Want To Earn A Crypto Living? Top 5 Ways To Earn A Crypto Income

Investing in Crypto

Investing in cryptocurrencies is the most prominent and essential way of generating profits with crypto. However, there are some things to keep in mind before accessing the crypto market. First, we need to choose a digital asset that has a promising future. Once we decide what asset we want to buy, we can buy it via a crypto exchange like Binance or Coinbase.

Holding a cryptocurrency is the most basic way of investing in cryptocurrencies — and the slowest way too. This practice is called “HODL” — a slang term in the crypto community for holding a coin. HODL profits are slower than using leverage or spot trading in cryptocurrency exchanges. So, when you decide to HODL a coin, you need to extensively study the currency you wish to buy, like what future all-time highs (ATHs) it can reach, depending on its current market cap.

Try to write down what kind of crypto you want to buy, the date of purchase, the price at which you’re buying, the amount of capital you’re investing, and what return percentage this investment can give you in the next 6 to 12 months. This way, you can see the progress while writing down the variations in a spreadsheet.

Crypto Trading

Cryptocurrency trading is the most popular way of making a living with cryptocurrencies directly. There are numerous exchanges where you can trade a wide range of digital assets. Crypto trading can be risky, and it requires extensive study to enter the market and make consistent profits while managing risks.

Jumping into crypto trading means you already know about trading. There’s no significant difference: you can set your stop-loss, patterns, and indicators, predict prices, etc. The main difference is the market that you’re trading. Cryptocurrencies are inherently volatile, and the crypto market usually attracts investors with a great appetite for risk. A 20% – 30% dip for a stock is considered a disaster in traditional finance, but it’s pretty normal in the crypto/DeFi ecosystem.

Learning to trade and how to manage your capital is the best way to go. The same principles and techniques you would use for trading traditional markets as Forex or stocks apply to the cryptocurrency market. Therefore, the basis when operating is similar. You can do scalping, day trading, swings, etc.

Remember never to leave your funds in exchange. The fact that crypto exchanges focus on digital assets doesn’t exclude them from being cyber-companies, making them subject to cyber-crimes like hacks, DoS attacks, or phishing scams. Always move your funds to a private wallet, preferably cold storage.

Mining

Cryptocurrencies are designed to reduce their supply until they reach zero — similar to commodities like gold, silver, and other precious metals. Therefore, mining becomes more difficult over time because the mining reward is halved every few years until it reaches zero.

Mining crypto is the process of using large amounts of computational power to process transactions through a consensus mechanism called Proof of Work (PoW). Thanks to this system, the network remains decentralized, secured, and synchronizes all participants in the network.

In essence, miners go through a computerized process in which they search circulating currencies on the network. Cryptocurrency mining is solving a mathematical problem (a sum, for example) using computer equipment. These computers launch a series of possible solutions until one of them matches the hash value of the block. When a block that holds the transaction input is verified, the miner receives a reward in the form of new cryptocurrencies introduced to the market.

Mining crypto requires high computational power and can be expensive. Anyone keen to mine bitcoin, ether, or dogecoin needs to set up a suitable location to mine, as mining rigs — besides being expensive — should be placed in the lowest temperature possible.

Yield Farming Staking

Yield farming and staking are two popular ways of making money with DeFi tokens.

Yield farming refers to liquidity mining, which means staking and lending cryptocurrencies to generate high returns in the form of other cryptos. We can trace this practice back to Compound protocol when they incentivized users to borrow and deposit more tokens to boost liquidity on its network and reward them with COMP, the protocol’s native token. This is one of the most common ways to pull liquidity into pools.

As a farmer, you want to line up several DeFi protocols and deposit your tokens in the platform, which are locked in a liquidity pool. Borrowers will use these tokens and pay interest on that loan. This practice is an excellent way to make a passive income with a myriad of cryptocurrencies, such as ETH, LINK, BTC, etc. Compound and Yearn DAI vault are two of the most popular yield platforms in the market right now, with yields up to 11%-12% and 12%-13% yearly, respectively.

Working for Crypto Companies

Crypto-enthusiasts have more opportunities to work in crypto companies than they did two or three years ago —all thanks to the expansion of the crypto market to the mainstream media and financial institutions worldwide.

Crypto companies can vary. You can apply to crypto exchanges, outlets, educational sites, DeFi protocols, and more as a software developer, writer, contributor, product manager, etc.

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