How to Make Money In the Cryptocurrency Industry: A Comprehensive Guide

Earning Passive Income From Cryptocurrency

Making money off cryptocurrency can be quite exciting. Many people have amassed huge profits from venturing into this relatively new sector. Today, there are several ways in which you can benefit or profit from the cryptocurrency sector. You just need to know what they are and how they work. This is where this guide comes in.

In this guide, you will be learning about 10 of the most famous ways to earn passive income in the cryptocurrency industry and how you could get involved with them. You will also discover which of these money-making methods suit you and what the requirements are. Let’s get right into it.

10 Ways to Make Money in the Cryptocurrency Industry

1- Day Trading

Day trading is, without a doubt, the most common approach used in profiting in the cryptocurrency industry. As the name implies, day trading involves opening and holding several trade positions for nothing more than a day.

Cryptocurrency day trading is commonly advertised as a get-rich-quick scheme, however, nothing could be further from the truth. Day trading requires a level of understanding and consistency to succeed at it. This cryptocurrency profiting method is indeed the riskiest as it deals directly with the volatility of the cryptocurrency market. Many traders (beginners and experts alike) have lost huge sums and even entire trading capital day trading the crypto market.

To succeed as a day trader, you need to build yourself in knowledge and discipline. Day trading comes with a lot of pressure and in most cases, it takes experience and time to get accustomed to this pressure. However, beginner traders can start by paper trading or trying out a demo account. These trading aids do not require real money and can be a very effective way of growing as a beginner.

Day trading is a very profitable way to make money in the crypto industry, you just have to dedicate time to getting properly accustomed to it. As mentioned earlier, day trading is not for those looking for get-rich-quick ventures.

Effort Required: High
Profit Potential: High
Risk: High

2- Earn Crypto Dividends

Earning crypto dividends is an easy way of making profits just by holding crypto tokens. Some cryptocurrency providers reward their customers with a certain percentage when they hold their crypto-asset for an agreed period. Some of these crypto providers include KUCoin, Neo, BTMX, and Komodo.

Unlike the banks which give roughly 1-2% interest on your cash holdings, these crypto providers can deliver as much as 5-10% quarterly for holding your tokens. This means that you’ll be better off investing your money in these tokens than keeping it in the bank. However, make sure that you have carried out thorough research on the cryptocurrency you want to get involved with before investing.

Effort Required: Low
Profit Potential: Medium
Risk: Medium

3- Arbitrage Trading

Arbitrage involves buying goods or services at low prices to sell in another market at a higher price. Arbitrage is quite similar to retail trading. Cryptocurrencies are built on decentralized blockchain technology which means they have no central controlling entity which also means that they have no fixed price. The price of a cryptocurrency could differ across exchanges since there is no fixed price. This is what makes arbitrage trading very lucrative in this sector. Simply buy a cryptocurrency on one exchange and sell it on another with a different price. However, this price difference across exchanges can be difficult to find and don't last long. Thankfully, there is software that helps create an aggregate of prices across exchanges, making it easier to identify arbitrage opportunities.

Even with the most sophisticated software, arbitrage trading in the cryptocurrency sector still requires a good deal of money to realize worthwhile profits.

Effort Required: Low
Profit Potential: Medium
Risk: Medium

4- Cryptocurrency Mining

In its early days, cryptocurrency mining was almost every crypto enthusiast’s dream. Today, however, this crypto-rewarding method has become insanely competitive as more and more miners are flooding into the sector, and miners with strong financial backing are acquiring more sophisticated mining rigs to increase their chances of completing mining tasks in the market.

In its early days, the risk associated with mining used to be very low as the prices and use of cryptocurrencies were also low. This made mining very easy and profitable. As time went by, cryptocurrencies became widely used which caused price and mining difficulty to surge. Now, only those with deep pockets and sophisticated machinery can ‘afford’ the luxury of staying consistently profitable mining major cryptocurrencies.

However, cryptocurrencies that are not mainstream can be quite profitable to mine. Small cryptocurrencies would be an excellent place to start your mining career before moving on to the big guys (if you still desire to do so). Mining is still a profitable venture especially when it involves a small cryptocurrency.

Effort Required: High
Profit Potential: Medium
Risk: Medium

5- Staking

Staking is another decent approach to make passive cryptocurrency revenue. With the difficulty and competition of mining on a steady increase, many have been turning to crypto-staking which is a less demanding mining alternative.

For those who do not know, staking was first introduced in 2012 by Sunny King and is another technique used for verifying and adding blocks onto the blockchain. Staking is used in crypto networks that operate on the Proof-of-Stake (PoS) blockchain framework. Staking requires coin holders to place cryptocurrency in a dedicated wallet which is later used to verify several transactions and create new blocks. Staking is a more convenient alternative to mining as it does not require as many overhead expenses.

How to Earn Revenue from Staking

Crypto staking is quite similar to holding interest over a fixed bank deposit. In this case, your cryptocurrency is locked away in a designated wallet for a set period. After this holding period elapses, your wallet is credited with a certain amount of additional coins as a reward for holding. Consequently, the more coins you stake, the higher your reward. This is simply how staking works.

Advantages of Staking

1. Staking requires little or no overhead costs.
2. This method is a far less risky alternative to mining.
3. Staking requires less amount of energy (electricity).

Disadvantages of Staking

1. Your coins are inaccessible until the holding period elapses.
2. In an event where the value of your coins begins to drop, you will be unable to do anything to save yourself from that loss.

Staking is only available in cryptocurrencies that run on a Proof-of-Stake framework. Some of such crypto networks include Komodo, Neo, and Navcoin. With staking, you don’t have to worry about market actions which give you free time to engage in other activities.

Effort Required: Low
Profit Potential: Medium
Risk: Low

6- Micro Earnings (Faucets)

Micro earnings are, without a doubt, one of the easier ways to earn cryptocurrencies. However, this method is probably the most time-consuming method amongst all others listed in this guide. This method involves earning fractions of a cryptocurrency from micro earning websites for completing little tasks. Listed below are some of the popular micro-task website classes you can earn cryptos from:

  1. Paid-To-Click Websites (PTC)

As the name implies, these are websites that pay you in cryptocurrency (mostly Bitcoin) for viewing, clicking, and visiting certain ads. One such website is BTC Clicks. The payment structure varies across websites, so it is advisable to do a little research on PTC websites to find the ones with the most worthwhile rewards.

  2. BTC Faucets

These are websites that reward you with fractions of BTC when you partake in several surveys or enroll in a raffle which generates random numbers and rewards winners. The rewarding potential in faucets is quite small considering the time spent, however, it is the fastest and simplest way to earn crypto rewards. With faucets, you can earn $1-$5 daily and unless you can automate this process, it can be time-consuming and counterproductive.

  3. Micro jobs

This involves completing quick and easy tasks for small amounts of cryptocurrencies. Micro job websites usually require you to test plugins, run tests to see if a website is compatible with a specific browser, retweet posts on Twitter, and carry out several other simple tasks.

Earning cryptos through micro-tasks can be very productive when you find a way to balance your time spent and tasks completed.

Effort Required: Low
Profit Potential: Low
Risk: Low

7- Airdrops

Airdrops are free coins that are awarded to certain clients for holding certain cryptocurrencies. Also, some cryptocurrency networks use airdrop as an advertisement strategy by crediting little amounts of crypto coins to users who take polls, share social media posts, etc. Airdrops are also given to clients randomly by some cryptocurrency networks.

However, be sure to always verify airdrop rewards and stay away from suspicious- looking rewards. There are several scam websites and crypto companies that defraud unsuspecting victims through fake airdrops. Use ‘Airdrop Alert’ to ensure that you’re not getting scammed. Airdrop Alerts are websites that automatically verify the source and authenticity of airdrop rewards you receive.

Effort Required: Low
Profit Potential: Low
Risk: Low

8- Crypto Writing

For those who are knowledgeable about cryptocurrencies and matters that relate to them and have passion for this sector, writing about the industry is a great way to earn crypto rewards. Although there are varying reward rates across the industry, writing on cryptocurrency is very lucrative especially when you’re good at it. Many cryptocurrency companies are ready to pay hundreds of dollars for articles, you just have to prove to them that you're worth the expense.

Listed below are some crypto companies you could begin writing for:
1. Steemit
2. Lunyr
3. Publish0x
4. Bravocoin

Effort Required: Medium
Profit Potential: Medium
Risk: Low

9- Affiliate Marketing

Affiliate marketing is one surefire way to earn passive income in practically every industry. Affiliate marketing is a simple act of earning monetary rewards for advertising other people’s businesses and products.

Amazon was one of the first companies to incorporate this marketing strategy on a large scale. Today, many companies pay their “affiliates” in cryptocurrency.
Companies engage in different forms of referral rewarding systems. Some companies offer a one-time referral reward while others promise a commission for every single time you bring in a customer.

Many cryptocurrency exchanges, trading platforms, trading bot providers, and other cryptocurrency-related businesses run affiliate programs. Some popular affiliate-rewarding cryptocurrency companies include Coinbase, BitStarz, Coinmama, Binance, and many others.

Effort Required: High
Income: Low-High (varies according to the traffic you pull)
Risk: Low

10- HODL

HODL is a common abbreviation for ‘Holding On for Dear Life’ in the cryptocurrency industry. This crypto trading method is a very popular way of earning cryptos and involves buying and holding cryptocurrency for extended periods.

This trading strategy has been tested time and again and has created hundreds of overnight millionaires in the cryptocurrency industry. HODLing is an excellent way to make money in any financial market especially for those with little or no trading experience.

HODLing is a great way to gather passive income in the crypto sector and it doesn’t require huge sums to get involved with. Any amount you have will do. However, when HODLing, never go on the FOMO (Fear Of Missing Out) impulse. Always wait for the price to bottom out before getting involved with an instrument. This way, you know you're getting the best deal possible and not shortchanging yourself.

Effort Required: Low
Profit Potential: High
Risk: Medium

Final Note

At this point, you should have gained extensive insight into the several ways with which you can earn cryptocurrency in the ever-growing cryptocurrency industry. If you decide to get involved with any of the methods listed in this guide, be sure to carry out additional research to make sure you understand all that is at stake.

One parting advice you should take from here is to never invest or risk money you’re not comfortable or ready to lose. For example, do not get involved with the cryptocurrency market with your retirement fund or your life savings, that is just being financially irresponsible. Also, always exercise patience in all your cryptocurrency endeavors. Good things take time and the cryptocurrency industry is no exception.

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