6 Ways to make money with cryptocurrencies in 2021

Throughout 2020, there was a gradual rise in the price of many cryptocurrencies. By the end of the year, the demand for them increased several times. Assets began to attract not only highly specialized investors but also ordinary individuals and large companies. This article briefly describes how to make money with cryptocurrencies in 2021. Read on to learn about six ways you can do this.

Actually, there are many more strategies for making money on cryptocurrencies than are popularly known. For example, in addition to the strategy of short-term speculation, which is obvious to many, there are many other profitable strategies. Here everyone can find something for themselves.

1. Buy and hold

A strategy that is relevant in the stock market is perfectly justified in the cryptocurrency market. Using the “buy and hold” strategy, investors try to buy for a low price and later sell for a high. To do this, you need to devote time to analyzing the asset and weighing the risks.

In the case of Bitcoin, this strategy is more than justified; especially if the investor is ready to freeze their money for a long time. This digital coin is showing great promise, and even those who bought it in 2017 at its peak can now, three years later, take their profits. Or they can wait a little longer: its growth has, probably, just begun. Yet, this is rather an exception to the rule: buying at such a high price is very risky.

2. Short-term speculation

If you are quite familiar with trading, fundamental and technical analysis concepts, try trading cryptocurrency in short time frames. An individual investment strategy is selected for each of the coins, which also depends on the duration of the transaction, the chosen platform, and the time for analytics.

3. Partnership programs

If you have the skills to produce content, or even better, you own a website, video blog, or popular page on a social network, you can apply to be a partner of a cryptocurrency platform. It can be an exchange, e-wallet, or other services.

On successful application, the partner receives a referral link from the platform which he can distribute in any way. You will receive payments for each client who signed up, made a deposit or performed another targeted action.

You can review the service, write news about it, talk about the benefits, and even just invite your friends. Over time, this can become a good base for the generation of passive income.

5. Arbitration

Cryptocurrency arbitrage is one of the most difficult areas of earning money. One advantage with this method is that it has very low risks: an affiliate purchases or sells the same asset on different platforms, making a profit from the difference in prices set by companies.

But this is not easy: a trader needs to monitor several platforms constantly and react instantly to stay ahead of other arbitrageurs. Sometimes, the opportunity for a good deal lasts only a few minutes. As a rule, profitability from one arbitrage trade is low. To make money, traders must devote a lot of time to their activities and have some good capital.

Arbitrage trading is conventionally divided into several types:

• Exchange – A classic arbitrage of transactions in which two platforms are involved. A trader discovers a profitable difference in prices, buys cryptocurrency on one exchange and immediately sells on another, taking a small profit.
• Triangular – Here, in a triangular pattern of decision making, a trader exchanges one cryptocurrency for the second, the second for the third, and then again for the first taking profit in the process.
• Arbitration on p2p-sites – In this case, the trader notices the difference when paying with different methods or currencies, and makes a deal taking the difference in price.

6. Mining

The mining industry is already quite developed in the world. It is almost impossible to calculate the profit accurately, but it is worth considering the price of the selected cryptocurrency, the cost of electricity, equipment and maintenance, as well as the rental of premises and security (for mining farms).

According to experts, break-even Bitcoin mining in Russia is possible with an asset price of $6,000 and an electricity price of up to 3 rubles. New video cards for mining pay off in about 15 months, and old ones can go into profit only in those periods when the price of Bitcoin is above $15,000.

Operating expenses

When choosing any of the proposed earning strategies, do not forget about expense items that eat up part of the profit:

• Commission for depositing and withdrawing funds in fiat on a cryptocurrency platform.
• Commission charged from each trader’s deal, including on p2p platforms.
• Commission for depositing and withdrawing funds on the exchange in cryptocurrency using your wallet.

Read articles of VipDeposits to learn more about cryptocurrencies and international payment systems!