How To Start Your Cryptocurrency Trading In 2023 (9 Best Ways For Beginners)

By choosing any of these methods, you can consistently make money trading cryptocurrencies. 

Last Updated January 5th 2023
17 Min Read

For anyone interested in cryptocurrency trading, the goal is, in most cases, to maximize earnings. However, this is often easier said than done. 

If you are yet to find a way to make the most of cryptocurrencies, this guide takes you through the most popular ways to make money with cryptocurrencies. 

In the past, due to random pumps in the market, many people have gotten lucky and made insane wealth without much skill in crypto trading. However, as the market matures and more cryptocurrencies enter the market, you need strong analytical skills to win consistently in crypto. 

You don't have to worry, though. This guide will take you through the 9 best ways for beginners to start cryptocurrency trading in 2023. 

Can Beginners Trade Cryptocurrencies Profitably?

Anyone can make money off cryptocurrencies. However, you need to be acutely aware that it is a risky venture.

Due to the volatile nature of this market, it is easy to make a huge amount of money in a very short time. You can also lose a truckload of money in an equally short time. 

Thankfully, this article considers all this. After reading through it, you will be aware of the different ways a beginner can make money from cryptocurrencies and choose the method that best suits your needs. 

9 Best Ways For Beginners To Make Money From Cryptocurrencies

While there are dozens of ways to make money in the cryptocurrency market, not all of them are good for beginners. This article looks at some of the best ways that a beginner can make money from cryptocurrencies safely. 

  1. You Can Opt To Trade CFDs
  2. Start Mining Cryptocurrencies
  3. Buy And HODL
  4. Become A Day Trader
  5. Become An Arbitrage Trader
  6. Try Cryptocurrency Faucets
  7. Invest In ICOs
  8. Try Crypto Gaming
  9. Become A Blockchain Developer

 

1. You Can Opt To Trade CFDs

If you are an experienced trader, one of the best ways to trade cryptocurrency is to go for CFDs.

A CFD, short for Contract of Difference, is a popular way to trade cryptocurrencies without actually owning them. An investor signs up with the broker, who agrees that they will pay you if and when certain conditions are met. These conditions include closing out your position at least halfway through each trading day (or whatever time frame is agreed upon) as well as following all other rules outlined in their regulations regarding how this type of contract works.

Multiple advantages come with trading CFDs. The biggest one is that you can make big profits from a very small investment. For instance, you can choose a lot size as low as 0.1 BTC, then borrow multiple times the amount invested to help magnify gains. This means if the market moves in your favour, you can make more than you would from owning actual Bitcoin. 

Another advantage of trading CFDs is that you can make money regardless of the market direction. Unlike owning a cryptocurrency directly, with a CFD, you can buy (go long) when you expect the market to go up. Conversely, if you expect the market to go down, you can make money by going short (betting against the market). This flexibility guarantees a cryptocurrency CFD trader profitability regardless of the market conditions. 

CFDs also come with an element of flexibility, in that you can enter and exit the market at any time you want. For instance, since Bitcoin is a 24-hour market, you can trade Bitcoin CFDs at any time, 24/7.

You will also love CFDs for the simple fact that you can hedge physical portfolios in uncertain times. For instance, if you own physical Bitcoin but believe a correction is imminent, you can retain your BTC but take a short position on Bitcoin CFDs. This ensures that you don't incur any losses even when the market corrects since you will still be making money. 

eToro is a regulated cryptocurrency, stocks, and forex broker that serves more than 13 million customers globally. It has CFDs for multiple instruments, including cryptocurrencies like Bitcoin

With eToro, you can go long (BUY) or short (SELL) Bitcoin, among other cryptocurrencies. 

Pros

✅ You can magnify profits out of a small investment

✅ You can hedge your cryptocurrency portfolio

✅ You can trade at any time 24/7

Cons

 You can easily lose all your money if the market goes against you.

 Doesn't favor long-term investing. 

Looking to trade Bitcoin or other cryptocurrency CFDs? Open an account with eToro today and get started. 

Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.

2. Start Mining Cryptocurrencies

Cryptocurrency mining is a complex process. It involves using computers to solve complex math problems to validate blockchain transactions in exchange for new units of the cryptocurrency in question. 

Mining is not easy and takes a sizeable investment in both time and money. For instance, Bitcoin mining is a highly specialized industry that is unsuitable for an individual investor. That is because you will compete with big corporations that have the resources to invest in the latest mining technology and do so at scale. However, if you really want to mine Bitcoin, you can always join a Bitcoin mining pool and get a share of the rewards a pool earns off its mining activities. 

That said, mining is still less risky and a better way to make money off cryptocurrencies long term than CFD trading. That's because the rewards you earn are yours, and even if the market dips in the short term, you still get to keep your mined crypto. Besides, there are many other cryptos that you can mine with an ordinary laptop, which keeps the costs low. 

You can also opt for Proof-of-Stake mining, which entails running a node by holding crypto. In return, you get rewarded with new units of that cryptocurrency for helping keep the network secure. 

For instance, since Ethereum started its shift to Proof-of-Stake in 2020, you can now earn Ethereum by staking a minimum of 32 Ethereum. It's a good way to earn a passive income by doing very little. 

Pros:

✅ The potential beats CFD trading when adjusted for risk

Cons:

 It takes a significant investment to get started.

 It is a little too complex for new investors. 

3. Buy And HODL

This is probably the best strategy for anyone who wants to reap big from cryptocurrencies. It entails buying a cryptocurrency and holding it long-term, the short-term dips in value notwithstanding.

To understand long-term investing, you just need to look at the price of Bitcoin since it launched. Bitcoin was trading at pennies back in 2009. Since then, it has gone through multiple crashes, many of which have seen it lose more than 70% of its value. However, anyone who held onto Bitcoin over the years has become wealthy since its long-term trajectory is overall up.

Essentially, long-term investing is all about patience. You have to be willing and able to wait for your investments, even if that means missing out on some short-term gains to ensure long-term success. The premise of this strategy involves researching which cryptocurrencies will become more popular over time so you can buy them cheap when they're less costly than other coins/tokens available today. 

That said, long-term investing is not risk-free either. Many cryptocurrencies have stagnated in value over the years. This usually happens to cryptocurrencies with weak fundamentals, and as people become more aware of their weaknesses, volumes dry up.

It is always advisable to pick safe and highly liquid currencies such as Bitcoin and Ethereum when you want to HODL long-term. These are cryptocurrencies whose fundamentals are so strong that you have a high chance of value appreciation in the long run.  

For instance, anyone who bought Bitcoin in the 2010s when it was still under $1000 is in massive profit now that it is trading at $42,000. 

Pros:

✅ It is so easy that anyone can do it. 

✅ The risk of loss is low.

Cons: 

 It calls for a lot of patience. 

 You miss out on many short-term opportunities. 

Check Out: Top 10 Growth Cryptocurrencies To Buy And Hold

4. Become A Day Trader 

Day trading is a strategy employed by those who wish to make money fast off cryptocurrencies. Day traders are always on the lookout for opportunities to make money. They do this by trading cryptocurrencies within a single day and can close out all their positions before the day ends. The idea behind day-trading is simple; you buy low and sell high using any information available throughout each trading session. 

Unlike other financial assets, day trading cryptocurrencies can be profitable. That's because the high volatility of Bitcoin and other cryptocurrencies makes the crypto market a roller coaster. For those who have the right information at their disposal, this means many profitable opportunities all through the day. 

When day trading, you do not aim to make a huge profit at once. Instead, you make tiny profits all through the day. The profit can be quite substantial when you add them together at the end of the day.

For you to become a profitable day trader, you need a lot more than just market information. You also need to master the application of different trading tools, chart patterns, and overall market behaviour. Mastering a balance between risk and returns will also go a long way in determining how profitable your day trading activities are long term. This takes time, patience, and a lot of practice.

The good news is that most trading accounts have demo accounts for beginner day traders. For instance, when using an eToro demo account, you get up to $100,000 that you can use to perfect your skills. Once you feel ready, you can move on to a real trading account and day trade your way to profitability. 

Pros:

✅ The costs of day trading are low since you can trade with pretty much any amount. 

✅ You have the potential for limitless profitability.

Cons:

 It takes time to learn the skills for successful day trading.

 Day trading can be tiring. 

 There is always a risk of the market going against you even for the best traders. 

5. Become An Arbitrage Trader

Arbitrage is the act of taking advantage when two markets have identical assets but different prices. The arbitrage trader buys an asset, sells it at a higher rate than what they paid for elsewhere, then goes out of their way to find another similar product and do exactly the same thing repeatedly. 

In the cryptocurrency market, this usually entails exploiting price differences between exchanges. For instance, if Bitcoin is trading lower by a few cents or dollars on one exchange, you can buy and sell it on an exchange where it is selling at a much higher price. 

Arbitrage opportunities emerge and closeout pretty quickly, and it is almost impossible to do it manually. That's because, by the time you are buying and sending crypto from one exchange to another, the opportunity will have passed. 

Successful arbitrage traders use trading bots that can identify and exploit trading opportunities in micro-seconds. The challenge comes in finding the right boots for the job. To increase the odds of winning, focus on the steps below before buying an arbitrage bot:

Its trading strategy: For best results, go for a bot to pair multiple cryptocurrencies. This way, you increase the odds of the bot finding trading opportunities all through the day.

The method of arbitrage: There are many trading strategies that an arbitrage bot can employ. Before you buy any bot, back-test its strategies and see if they have worked well in the past. 

Pros:

✅ Guaranteed and quick profits.

✅ Low cost of getting started. 

Cons:

 Arbitrage opportunities don't come easy. 

Read Also: The Top 5 Advanced Crypto Trading Strategies

6. Try Cryptocurrency Faucets

Sometimes, you may want to participate in the crypto market, but you do not have enough resources. In such a situation, cryptocurrency faucets may be one of the best routes to take and get started in your journey to cryptocurrency trading. 

Crypto faucets are pretty similar to dripping faucets. They are websites that reward you with tiny amounts of cryptocurrency for completing some tasks online. Some of the tasks you can complete and be rewarded for are surveys for various crypto services, among others.  

While the payments are usually pretty small, if you work hard enough, you can make a pretty good investment off it while figuring out a way to invest much higher amounts in the cryptocurrency markets. 

It also depends on the cryptocurrency you are getting paid in to complete tasks. For instance, if you receive payments in Bitcoin, you can be sure that your holdings will gain value over time. That's because Bitcoin is a cryptocurrency that has proven itself as an asset that can gain in value over time. In essence, even a tiny amount of it can turn into a sizeable investment when you leave it in a wallet over a few years. 

To give you an idea of how big faucets are, imagine someone who did a survey or did an interview and earned just $50 before 2014. If they held onto that amount, it is probably worth a lot today. 

Pros:

✅ Earning crypto through faucets is very easy. 

✅ In most cases, it doesn't take much of your time. 

Cons: 

 The payoff is quite insignificant. 

 You can't get rich off cryptocurrency faucets. 

Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.

7. Invest In ICOs

ICOs are a way for cryptocurrency entrepreneurs to raise capital by selling tokens. It's a method that allows them to raise capital without risking too much of their own money. ICOs were the popular route to cryptocurrency investing in 2017. However, after the cryptocurrency market crash of 2018, many ICOs were revealed to be scams. The result was a massive decline in the uptake of ICOs as a route to crypto investing.

That said, ICOs remain one of the best ways to invest in cryptocurrencies. That's because they give you an early entry into cryptocurrencies that could turn out to be gems in the long run. 

Besides, the ICO space has been evolving over the last couple of years. For instance, exchanges have been launching their own ICOs, also known as IEOs. Binance has been leading the race on this front, and investors in many of their IEOs have made investors huge amounts of money over the last couple of years. 

Whatever form they take, ICOs are an amazing way to make a low-risk investment into cryptocurrencies. That's because when you get in at launch, you are getting in at possibly the lowest price a cryptocurrency can go. By the time the cryptocurrency hits the market, and pumps, you are already in profit. Essentially, even the various crypto market dumps that follow are unlikely to affect your profitability. 

That said, it is always best to do thorough research before investing in an ICO. That's because the cryptocurrency market is unregulated, and scammers are rife in this space. Without proper due diligence, it is very easy to waste all your money on scams when pursuing ICOs as your investment strategy of choice. 

Pros:

✅ The chance to get into good projects early.

✅ The entry price is pretty low, thereby reducing the risk of loss. 

Cons:

 There are lots of scams in this market. 

 Risk of investing in worthless projects.

 Most projects are high risk with no guarantees of success. 

8. Try Crypto Gaming 

Crypto gaming has grown exponentially over the last couple of years. In the past, it was all about downloading games to your phone, and crypto games would award BTC prizes to users. 

Things have changed a lot lately, especially with the exponential growth of the Metaverse. 

This has opened a new world of play-to-earn gaming where players can create gaming characters and sell them for crypto.

Play-to-earn gaming has grown so much that even financial market analysts have high projections for this market. For instance, a Morgan Stanley analyst believes that the Metaverse, which encompasses play-to-earn gaming, could be worth $8 trillion by 2030.

Reddit co-founder Alexis Ohanian has echoed similar positive sentiments around play-to-earn gaming. Recently, Ohanian stated that in the next 5-years, 90% of all games will be play-to-earn.

With such prospects, it makes sense to start looking at play-to-earn gaming; it makes sense to participate in it to make money in crypto.

Pros:

✅ It is an easy way to earn cryptocurrencies.

Cons:

 The payoff is usually small. 

 It takes a lot of time.

 Scams exist in this market too. 

Don't Miss: 7 Reasons To Invest And Trade In Cryptocurrency

9. Become A Blockchain Developer

One of the best career choices so far is to become a blockchain developer. Due to the fast-growing nature of this industry, average wages for blockchain developers are likely to keep going higher for the next couple of years. 

There are many aspects to blockchain development that you can participate in and earn money in crypto. One of the most popular ones is to become a Dapps developer. With the growth in market areas such as DeFi, Dapps developers are likely to be in demand for many years to come. 

That said, becoming a blockchain developer is not the easiest thing to do. You need to have a background in coding, as most code is written in some of the more popular programming languages like Python. 

 There is also the challenge of hackers taking advantage and exploiting vulnerabilities in your code. That's because when you write a blockchain code, everyone can see it. This makes it easy for bad actors to scan for vulnerabilities and exploit them easily. Many projects have been compromised, and millions of dollars stolen through exploits on vulnerabilities.

Pros:

✅ Potential for an above-average salary.

✅ You are guaranteed your earnings. 

✅ You can launch your token and become wealthy off it. 

Cons:

 You need to understand coding. 

From the above, it is clear that there is no shortage of ways to make money with cryptocurrencies. 

If you have been in the market and understand its dynamics, you can benefit from the high volatility in the cryptocurrency market. That's because the quality of cryptocurrency brokers has been getting better over time. 

eToro is one of the best brokers that recently became very popular with cryptocurrency traders. 

Opening an eToro account is pretty easy.

If you are new to eToro, below is the process of trading Bitcoin (BTCUSD) with eToro.

How To Trade Cryptocurrency On eToro

eToro gives you a chance to BUY (go long) and Sell (go short), and capitalize on fluctuations in the cryptocurrency market. With eToro, you can apply different strategies for maximum profits. 

eToro is an online broker based in the U.K and is regulated by the Financial Conduct Authority among other regulatory bodies internationally. 

With eToro, you get to enjoy 0% commissions, ultra-low spreads, high leverage, and fast transaction execution. 

eToro also has a wide range of tools that can help you minimize risks, including protection against negative balances. 

Why eToro?

Low-cost trading

eToro offers you 0% commissions and very tight spreads on all trades.

High leverage

When trading crypto with eToro, you can use up to 30:1 leverage, with lot sizes as low as 0.01. 

This helps you earn more off small deposits. 

You can trade from anywhere

eToro is available on both mobile and PC, which means you can take advantage of market opportunities anytime, anywhere. 

To get started with your cryptocurrency trading journey and make money regardless of the market direction, follow the steps below:

Step 1: Sign up

It is free to open an account with eToro. If you have no prior trading knowledge, you can start with the demo account. 

Step 2: Select the cryptocurrency you want to trade

Most of the top cryptocurrencies are listed on eToro. You can also trade forex, stocks, and commodities on eToro. 

Step 3: Open a position (Either long or short)

Depending on your analysis, you can take a position in any direction. You can use eToro's numerous trading tools to help you make the best decision.

Step 4: Enter your order position size, then execute the trade

These are all things available on the eToro trading display when opening a position. You only need to adjust the numbers depending on your risk analysis. 

Step 5: Close your position and take profit

Once your trade has made a profit you are comfortable with, close the trade, and withdraw your profits. 

eToro Trading Fees

Trading fees are not fixed. To help you get started in cryptocurrency trading, below are some of eToro's crypto trading fees. 

eToro – The Best Platform To Trade Cryptocurrencies 

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

Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.

Read More:

These are the Easiest Ways To Learn Cryptocurrency Trading

What Are The Best Cryptocurrencies To Trade

Cryptocurrency Investing vs Trading: What's the Difference?

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