshi Nakamoto, for whom it is not yet known whether it is an individual or a group of people who came up with this idea. In their early years, cryptocurrencies did not have any substantial value, but gradually they started to grow. They also faced great scepticism and criticism in their early days and were often identified by various individuals as hotbeds of criminal activity.

However, after many tides, hacking cases like Mt. Gox exchange and many other challenges, cryptocurrencies rose and became an example of how to earn by investing in them.

bitcoin market cap

All-time Bitcoin price chart. Source: Coinmarketcap

Cryptocurrencies peaked in 2017 when Bitcoin reached its all-time high of $20,000. Throughout their history of existence, many individuals have become wealthy by investing in cryptocurrencies.

The Winklevoss twins, for example, have made staggering amounts of money investing in cryptocurrencies. In April 2013 the price of Bitcoin was $129 and the Winklevoss twins at the time had invested $11 million. They decided to hold their investment, and its value went to more than $1 billion in 2017 when Bitcoin exceeded the price of $ 11,700. Furthermore, the Winklevoss twins decided to invest their money to create what is now known as the Gemini exchange.

This is just one of many other examples, where investors have earned large sums of money thanks to investments in cryptocurrencies. 

Many other individuals have made enormous amounts of money investing in cryptocurrencies. Another example is Roger Ver, who reportedly earned a total of $520 million by investing in crypto startups.

Barry Silbert also invested $ 16.8 million when the price of Bitcoin was $350 and now owns a full $268.8 million from that investment.

Tim Draper too in 2014 bought 30,000 bitcoins. At the time, Bitcoin cost $413. Now the value of these bitcoins is $215 million. Although there was a lot of scepticism at the time, Draper did not withdraw his investments but continued to HODL them, believing that one day Bitcoin would reach the price of $10,000. And Draper turned out to be right.

We could go on with examples of investors who have made fortunes investing in cryptocurrencies but if you want to find out more about who are the people who became millionaires from investing in Bitcoin check out this article.

Read More: Top 9 Bitcoin Investors - Bitcoin Millionaires Investors

Ready to dive into crypto market?

Crypto Outlook: Can You Make Money With Cryptocurrency?

Yes you can make moeny from cryptocurrency! Although so far as we saw above, investors have earned immense amounts of money, cryptocurrencies continue to be considered as investments with high-profit potential, therefore involve a high degree of risk.

Throughout their existence, they have outgrown all rivals. Investors who have invested in cryptocurrencies have earned significantly more than investors who have invested in stocks, bonds, or gold.

Cryptocurrencies are reported to have grown by 9,000,000% over the past decade and have been selected as the best investment of the decade. The best year so far for cryptocurrencies was 2017 when Bitcoin reached its all-time high of $20,089.

Until 2017, large companies were reluctant to invest in Bitcoin or launch cryptocurrency services. But that changed when in the same year CBOE Global Markets launched the Bitcoin futures trading platform.

Moreover, there are currently 7592 cryptocurrencies now, and the total crypto market cap is $404,955,125,177.

Cryptocurrencies are volatile, thus offering many profit opportunities. 2020 has been an impressive year for cryptocurrencies. They experienced a slump due to the COVID-19 pandemic to rise afterwards, and now Bitcoin stands at around $15,000.

This year, big companies have decided to dive in the world of cryptocurrencies. Microstrategy and Grayscale invested millions of dollars in cryptocurrencies. But the biggest news was Paypal starting to offer crypto services. 

After all, the involvement of Paypal gave the seal to the fact that cryptocurrencies are growing and becoming more and more part of the world financial system and that they are the future of money.

Just as those who did not invest 10 or 5 years ago now regret it, it seems that those who do not invest today will regret it in the next 5 or 10 years. If this trend continues, cryptocurrencies will definitely increase their value and will really be accepted by everyone as a store of value. 

So, by looking at the way things developed for cryptocurrencies and the way things are going, we can conclude that there are tremendous opportunities to make money by investing in the crypto market.

For more Crypto price predictions:

Bitcoin Price Prediction Forecast

Ethereum Price Prediction Forecast

Ripple Price Prediction Forecast

Bitcoin Cash Price Prediction Forecast

Litecoin Price Prediction Forecast

TRON Price Prediction Forecast

How To Make Money With Cryptocurrency: 5 Strategies To Consider

strategies  to make money with cryptocurrency trading

There are various ways to profit make money with crypto and profit from investing in the crypto market. The volatility of cryptocurrencies offers profit opportunities for both beginners and experienced traders.

Below we present five strategies to profit with cryptocurrencies.

1. Investment In Long-Term Periods

This is the most popular and acceptable strategy for everyone. At the same time, it is the easiest way for beginners, because all that is needed is to invest a certain amount of money in your favourite coin and wait for a long time for that coin to increase in value. 

The above examples showed us how investors have made big money by applying this strategy, which, in its origin, is very simple. If you have invested in Bitcoin for example during the first four years of its existence, you would now be enjoying huge profits, given that Bitcoin in the last decade has seen an increase of 9,000,000% which is mundane, when you think about it. 

This strategy continues to be a good option for profit because cryptocurrencies, according to experts, are expected to increase in value in the near future.

Have you considered investing in the crypto market?

2. Day Trading

Day trading strategy is more preferred by experts. Those who have experience with trading cryptocurrencies and who have mastered the craft can earn profits this way.

You need to know how to read charts, technical analysis and understand candlestick movements well. If you want to apply this method, you must have been with cryptocurrencies for a long time because this way you will be able to predict where the market is going, and you will invest your money in the right way.

Since the price of cryptocurrencies often moves up and down during the day, traders buy low and sell high. These may not be massive earnings, but when calculated at the end of the month, they bring considerable profits.

3. Trading With Contract For Difference (CFDs)

Trading with CFDs means you have to make a contract with a broker. The term CFD stands for Contract For Difference. With the contract that a trader makes with a brokerage, it becomes possible for that trader to benefit from Bitcoin or other cryptos without having to be its owner. 

So the good thing about this method is that you will only speculate on cryptocurrency price movements and earn from the difference between their entry price and exit price levels. And since you will not own any cryptocurrency then, you do not need to worry about where you can store it or about its security. 

You can either take a long or short position, depending on whether you expect the price of an asset to increase or drop. Therefore, CFDs provide you an opportunity to profit from both ups and downs price movements in underlying crypto assets. 

Please note: CFDs are complex instruments and come with risk of losing money due to leverage.

4. Cryptocurrency Arbitrage

Different crypto exchanges have different crypto prices for a small percentage. Although at first glance it may seem impossible to apply, with a genuine focus and well-done research, you can buy cryptocurrencies in exchanges that have lower prices for them and sell them in those that have higher prices. 

To understand this better we can take an example. You can buy Bitcoin on Binance which can list Bitcoin for $8800, and you can sell it on Coinbase which may have listed Bitcoin for $9000, and, the profit will remain yours. 

One may ask whether this is legal? This is entirely legal because you are doing something that all traders do; buy and sell, only in different exchanges.

5. Mining Cryptocurrencies

The 5th option we chose is mining cryptocurrencies. To create fiat currency, it must be printed by the government. When it comes to cryptocurrencies, they are not printed because they are virtual currencies, but they get mined by crypto miners. 

Mining used to be very easy, and anyone could do it from home through their computers. Now mining is complicated, and there are crypto mining farms around the world that are very sophisticated because they require exceptional technology and spend a lot of energy. 

Otherwise, miners solve difficult math problems and then are rewarded with Bitcoin for solving those problems. You can build a mining rig in your home if you can afford the computer system required and if you can afford the electrical costs. 

In fact, the best way is to practice so-called cloud mining. Cloud mining is very easy because there is no cost with it. With cloud mining, you can lease the equipment from another provider, or you can buy shares without having to own hardware.

Learn Cryptocurrency Trading Strategies at Trading Education

All the strategies mentioned above can be learned in the courses we have prepared here at Trading Education. Our goal is to prepare you for your path to be as successful in trading as possible.

Our platform is very easy to use. You will benefit from the wider trading community at Trading Education. We do not take the teaching trading for granted, but we are dedicated, and we teach with full passion. Check out our trading courses here.

Except that we teach trading cryptocurrencies, we teach trading forex and stocks also. You can find here trading quizzes and free ebooks.

Start Your Crypto Trading Adventures With eToro

eToro is a leading global trading platform for cryptocurrencies, indexes, commodities, currencies and stocks. eToro is fully regulated by relevant institutions.

eToro was launched in 2007, and it is a trading company that puts an importance on cryptocurrency, and to date has over 12 million users worldwide. 

eToro offers numerous products. The first, eToro.com, is a trading platform for investing in cryptocurrencies. Unlike in other platforms, in eToro.com, you can follow and copy other traders. Their CryptoPortfolio is also unique, allowing you to invest in long term basis in the most popular cryptocurrencies without any fees.

In 2018, eToro came out with eToroX - A fully regulated cryptocurrency exchange which actually is their third product. eToroX allows you to access and withdraw the assets you’re trading, and it is an advanced, crypto-only exchange which is perfect for more experienced traders.

All in all, eToro is a great place where you can enjoy your trading adventures, whether you are a beginner or a seasoned trader. eToro is easy to use platform which does an excellent job allowing people to trade cryptocurrencies.

eToro – The Best Cryptocurrency Exchnage for both investors and traders

etoro broker

eToro have proven themselves trustworthy within the industry over many years – we recommend you try them out.

Key Points

If you remember anything from How To Make Money With Cryptocurrency, make it these key points.

  • Cryptocurrencies did not have value at their beginning, but gradually they started growing.
  • Cryptocurrencies peaked in 2017 when Bitcoin reached its all-time high of $20,000.
  • The Winklevoss twins, Roger Ver and Barry Silbert are three of many investors who made enormous amounts of money investing in cryptocurrencies.
  • Long-term investments in cryptocurrency overall have turned out to be profitable.
  • Day traders can earn money trading cryptocurrencies since they are volatile.
  • Trading CFDs and crypto arbitrage are two other methods to make money with cryptocurrencies.
  • Cloud mining is the easiest way to mine cryptocurrencies as it does not require specific hardware, and it is affordable.

 

Moreover, it is fascinating to note that even those who once criticized cryptocurrencies are now the most prominent investors. For example, J.P. Morgan used to criticize Bitcoin harshly, and now they have invested assets in it.

This is an indication that cryptocurrencies are experiencing special times, and their impact is growing.

We hope that this article about How To Make Money With Cryptocurrency - A Definitive Guide has been useful and motivated you to start investing in the cryptocurrency market. Always stay on top of the latest crypto market news with Trading Education to spot the best trading opportunities.

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