Cryptocurrency is a digital currency in which transactions are verified and records maintained by a decentralized system using cryptography, rather than by a centralized authority. The main point of cryptocurrency is to fix the problems of traditional currencies by putting the power and responsibility in the currency holders’ hands. Cryptocurrency is growing more and more since everybody is keen on making money from cryptocurrency investment. However, this is possible only when you have the right strategies in place. Here are 10 ways to make money with cryptocurrency in 2022.
1. Know About The Cryptocurrency You Want To Make Money On
Knowledge is always the key. First, one has to know how the cryptocurrencies’ prices determine, how they work, and on which platform should one buy or sell them. It is also advisable for one to always stay updated in order to make more profits. The following are types of cryptocurrencies:
• Bitcoin
• Litecoin
• Ethereum
• Cardano
• Bitcoin Cash
• Dogecoin
• Ripple
• Monero
• NEO
• Steller
• Ethereum Classic
• Dash
• Zcash
• Namecoin
The best cryptos to buy today are;
• BIT Mining Limited
• Canaan
• Bitfarms LTD.
• Marathon digital Holdings
• Coinbase Global
2. Understand What Blockchain is and How it Works
Blockchain is a special type of digital network that cryptocurrencies rely on. One has to understand that these two have different features yet work in a similar way.
Understanding these features would be a very smart strategy to make money with cryptocurrency in 2022.
The goal of blockchain is to allow digital information to be recorded and distributed, but not edited. In this case, a blockchain is a foundation for immutable ledgers or records of transactions that cannot be altered, deleted, or destroyed.
Blockchain technology achieves decentralized security and trust in several ways. To begin with, new blocks are always stored linearly and chronologically. After a block has been added to the end of the blockchain, it is extremely difficult to go back and alter the contents of the blockchain unless a majority of the network has reached a consensus to do so.
Benefits of Blockchains
• Cost reduction. Consumers pay a bank to verify a transaction, Blockchain eliminates the need for third-party verification and with it, their associated costs.
• Efficient transactions. If you attempt to deposit a check on Friday evening, for example, you may not actually see funds in your account until Monday morning. Transactions can be completed in as little as 10minutes and can be considered secure after just a few hours.
• Banking the unbanked. The most profound facet of blockchain and bitcoin is the ability for anyone regardless of ethnicity, gender, or cultural background to use it.
Pros and Cons of Blockchain
From greater user privacy and heightened security to lower processing fees and fewer errors.
Strengths
• Decentralization makes it harder to tamper with
• Transactions are secure, private, and efficient
• Transparent technology
• Cost reductions eliminating third-party verification
• Improved accuracy by removing human involvement in verification
• Provides banking alternative and a way to secure personal information for citizens of countries with unstable or underdeveloped governments.
Weaknesses
• Data storage limitation
• Regulation varies by jurisdiction and remains uncertain
• Low transactions per second
• Significant technology cost associated with mining bitcoin
• History of use in illicit activities such as on the dark web
3. The Time Period
Of course, you cannot expect to become a billionaire in a fortnight. This is because the cryptocurrency market is highly volatile. One has to prepare for a long-term investment before investing in the cryptocurrency market. It is evident that those who hold for a long term, fetch very high returns.
4. Staking
Staking is very important because the investors stake their holdings to validate transactions made by others, thereby making money. The investor’s lock up in a sizable stake is a very smart way to make money with cryptocurrencies. Staking also has some rewards. Some of them include:
• Earning additional tokens-stakers are not guaranteed anything, as the process of forging new blocks and doling out is randomized but stakers do earn interest so to speak by staking.
• Stakers get voting rights and participation.
• Staking can be an easy way to grow holdings.
There are also risks of staking that include:
• It can require you to lock up your coins for a minimum amount of time. In this case, one is unable to do anything with your staked assents such as selling them.
• There may be an unstacking period of seven days or longer when you want to unstake your crypto.
• The price with crypto staking might go down.
You should stake and not stake in the following circumstances:
• If you have crypto that you can stake and you are not planning to trade it in the near future, then you should stake it.
Here are some of the cryptocurrencies that you can stake:
• Solana – It is a blockchain designed for scalability since it offers fast transactions with low fees.
• Cardano – This is a friendly cryptocurrency that was founded on peer-reviewed research and developed through evidence-based methods.
• Ethereum – This was the first cryptocurrency with a programmable blockchain that developers can use to create apps.
• Polkadot – This allows different blockchains to connect work with one another.
5. Learning From the Experts
There are many experts who are packed with a lot of knowledge about cryptocurrency. One can follow these experts on various platforms and read every piece of their post. Some of the top investors include;
• Barry Silbert
• Micheal Saylor
• Tyler and Cameron Winklevoss
• Elon Musk
• MichealNovogratz
6. Earn Interest in your Crypto
One can earn interest on cryptocurrencies just like the way our money held in the savings account with banks earn interest.
How to earn interest in cryptocurrency
• Open crypto account – To get started, you will need an account with a platform that allows you to earn interest in your crypto holdings. If you already have a Coinbaseaccount, you can join the waitlist to stake Ethereum for the Eth 2.0 upgrade coming later this year.
• Compare interest rates – You can see the interest rate you will earn on different cryptocurrencies directly on the website of the platform. Depending on if the company takes a cut of the interest you earn may vary, even if you invest with the same cryptocurrency. A good interest rate to earn on stable coins is typically between 6% to 9%. Some interest rates in crypto are much higher, sometimes over 100%.
• Add cryptocurrencies to your portfolio. Many platforms that let you earn interest make it easy to fund your account. Some websites like BlockFi and Coinbase, let you buy crypto directly with your bank account. This makes it easy to earn interest in cryptocurrencies if you don’t already own one.
• Earn interest – Once you have added funds to your interest-bearing account, you will start earning interest. Earning interest in cryptocurrency is particularly attractive to cryptocurrency investors who believe in the price of bitcoin and other cryptos in the long term. This is because of the exponential growth potential on a crypto interest account. Most interests earned through crypto are floating interest rates based on supply and demand. Although the rate fluctuates, most larger coins have a relatively stable APR. For example, Bitcoin interest rates typically range between 4% to 8%.
7. Trading
Trading is a fundamental economic concept that involves buying and selling assets. These can be goods and services where the buyer pays the compensation to the seller. There are risks in trading cryptocurrencies and therefore one has to minimize these risks. Some of them include minimizing the trading cost, diversification, using stop loss, and following the cryptocurrency news. When you buy a cryptocurrency, you are purchasing the assent upfront in the hope that it increases in value. But when you trade on the price of a cryptocurrency, you can advantage of markets that are falling in price, as well as rising. This is called going short.
Some of the benefits of trading include:
• Leveraged exposure. You could get a large exposure to a cryptocurrency while only tying up a relatively small amount of your capital.
• Improved liquidity. This is the measure of how quickly and easily a cryptocurrency can be converted into cash without even impacting the market price. This is important because it brings about better pricing, faster transaction times, and increased accuracy for technical analysis.
8. Analysis
One can make an accurate prediction pertaining to the performance of cryptocurrencies on the basis of charts. One has to understand that making money with cryptocurrencies needs a lot of analysis. One needs to be able to predict whether the market will shoot or fall. One can use fundamental analysis. Understanding this fundamental analysis helps you to evaluate whether a cryptocurrency is worth buying or selling. The fundamental analysis enables non-technical investors and seasoned traders to trade market movement with confidence.
Factors to consider when analyzing crypto fundamentally
• The main goal of crypto fundamental analysis is to reduce investor risk and evaluate the profit potential of the assent.
• Consider the harsh rate. Blockchain plays a significant role in securing the network and diving into the data proves to be valuable for crypto fundamental analysis. The harsh rates are estimated based on publicity accessible data, but the true harsh rate is never actually known.
• The transaction value and fee. The fundamental analysis also prioritizes the assessment of transaction values. A consistently high transaction value shows a currency in steady circulation, while comparisons reveal data concerning potential future market movements.
• Circulating supply. The circulating supply of cryptocurrency refers to the total supply or the maximum potential supply that is not static and can change over time since the coins can be burned.
• User behavior. This type of analysis is supposed to give investors a holistic overview. This user behavior is one of the most difficult factors to evaluate.
• Analytical tools. As cryptocurrency trading has grown, the popularity of analytics ranging from network statistics to technical market analysis has proliferated.
9. Working in the cryptocurrency industry
This is a better way of making money with the cryptocurrency industry. In this case, one comes to know exactly the industry works. The strategies in which you can make money and how you can reduce your risks.
Skills needed for a job in the cryptocurrency industry
• Blockchain architecture
• Coding
• programming languages, including JavaScript and Python
• Web development
• Algorithms used to process data
• Cryptography
Best crypto companies include: Coinbase, Gemini, ConsenSys, Circle
10. Learn about the exchanges
It is always better to have done thorough research about cryptocurrency exchanges. There are many ways in which one can find these exchanges and learn about them. There are types of cryptocurrency exchanges, some of them include;
• Classic exchange process
• Peer to peer crypto exchange
• Brokers and CFDs trading
• Derivations exchanges
How to Choose a Cryptocurrency Exchange
· Security. Different exchanges offer different security measures and insurance policies.
· Accessibility. Not all states or countries allow access to every crypto exchange, so make sure whichever exchange you choose is available where you live.
· Fees. Understand what it will cost you to buy and sell crypto on the exchange you choose.
· Coins offered. Some exchanges offer only a limited amount of coins.
· Storage. Many exchanges come with associated crypto wallets offering to help you keep your investment secure.
Best Cryptocurrency Exchanges of 2022
• Good for beginners: Coinbase
• Good for experienced investors: Gemini
• Good for practicing crypto trading; eToro
a) Coinbase
Coinbase was the first cryptocurrency exchange to go public on the Nasdaq in 2021, but it has been around since 2012. This offers over 50 cryptos and a free wallet service with private key access. Coinbase also shares its measures openly and keeps the majority of the user’s crypto secure, offline storage to protect it from the threat of hacking and digital theft.
b) Gemini
Gemini was launched in 2015 and is good for both beginner investors and active traders. Gemini offers over 40 cryptos and a suite of products that can add value for more seasonal investors. It is very open about its security measures and keeps the majority of your crypto in an offline cold storage system. Gemini offers tools and upgrades features that can be helpful for more advanced traders but also have a simpler interface to help beginners get their ground.
c) eToro
eToro opened to investors in the US as a cryptocurrency exchange in 2018.eToro offers a simple interface and over 20 cryptos to choose from. It offers a few coins anyway, Bitcoin and Ethereum, which are available on the platform.
It also offers a unique feature: eToro virtual portfolio, which lets you practice investing more.
