As soon as investors buy Bitcoin on paybis, only one thought occurs to them: how to increase the value of their portfolio. Earning money with cryptocurrencies is very common these days and the possibilities are increasing.
In this article, we review our favorite methods and help you discover how you too can make money with Bitcoin. After reading this post, you should have a good overview of all the financial services you can implement to grow your portfolio.
Method #1 – Staking
One of the most popular ways to make money with Bitcoin is to invest. In short, staking refers to the process of “locking” your coins, making them unavailable for a short period of time. By investing it, you earn interest in the form of the same (or different) cryptocurrency, which is then credited to your account.
There are two different types of bets:
- Exchange Staking – Staking services can be implemented for a wide range of cryptocurrencies that operate on the basis of PoS consensus. Exchanges distribute rewards to individual coin holders and the barrier to entry is usually very low.
- Investing in your wallet: This process is more “old school” and depends on the mechanisms of the particular blockchain. Users invest their coins in any supported wallet and automatically receive rewards based on the size of their holdings. For example, users who invest NEO in their wallet get GAS coins as a reward. Please note that for some currencies the minimum bet size is much higher than when investing in exchanges.
Method #2: High Yield Savings Account
Savings accounts became popular in 2018-2019. when popular exchanges started offering more profitable alternatives to bank accounts. The annual percentage return depends on the cryptocurrency invested and is known to be at least 10 times higher than keeping your money in a bank account.
To give a brief example, Blockchain Wallet currently offers savings accounts that yield an average of 5% APY for Bitcoin and up to 12% APY for stablecoins.
This is the least risky way to increase the value of your portfolio and the way many high net worth investors use to generate passive income.
Method #3 – Trade
Trading is obviously the most common way to (potentially) profit from your Bitcoin. Users trade cryptocurrency pairs on exchanges in hopes of outsmarting the markets and, in turn, increasing the value of their portfolio.
Generally speaking, there are two types of merchants:
- Swing Traders – These traders base their decisions on price charts and indicators and often use leverage to increase returns. This method is considered useful for short-term traders and is heavily based on technical analysis (TA).
- Sentiment Traders: These people base their trading decisions on the overall popularity and “feel” of the market as a whole. Commonly known as intermediate traders, they will make up a small number of traders on an annual basis, usually when there is a change in market cycles or during significant events that affect the markets. Sentiment traders use sentiment analysis (SA) to make their decisions.
The above possibilities are further divided into several subsections, making trading a very broad and complex subject that requires continuous education and practice. Even then, only a small percentage of traders end up being profitable in the long run.
Method #4 – HODLing
“HODL” comes from the word “hold” and is an acronym commonly used among cryptocurrency investors to explain the long-term investment process. In other words, HODLers are those who do not sell their coins when volatility hits the market, but prefer to keep their coins stored in a wallet due to their unwavering faith in their fundamentals.
Bitcoin is often the HODLed currency, and those who managed to control their emotions and not sell over the years are now handsomely rewarded. Obviously, this process comes with a lot of anxiety as the markets fluctuate a lot; however, those who have been through the process long enough are now immune to such feelings.
In order to make money buying Bitcoins through HODLing, it is important to research the basics of the coin. For Bitcoin, this would be Satoshi Nakamoto’s 9-page white paper, outlining Bitcoin’s underlying technology and its future potential.
To end
You should now have a better idea of all the different methods you can use to increase the value of your portfolio. In summary, these are the methods we looked at:
- Put Bitcoin on an exchange or wallet (works for other cryptocurrencies too)
- High-yield savings accounts, which offer at least 10 times the returns of the average bank.
- Trade your currencies, either through swing trading or practicing sentiment trading.
HODL your Bitcoin for the long term and study its fundamentals. This is the least risky and potentially the most profitable option you can choose.
Categories: How to
Source: HIS Education