The Gold Rush era was the ultimate way to turn gold into unprecedented levels of wealth for the average American. Today, the cryptocurrency industry represents the same opportunity: it is more than possible to learn how to make money trading cryptocurrencies with the proper knowledge. The road to making good money with crypto coins starts with understanding how this ecosystem works and, more importantly, how to build profit safely and securely. The inherent volatility of crypto assets is why they’re so profitable: high risk and opportunity often go hand in hand.
Buy and Sell Crypto
What is Cryptocurrency?
Like the Wild West, cryptocurrency (shortened to just “crypto”) is its own world. It’s a digital currency that secures transactions on blockchain technology. Banks? No thanks. Every transaction is recorded between wallets and the public ledger.
As the name suggests, cryptocurrency is backed by encryption to verify transactions. Encryption technology supports every crypto project. While every transaction is indeed logged, encryption is used to ensure that nothing can be modified in transit.
The power of crypto trading is the trust factor: if nothing can be modified, then each transaction can stand the test of time. Cryptocurrency markets exist to leverage both short-term and long-term investment opportunities.
There are literally thousands of different cryptocurrency projects out there, each with varying levels of popularity. Not all crypto coins are valuable: some represent projects with potential, while others represent deeply established projects in the marketplace. The cryptocurrency field is huge, and each coin represents different features the developers wish to focus on in the greater crypto space. While technical skills are required to develop with cryptocurrencies, less technical expertise is needed to become a cryptocurrency investor with easy-to-use crypto platforms such as Nexo.
No guide on crypto would be complete without mentioning Bitcoin, the 500-pound gorilla of the crypto world. Bitcoin is the most commonly traded crypto coin, with a focus on solving the problem of reversible payments. Bitcoin mining is used not just to generate more Bitcoin but also to extend the blockchain itself. Investors look at the massive rise of Bitcoin payments and continue to hold this crypto and add to their holdings as it becomes more mainstream for payments and proof of value. The price of a Bitcoin rose to an all-time high of nearly $68,000 in November of 2021, making it clear that this coin can definitely climb the ranks.
While Bitcoin is well known for being around for a long time compared to other coins, new coins come out every day that challenge Bitcoin based on the weaknesses found by multiple researchers and documented in several white papers.
Behind the explosive NFT (non-fungible token) movement stands Ethereum, a cryptocurrency as versatile as it is popular. Ethereum is traded widely and used not just to purchase NFTs but also to process decentralized finance applications (DeFi). Like Bitcoin, Ethereum’s strength is its immutability: transactions cannot be modified or reversed.
Avalanche is a crypto coin that focuses on being faster than Bitcoin and Ethereum and more suited to the multiverse world. The additional emphasis on eco-friendliness through a change in consensus and proof of stake. Since it is a proof of stake coin, there are multiple reward systems available to traders that want to stake the coin for a long-term investment.
Ripple is a crypto coin that focuses on fast transactions: it does not take much time to send payments (only three seconds), and uses for Ripple include micropayments in metaverse games, DeFi, and NFTs.
How to Make Money with Cryptocurrency
Understanding how the most popular cryptocurrencies are used makes it easier to figure out how to make money with crypto. Use cases for crypto coins grow every day, with new projects coming out that demonstrate that the technology has only begun to scratch the surface of possibilities. Now, there are some more alternative ways to make money with cryptocurrency. Let’s review some of them.
1. Buy, Sell, and Trade
The easiest way to start making money in crypto is to buy, sell, and trade cryptocurrencies. These are completed through crypto exchanges, where millions of new transactions occur every single day. You can purchase, sell or swap any type of crypto specifically allowed on the exchange with the aim to make a profit. Therefore, choosing one with more cryptos available will increase the potential to make money by trading cryptos. For example, the Nexo Exchange has more than 300 crypto pairs to swap, including 140 exotic ones that are difficult to come by.
Buy and Sell Crypto
2. HODL Your Crypto
Once you buy crypto coins, one of the ways to make money from them is just to leave them alone. The concept of letting crypto coins rest in hopes of future profit through a higher price is called HODL, or “hold on for dear life.” There’s no specific period of time you have to hold crypto, and this strategy will depend solely on your decision when to sell or swap your crypto, and there is a risk that the coins your HODL decrease in value instead of increasing.
3. Staking to Earn Interest
In the crypto world, staking is essential: it’s the way that blockchain networks validate all transactions. The blockchain underneath the cryptocurrency of your choice needs staking, but most people do not want to tie up their crypto coins without any incentive. Staking requires either an exchange that allows for staking directly or a crypto wallet, which can be a hardware wallet or a software wallet.
You can earn passive income when you stake specific crypto coins in a platform that offers interest earned on your cryptocurrency. For example, the Nexo platform allows you to securely stake your cryptocurrency while earning interest. The interest you can earn on your crypto will depend on the coin you stake and if you are willing not to un-stake for a fixed period of time. But unlike other platforms, they will pay your interest daily into your account (rather than weekly or monthly) based on your annual compounded interest.
4. Crypto Lending
Who said you couldn’t become a lender? With crypto, you can step into the traditional role banks have held for decades and lend out crypto to other people in exchange for dividends on the funds. Borrowers are asked to put up a percentage of the total loan as a stake to ensure repayment. If the borrower decides not to pay back the loan, the stake can be sold off to recoup losses. However, if you are looking into using your crypto as collateral for a loan, check out the Nexo crypto credit lines that allow you to borrow cash or stable coins against your crypto starting at 0% interest depending on your loyalty tier.
5. Instant Cashback For Purchases or Swap
Fans of passive income will enjoy this tactic: find a platform that gives cash back for each crypto purchase or swap between coins. One of the platforms that offer this feature is Nexo, where you can swap between 300+ market pairs and earn cashback with each trade. You can learn more about this on the Nexo Exchange page on their website.
How to Start Making Money From Your Crypto
The possibilities within the cryptocurrency world would make any Old West gold prospector downright jealous. Yet, for all of these possibilities, it can be challenging to figure out how to jump in and get started. Price swings go beyond what most would expect, but the crypto industry is still worth examining for a closer look, especially given the potential for significant overall profit. After reviewing some ways how you can make money with your crypto, there are only two things left to do:
1. Choosing a Crypto Exchange Platform
As mentioned before, an exchange platform is where you will be able to buy, sell, and trade cryptocurrency. The right exchange will give you access to the most popular cryptocurrency, complete security protection, and the ability to earn interest swapping selected crypto coins. The best cryptocurrency exchanges will also protect you against security breaches that would leave your coins at risk. Other features, like earning interest by staking or borrowing against your cryptos, may also be essential for you, so make sure you review before you buy.
As a robust crypto platform, Nexo allows you in different ways to make money out of your cryptocurrency:
- Stake cryptocurrencies and earn interest. Learn more about this on Nexo’s earn crypto page on their website, including the different interest rates for each coin.
- Earn cashback from swapping crypto pairs. As mentioned before, you can earn cashback rewards when you trade through the Nexo Exchange.
- Get rewards from using your Nexo card. When you make purchases using the Nexo card, you can earn rewards on crypto.
Aside from making money on your crypto, you can also access crypto loans on the platform by using your coins as collateral for the loan. You can read more about how Nexo crypto loans work on the website.
2. Setting Up Your Wallet and Opening Your Account
When it comes to wallets, something user-friendly and secured is fundamental, along with compatibility with the cryptocurrencies you’re most interested in holding. When you open an account with Nexo, you have access to a secured wallet, crypto exchange, and the power to earn interest and get rewards from your crypto and borrow against it. On top of it, they offer military-grade security with up to $375 million in insurance on your custodial assets. With a user-friendly mobile app, you can manage all your digital assets on the go and access all the features from anywhere. You can visit Nexo’s website to learn more about this all-in-one crypto platform.