How to Make a Profit by Trading Cryptocurrency

Active Methods of Making Money with Cryptocurrency

These are the methods that help generate wealth with cryptocurrencies in an active mode. As soon as you begin the investment, you may start accumulating pro

Method 1: Participating in Presales

Presales of new crypto projects and dApps provide investors early access to tokens at discounted prices. These presale events mostly occur before the public token launch of the project, thus offering early access for the investors. 

Furthermore, the cryptocurrencies available in presales are often listed at discounted prices. This allows the investors to invest in promising projects at a lower cost. However, presale tokens may also carry certain risks. This may include project failure or token depreciation. Some of the best crypto presales are happening now and you many not want to miss out on the next one! 

Method 2: Trading

Crypto trading is one of the most popular ways to make a quick profit. In this method of making a quick buck, investors basically buy cryptocurrencies at a lower price and then sell later on, usually the same day, at a price higher than the buying price, thus making a profit. 

Some common crypto trading strategies include the following:

• Day trading
• Futures trading
• Long-term investing
• Bot trading

Crypto trading involves risks linked to trading. Investors, therefore, must carefully study the market trends and learn about chart patterns and other aspects of trading before flirting with the idea of making money via crypto trading. 

Method 3: Leveraged Trading

Leverage trading is preferred by high-risk investors. It involves a unique strategy where the investors can increase the size of their position by borrowing funds. And this can be either directly from the exchange or a broker.

As position size increases, the profits or losses increase too. Thus, it is advised to be cautious. Furthermore, one must also implement risk management strategies for best results.

Method 4: Arbitrage

There often exist some price differences for the same assets in different exchange platforms. Arbitrage involves making profits from these differences. It requires constant monitoring of market conditions. Furthermore, quick execution is essential to enhance profits. 

To make arbitrage easier, one may also use arbitrage trading bots. They help identify these differences and make profit from them.

Passive Methods of Making Money with Cryptocurrency

In these methods, you do not need to be regularly tracking your moves. Once made the required action, you can just sit back and relax while the crypto continues generating passively for you.

Method 1: Staking

Staking involves holding crypto in a wallet or pool for some fixed terms. Staking crypto is widely popular in the crypto investment categories. The process enables the working of Proof of Stake blockchain networks. And in return, the stakers earn rewards. 

Furthermore, the staking process contributes to network security and consensus. The rewards for staking vary based on factors like the platform used for staking and also the staked crypto network. Last but not least, staking also depends on network participation and staking duration.

Method 2: Yield Farming

Yield farming, which is also known as liquidity mining, is basically providing liquidity to DeFi protocols. On yield farming platforms, the users get a chance to earn fees and token rewards – another attractive method to make passive income from cryptocurrencies.

Method 3: Lending

Crypto lending is similar to normal lending. The only difference is that instead of real money crypto lending involves investors lending their crypto assets to borrowers and charging them an interest for the borrowing period. There are multiple lending platforms to choose from – each has its own set of advantages and disadvantages, which largely depend on options like interest rates and other lending terms. 

Method 4: Staking Pools

Staking pools enable users to stake assets in pools, collectively with others. This increases their chances of earning staking rewards. By joining a staking pool, users earn shared rewards. This also further eliminates the higher risks of solo staking. 

Some staking pools may charge a fee for their services. Additionally, they offer more consistent rewards. This makes them an attractive option for generating income in the crypto industry.