How to Make Money With Bitcoin
Guest article by James Page
See also: Cómo ganar dinero con Bitcoin
Bitcoin, the world’s first and most popular digital asset, has gained a reputation for being profitable -so profitable in fact that mainstream financial institutions like Wall Street and banks are now investing their fortunes in the digital asset.
Cryptocurrencies, and mainly Bitcoin, are becoming more and more popular as the profits rise, but it isn’t always easy to understand how you can make money with Bitcoin, especially if you are only just getting started.
The beauty of Bitcoin is that you don’t have to be a financial expert or hire the services of one in order to invest in the digital asset. Anyone can buy Bitcoin and make money from it, as long as they understand how it works.
If you are interested in investing in Bitcoin to make profits but don’t know where to start, don’t worry. Here are some of the best ways you can make money with Bitcoin.
1. HODLing
HODLing refers to buying Bitcoin and “holding on for dear life” as the digital asset reaches new record values and surpasses them. The term originated on the Bitcointalk forum as a misspelling for holding but catched on. Now, millions of people HODL their Bitcoin through wild price swings that the asset experiences in the turbulent waters of finance, hoping that once the waters settle, Bitcoin will emerge as the new gold.
There are a lot of reasons to think so, too: after all, the price of Bitcoin went from pennies to tens of thousands of dollars within a few years after its launch. There are many financial experts who think Bitcoin might replace gold as the primary store of value in the future.
Technically, HODLing is relatively simple, you just buy Bitcoin and hold out on selling it for the foreseeable future. However, holding onto your Bitcoin might be tougher in practice, and rising prices can tempt you to sell and make a quick profit. If you want to try HODLing, steel your nerves and invest in a secure wallet for long-term protection.
2. Trading
Bitcoin trading is a very popular activity among cryptocurrency investors as Bitcoin’s price volatility can be immensely advantageous for traders. Trading involves buying Bitcoin when the prices are low and selling it for higher prices later on, though there are some different trading practices.
Day trading involves buying and selling BTC in the short term. The price of Bitcoin can move more than 8% in a day or sometimes more, which means there are plenty of opportunities for making a profit if you are fast enough. Day traders can make multiple transactions in a short amount of time to take advantage of price volatility, though this kind of trading requires diligence and attention.
Swing trading involves buying Bitcoin when the prices are low and selling once the market prices surpass the original price. Unlike day traders who make quick transactions in a short time, swing traders wait for a while to make bigger profits.
If you have experience with trading, you can also try some advanced options such as binary trading and futures trading. These trading options require a more extensive understanding of markets and a good deal of experience as they carry more inherent risk, but they can be very rewarding with the right tactics.
Finally, you can make a profit with Bitcoin through arbitrage trading. Since Bitcoin is a decentralized digital asset, it doesn’t have a universal price. Instead, each exchange has its own Bitcoin market with varying prices.
Arbitrage trading refers to buying Bitcoin at one exchange and selling it on another to make a profit. For example, you can buy BTC on a cryptocurrency exchange and then create a sell advertisement on LocalBitcoins for a higher price. You can set your own prices on LocalBitcoins to ensure profits from your asset sale.
3. Earning Bitcoin Tips
One of the most understated yet fruitful methods for earning BTC is through tipping. You can perform small services for people and allow them to tip you with BTC for the content you provide. For example, Bitfortip is a platform that allows people to ask for help in exchange for Bitcoin. You can answer questions or help people with certain tasks in exchange for BTC tips. Twitter has also launched a Bitcoin tipping feature so if you have a strong online presence, you can ask for BTC tips from your followers.
4. Affiliate Marketing
Affiliate marketing is a great way of making Bitcoin while also educating other people on cryptocurrencies. There are many cryptocurrency companies that pay BTC to affiliate marketers who promote their services and content.
Bitcoin is a growing market, trying to reach mainstream status, so affiliate marketing offers a lot to those interested in earning Bitcoin through raising public interest in the asset. You can earn money by promoting a company’s products and services, generating their visitor traffic, or even get commissions on Bitcoin sales.
If you are interested in learning more about Bitcoin and other cryptocurrencies and you want to share your knowledge with others, affiliate marketing can be a good source of income. However, it is important to research who you are promoting before you make any deals, as you don’t want to be involved in scams that are unfortunately common in the cryptocurrency ecosystem. LocalBitcoins has an affiliate program you can take part in to earn BTC. You can learn more about the program here.
5. Mining
Bitcoin mining is another way of making BTC, though it has become quite costly in recent years. Bitcoin miners are responsible for validating Bitcoin transactions and they are awarded Bitcoin and transaction fees for their work.
However, mining has become quite competitive in recent years and it is not easy to earn BTC from mining. If you are serious about mining, you’ll need to purchase professional mining equipment and join a mining pool in order to make a profit. Mining pools combine the computing power of several miners to validate Bitcoin blocks and divide the profits among the participants. Some of the most popular mining pools are AntPool, Poolin, SlushPool, and F2Pool.
Industry-standard mining rigs cost at least a few thousand dollars and there is a considerable electricity bill that accompanies Bitcoin mining, so make sure you calculate the costs beforehand to see if mining can be a good venture for you before jumping in. If you are interested in mining, check out our Bitcoin mining guide.
6. Micro-Payments
You can earn BTC through pay-to-click websites and apps. Your earnings will be quite small, and the process is somewhat boring, but in the end you can receive dependable payments for very little effort. You can make small but quick profits by watching videos, completing surveys or simply clicking on certain ads. You can check out BitcoinGet, CoinTasker, adBTC and Coinpayu for micro-payment opportunities with BTC.
A Few Words Before You Go…
Bitcoin became the best performing asset class of the decade within 10 years of its launch. Its cumulative gains outpaces the stock market by at least 10 times, and many people regard it as a more viable option for generating wealth than the regular stock market. Bitcoin is gaining more momentum with each passing day as institutional investors and the general public begin to embrace the asset.
There are many ways you can make money with Bitcoin, a few of which we discussed above. If you are interested in Bitcoin, or want to try your hand at Bitcoin trading, you can start by purchasing a small or large amount on LocalBitcoins to dip your toes in the market and see how you like it.
