Making money in crypto is simple but if you come here with a get-rich-quick mindset, you’ll be disappointed.
It all depends on how much money, time, or effort you’re willing to invest and your risk tolerance.
In this post, we discuss the 12 proven ways to make money with crypto that you can start exploring today.
12 proven ways to make money with crypto
Each of these requires you to invest either money, time, or effort into it to get something out.
1. Buy and hold (HODL)
HODL is a long-term crypto investment strategy that requires you to buy coins with the potential for significant price appreciation and hold them in your wallet for months or years.
It’s the safest and most popular way to make money in crypto, and most people who ever made it big in crypto are long-term holders of successful coins.
So, what you buy and how long you hold are very critical to the success of this strategy as buying the wrong coin or not holding long enough can both lead to loss.
Whether you’re new to crypto or an experienced investor, HODL should be your primary investment strategy.
You should start with buying and holding BTC and ETH as the pillars of your crypto portfolio as they’re more likely to continue to grow for years to come.
Then diversify into other coins with strong fundamentals as your portfolio size increases or you get comfortable with taking more risks.
What are the risks of HODLing?
HODLing may be the safest crypto investment strategy, but it also has risks.
- There’s no guarantee the price of the coin will increase, it may never reach your profit target, or it may take more time than you expected.
- The project can fail due to any reason, and you’ll lose all or a portion of your money. Like traditional businesses, not every crypto project will survive.
2. Crypto trading
Trading is the fastest and riskiest way to make money in crypto. It is the art of buying and selling or swapping one crypto asset for another for quick profit.
The idea behind trading is to buy a coin when the price is low and sell it when the price is higher in a short time.
Buy low, sell high. That’s how it’s supposed to be. But it’s not that simple.
The crypto market is extremely volatile, highly unpredictable, and heavily manipulated due to its unregulated nature and low liquidity.
Also, it’s a zero-sum game.
That means, your profit is someone else’s loss and vice versa. And there are professional players with all the knowledge, skills, resources or tools to beat you at it.
Except you’re a professional yourself and know exactly what you’re doing, you’ll be wasting your time and money trading.
Furthermore, crypto trading can be stressful and dangerous to your mental and physical health as it demands constant attention in monitoring and analysing the charts.
3. Crypto lending
You can lend your crypto assets on crypto lending platforms to earn interest, which is usually paid in the same or a different coin.
This works just like your regular savings account with a traditional bank where you park your money and receive regular interest payouts.
There are centralised and decentralised crypto lending platforms where you can lend your BTC and ETH or any other coins and earn decent interest while also hoping for their price to increase.
Whether you decide to use a centralized or decentralized crypto lending platform depends on your risk and privacy preferences.
However, both work great, but centralised platforms seem to offer better interest rates but also greater risk.
The major risk with crypto lending is that the platform could be hacked, exploited, or rug and the funds drained.
4. Staking
Staking is the act of locking your crypto assets to earn rewards.
Some crypto projects require you to stake their native coin to secure the network or participate in governance and earn rewards.
These rewards can be paid in the same coin you deposited or in a different token. It can also be paid in a combination of the same plus a different token.
Whatever the reward scheme, the concept is the same — lock your tokens, and earn rewards while also hoping for the price of both your original token and the reward token(s) to appreciate.
Some projects use staking as a way to distribute their native token to their most loyal users or investors.
For example, you can stake ARENA on The Arena to earn more ARENA plus AVAX, among other exclusive privileges for stakers.
5. Liquidity mining
Liquidity mining is when you deposit your crypto assets into a liquidity pool on a DeFi protocol to facilitate trading and earn a share of all fees generated from the pool.
In addition to the trading fees collected and distributed among the liquidity providers, the platform may also reward you with their native token.
This is usually done to encourage users to provide more liquidity on the platform and build a strong community of loyal users.
For liquidity mining, impermanent loss (IL) is the primary risk you must be aware of.
IL is a situation in which the dollar value of the crypto assets you deposited to the liquidity pool may be less than what it would have been if you had just held the tokens in your wallet.
6. Yield farming
Yield farming is an extension of liquidity mining which entails staking your liquidity provider (LP) tokens to earn even more rewards.
Your LP token is like a receipt indicating how much you have in a particular liquidity pool.
Several DeFi platforms operate “farms” where you can deposit your LP token and earn their native or any other supported asset in addition to your liquidity mining rewards.
With yield farming, you’re earning from almost 3 different sources with a single investment.
You earn…
- from the (potential) price appreciation of your crypto assets.
a share of all fees generated in the liquidity pool. - more of the same or other tokens in the farms which could also increase in price.
- Some farms allow manual or auto-compounding to help you increase your tokens faster. If it’s available, always go for auto-compounding.
So, to maximise your earnings, add your crypto assets into liquidity pools that allow you to stake your LP token and farm other tokens.
7. Crypto airdrops and giveaways
Crypto airdrops and giveaways are the most popular ways to make money in crypto without investing cash.
It’s a strategy that crypto projects use to attract new users and investors by rewarding them for performing simple tasks.
They could ask you to interact with a social media post, join their communities, use their platform, or do other simple tasks to be eligible for the airdrops.
However, some airdrops can be retroactive — rewarding users who have interacted with a platform or performed specific tasks in the past.
For example, the Uniswap (UNI), Optimism (OP), and Arbitrum (ARB) airdrops were all retroactively distributed to people who used the projects or networks in the past and satisfied some specific requirements.
So, whereas some airdrops require you to follow specific instructions to be eligible, you’ll have to be at the right place at the right time and doing the right thing(s) to qualify for others.
8. Crypto mining
Similar to staking, cryptocurrency mining is a way to secure a blockchain network and validate transactions to earn rewards.
However, unlike staking, mining does not require buying and staking a token. Rather, you mine with special machines or computers designed to solve very complex mathematical problems.
Cryptocurrency miners compete among themselves to be the first to solve these complex mathematical puzzles and earn the corresponding mining rewards.
Mining is no longer as popular or profitable as it used to be when crypto was still very niche, especially among retail investors.
Now, it takes a lot of money to invest in and be profitable with crypto mining. So, it’s not a simple or easy way to make money in crypto anymore.
Only technocrats and well-funded individuals or companies can run or make meaningful money from crypto mining now.
9. Crypto contests
Every now and then you’ll see a crypto writing, meme, video, or other contests you can participate in to win crypto prizes.
Similar to airdrops and giveaways, crypto contests are a way to make money in crypto without investing any cash.
All you need is the skill and experience required to compete in the contests and win some crypto.
I have participated in several writing contests, especially on Publish0x and earned some reasonable amounts from them.
So, watch out for crypto memes, videos, writing, and hacking contests on social media you can participate in and earn free tokens.
10. Referral and affiliate programs
Depending on the size of your audience and influence, you can make a lot of money in crypto by promoting your favourite platforms.
If you know about or have used some great platforms that are relevant and useful to your audience, tell them about it and include your referral link.
When they decide to visit and use the platform through your link, you earn a referral commission paid by the project from their revenue.
This way, you create a win win win scenario where your audience gets useful information, the project gains new users, and you earn some crypto.
This blog for example depends on referral commissions to earn some revenue, and we push only the best projects.
All you need to get started with affiliate marketing is:
- Register on the platform you want to promote and generate your affiliate link.
- Promote the platform via articles, videos, podcasts, etc, and include your affiliate link in them.
- Earn a commission for every sale the project generates through your affiliate link.
Your referrals or friends don’t have to pay anything extra for you to earn a commission. In fact, in some cases, they will get a sizeable discount for using your referral link.
Most crypto projects will pay your referral rewards in their native token or the same token your referrals spend on the platform.
Either way, you’re earning some crypto that you didn’t have to buy with cash.
11. Get a job or become a freelancer
Get a job at a crypto company that pays you in cryptocurrency or request your current employer to pay all or part of your salary in crypto.
If you can’t get a salary-paying job, become a freelancer and get paid in crypto for your services.
Regardless of what your profession is, you can become a freelancer, and get paid in crypto for your services.
One of the best places to start is at GibWork, a jobs marketplace connecting businesses with freelance talent.
12. Start a crypto business
Become a cryptocurrency entrepreneur by starting your own crypto company or project where you get paid by clients in crypto.
There are several cryptocurrency business ideas you can explore. For example, you can
- Become a local crypto merchant or dealer who buys and sells crypto from others for fiat.
- Build your own centralised or decentralised cryptocurrency exchange, if you have the money to hire developers or you have the skill to build it yourself.
- Start a crypto marketing agency where you help different projects with branding, marketing, etc, and get paid in crypto.
- Buy and install Bitcoin Automated Teller Machines (bATM) and start earning a share of all purchases and withdrawals through your bATM in fees.
- Create your own crypto project with a token and get a share of the founders or team allocation.
There are so many businesses you can start and make money with crypto if you think about it.
Better still, you can start accepting crypto in your existing local or online store and earn crypto with that.
But note that you’ll be exposing yourself to the high volatility of the crypto market, which can work for or against you.
Conclusion
Making money in crypto is not rocket science as you can see from the above 12 solid and legitimate ways to earn crypto.
You can leverage your financial resources, time and effort, or skills to start earning crypto daily starting from now.