8 Ways to Make Money With Crypto & 4 That Aren't Worth It
While there’s plenty of ways to make money with cryptocurrency most are not worth your time, or anyone’s time for that matter – gone are the days of receiving 0.2btc for visiting a bitcoin faucet and clicking a button every 5 minutes. Below we’ll cover 8 of the ways we personally use to make thousands of dollars a month in passive income from cryptocurrency, and 4 ways we see many people recommend that we would say are absolutely not worth the risks and time commitment they entail.
Keep in mind while the below-mentioned methods are great to do on the side, ultimately working a ‘real job’ some extra hours and investing those funds are likely to have a bigger impact than doing the below methods unless you have many thousands of dollars to invest in cryptocurrency money-making.
If you only have a few hundred dollars or nothing you’d likely be better off making money through play to earn crypto games, as many of them you can start playing with absolutely no money or just a hundred dollars, and begin making hundreds to even around a thousand dollars a month in just a few months of learning the game(s) and how to play them efficiently.
However if you have a real job, or substantial assets/wealth, then there’s better options than crypto gaming that we’ll cover below.
Table of Contents
8 Ways to Make Money with Crypto:
There’s lots of ways to make money with cryptocurrency, but most of them aren’t worth to time and effort they take — below we’ll cover the ones we personally use to make thousands of dollars a month in passive income from cryptocurrency.
#1. Lending Cryptocurrency
This is without a doubt the best way to make money with cryptocurrency if you have a decent amount of capital/money invested — as all you have to do is deposit your cryptocurrency on a platform that allows you to lend it out (or stake it). There’s many good platforms for this — we’d recommend checking out our comparisons of such platforms, such as our guides comparing Blockfi vs Nexo or Hodlnaut vs Celsius as each platform has it’s advantages.
You can expect to make around 5% to 13% per year on your cryptocurrency balance by lending it out or staking it, depending on which cryptocurrency you’re keeping your funds with — sometimes a bit less depending on the crypto-asset you are lending out.
To put this into perspective if you have $5,000 invested you’ll likely make around $300-500~ a year in interest, or about $30-35/mo — which might not sound too good, but in just a year that $5,000 invested may become $100,000 like it would have if you bought bitcoin in march of 2020 and held it until march of 2021. By now you’d be making $6000 -> $10,000 a year in interest, or around $500 -> $850/mo, basically a part-time job.
#2. Staking & Masternodes
While we primarily lend our cryptocurrency out for interest on platforms like Celsius Network as it generally earns higher returns than with staking or running a masternode, we also do staking as well for cryptocurrencies that allow it.
With that being said, we personally stake polkodot, Cardano, Cosmos, and run an ethereum masternode, and likewise with staking you can expect around 5% to 8% or so in returns from staking or setting up a masternode for most cryptocurrencies. For newer projects (with more risk) you may make more, and with Ethereum you may make a bit less, but ultimately staking is nearly risk-free so it’s a great choice if you’re risk-adverse.
#3. Hodling Cryptocurrency
The process of simply buying crypto, holding it in a wallet, and selling it years later for more money than you bought it for is what most people think of making money with cryptocurrency.
Obviously it’s a good method as the top cryptocurrencies have fantastic yearly returns, usually between 3x and 20x depending on the year, with no 3-year period ever resulting in negative returns for bitcoin for example — but it’s an obvious one we all know, but hey I’m including it anyway.
#4. Signup Bonuses
Collecting sign-up bonuses and offers is another fantastic way to make money with crypto, especially if you don’t have lots of cryptocurrency yourself — generally all they require is you to sign up, complete the KYC information, then buy/sell/trade/deposit a few hundred dollars worth of cryptocurrency and you’ll recieve $20 -> $50 of cryptocurrency, and if you have a few thousand dollars to play with you may be able to even make a few hundred dollars in sign-up bonus offers from specific platforms.
The ones we’d recommend collecting as they’re offered by trustworthy companies and have personally worked for us will be listed below. There’s others you we’ll name after the recommendations that you can do if you want, but ultimately we wouldn’t bother with them because the bonus is either too small or we don’t trust the platform.
– Lolli Crypto (Cash-Back Rewards) – Simply use the platform to buy from big-name retailers such as Amazon and cash out a free cashback bonus in bitcoin worth around 10 USD at the time of reward (read more here)
Those are the ones we think are worth your time, but if you are greedy you can also sign up to purse crypto cashback as well and get like $10, or gemini and get about $10, and most other exchanges/crypto-platforms offer some sort of bonus, but really it’s not worth all the effort for $10 usually if you aren’t going to actually use the platforms (like we do with the above-listed platforms).
#5. Mine Cryptocurrency
I’ll be blunt with this section — it’s a good option if you aren’t a fan of lending crypto out, as generally mining nets you about the same amount of crypto in the end as simply buying at today’s price and lending it out. It’s a lot of work running a mining rig, setting it up, and generally getting a machine that actually is profitable is hard as mining companies buy all the new highly profitable machines immediately when they first come out, leaving nothing for average consumers to buy and mine at home with.
As a result if you’re going with the mining route as a way to make money through cryptocurrency we’d say it’s best to just go with a mining provider — you can do this by buying hashing/mining power through a company such as hashiny or nicehash and simply waiting for your rewards to come in.
Really you should probably skip this method unless you’re in a high tax bracket, as the benefit of mining crypto is you can apply huge tax writeoffs upfront in some cases (speak to a tax professional related to crypto to get specifics) which can save you thousands in taxes. Without doing this it’s simpler and easier to just buy & stake/lend out crypto.
#6. Earn Crypto Cash-Back
This is possibly one of the best for some people, particularly those who like shopping online at places like Amazon, or buying clothing/electronics online rather than in person, as you can earn bitcoin cash-back on all those purchases, usually around 5-10%.
Again, it doesn’t sound like much, but as we discussed in our review of Lolli, we earned $500 in rewards back using Lolli in 2 years of our regular shopping habbits — however because we earned in Bitcoin when we cashed it out it was worth over 3x as much, meaning in practice we got 15-30% cashback rather than 5%-10% cashback on purchases.
#7. Swing Trading Cryptocurrencies
Maybe this isn’t right for everyone, as it require some experience with both trading and the markets, but honestly we feel it’s a great option for those looking to make significant money with moderate risk — especially if you don’t get greedy and stick to just trading the biggest coins.
Really we prefer to hodl and lend out our cryptocurrency holdings, but we often will shift our portfolio if our alts have went up relative to bitcoin/ethereum or vice versa, but we don’t swing-trade more than that as we believe in the long-term of cryptocurrency. If you don’t you may prefer to swing-trade in and out of USD rather than BTC/ETH, and buy when there’s ‘blood in the streets’ and sell when everyone is euophoric, but it requires lots of mental strength to handle your feelings and sticking to your trading convictions.
Keep in mind this isn’t really worth it unless you have thousands of dollars to invest in swing-trades over many weeks.
#8. Get a Crypto Credit/Debit Card & Use it For Everyday Expenses
We saved the best for last — most people quite frankly don’t have lots of money to invest, however they have thousands of dollars in monthly expenses, and if they get a crypto credit/debit card, such as the one BlockFi offers, they can earn 1.5% -> 5% cashback in bitcoin on everything they pay for, which for most people will amount to an extra $20 -> $60 in bitcoin every month for free.
Again, like most other methods we’ve recommended it doesn’t sound like much. But if you did that the last 2 years you’d have accumulated around $12,000 in free bitcoin due to the price-appreciation it’s experienced combined with you DCAing during the dips in the last year.
That’s HUGE money for most people, and while not quite life changing it’s something that’ll significantly make life easier, maybe paying off a car loan, or providing you with a downpayment for an apartment or home.
4 Methods That Don't Really Work (Avoid these!)
There’s many ways to make money with cryptocurrencies, but we’d avoid these at all costs — this is because they either never earn a significant amount of money, or they have very very high risks that just aren’t worth the potential reward.
#1. Crypto Arbitrage
Arbitrage is essentially essentially buying cryptocurrency on one exchange and selling it on another exchange for a higher price — if you’re buying it on the cheaper exchange and selling it on the more expensive one you can make money this way.
While there are sometimes opportunities for arbitrage, the payouts are incredibly small most of the time so we personally wouldn’t bother with them as they’re not worth your time. There’s market-makers and bots constantly arbitraging with millions of dollars of capital, automatically, seemlessly, so truthfully you won’t be able to make real money doing it.
I’m not saying this to poo on your parade, but to be real with you and save you time — I made thousands of dollars arbitraging crypto in 2017 and before, but those days are over and the market is now very efficient and you won’t make real money trying to arbitrage between exchanges.
#2. Using Multi-Collateral Defi Pools (Uniswap, etc)
This is extremely dangerous to do espeically if you do it with a platform token such as pancake swaps CAKE token — while it may offer in some cases very high yields those yields generally come with extreme risks, meaning you could potentially lose all your money if things go wrong, and that could not just be from a hack, but simply because the platforms popularly fades.
A perfect example of this is what happened with Pancake Swap actually — the native CAKE token fell by approximately 50% in just a couple months relative to eth. This effetively made people using Pancake Swaps ETH-CAKE pool to lose around 30-40% of their portfolio’s value for a nominal (few percent more in yield) increase over lending platforms such as Celsius Network which do not have these risks.
#3. Day Trading & Leveraged Trading
While we think some people can benefit from swing-trading and trading on a longer time-frame people try to get rich quick by doing day trading — and it’s certainly possible, but it’s not probable. Most people will just lose money.
But that’s not why we’re saying we don’t do it and wouldn’t recommend it to anyone — instead we’re sayign this because daytrading is extremely stressful and time consuming. Unless you’re a pro with hundreds of thousands of dollars to trade with daytrading is simply not worth the time it takes. You’d be better off working a job than making money with daytrading.
#4. Bitcoin Faucets / Free Bitcoin Offerings
These have always been horrible wastes of time, and today they’re worse than ever — there’s only one I’d say may be worth some peoples time and that’s Cointiply, as they have a scheme where if you do it every day the rewards will continue to double, meaning if you manage to do it for like a year straight you might make OK money doing it.
But generally you’ll make more money from doing just about anything else, so we’d say it’s not worth the bother of doing it.
Final Thoughts & Conclusions:
As you may have noticed, most of the ways we’ve recommended to make money with cryptocurrencies involve having money/capital to invest — that’s because ultimately it generally takes money to make money.
There are exceptions of course that don’t require you to have a sizeable amount of money already (or any really), namely bitcoin cash back apps like Lolli and crypto credit/debit cards like BlockFi offers, but they won’t make quite as much, and won’t provide reoccuring passive income.
If you have any questions about another method we didn’t cover above feel free to contact us through our contact page and we can give you our thoughts on it — or explain the ones we mentioned above to you if you have any questions about them.
Making Money With Crypto FAQ's:
Below we’ll cover some of the questions we’ve been asked about making money with cryptocurrency, such as different methods we didn’t specifically talk about in the main article above. Feel free to of course contact us through our contact page if you have any other questions and we’ll try our best to answer them ASAP.
Can you make money with Cryptokitties?
While you technically can, as you can with any NFT project if you buy it and find another buyer who’s willing to pay more than you paid for it, but it’s insanely risky and illiquid, and there’s better NFT projects to invest in than Cryptokitties in our opinion.
Can You Make Money with Crypto Trading Bots?
While you Technically can, as some bots will provide a profit short-term, generally bots don’t outperform the market long-term, not to mention they often are ‘rug-pull’ scams where they maliciously attack the users after many months of operating normally to, for example, crash the price of a specific cryptocurrency using users accounts and funds.
Overall it’s very risky and the rewards aren’t much higher than just buying and holding, especially if you stake/lend out the crypto you buy and hold.
Is it easy to make money with cryptocurrency?
We’d say it absolutely is — as we covered above there’s plenty of ways that are low-risk or no-risk to make money with cryptocurrency — but the big question is if it’s worth your time. We explain this in more detail above, but in short:
If you don’t have an amount of money already you’re willing to invest in cryptocurrencies, say $5k or $10k, then you can’t really get rich from crypto by simply investing in it — however with patience you can accumulate bits of crypto using bitcoin-back platforms and crypto-cards that we discussed before, which can net the average person $50 at least a month in crypto rewards, which in time will likely grow to be worth much more.