The question "how to make money with bitcoin" has awakened an acute interest of forex traders. Usually the answer is associated with the purchase / sale of cryptocurrencies directly on the exchange. This is not the only way to make profit, however. You can get BTC by doing freelance work paid in bitcoins or selling goods with the same condition. One goal is to fill your own wallet with as many digital coins as possible.
Virtually any earnings from cryptocurrency are based on the assumption that the upward trend of BTC price will be prolonged. If this is realized, then bitcoin savings are a justified investment. If their price starts to fall, it will be more profitable to trade on the crypto exchange, getting profit on both the growth and the fall in the exchange rate.
Common ways to get Bitcoin:
- Sale of goods / services for cryptocurrency through the payment system connected to the site or by direct transfer to the seller’s wallet;
- Mining using your own equipment by connecting to the pool of miners or renting a remote server;
- Exchange trading with a pair of BTC/USD (similar to working with currency pairs like EUR/USD);
- Cross-exchange trading with buying Bitcoins on one exchange and selling to another, where they offer a more favorable rate;
- Buying cryptocurrency through exchange sites.
There are also other, quite non-standard options, such as bitcoin faucets and gambling. They allow you to receive digital money "just like that." Compared with them, earning on the cryptocurrency exchange is a big and difficult job. These tools of making profit can be used in any combination, depending on the amount of free cash you have at your disposal.
How to make money trading Bitcoin
If you chose exchange trading, start your work by installing the MetaTrader 4 terminal or its equivalent. Before making a real deposit, you should learn through a demo account. Use it to test various indicators, automated advisors, manual trading strategies and as soon as you start making profits, go for real money.
The basic rules of trading on the stock exchange:
- Choose a reliable company – check reviews available on the Internet, check how sophisticated the site is (if there is a thematic forum, the functionality of your personal account, etc.);
- Choose a currency pair – the most common version is BTCUSD, some exchanges offer pairs like BTC/ETH and other.
- Study the current market – here you can use technical analysis of the chart in MetaTrader 4 or in its online version (you can pick up news sites that publish information about the cryptocurrency market, events in the world regarding Bitcoins).
Typical work on the cryptocurrency exchange is all about constrant monitoring the charts and identifying the tendency for a change in trend. Do not try “to jump on board the departing train”; it is more profitable to wait for the correction or to continuation of growth / decline of price. Then the trade will become profitable. To diversify risks, you can create accounts on several exchanges. This will eliminate the likelihood of losing a deposit due to the bad faith of any company (non-trading risks).
Profitable investment in cryptocurrency
If trading on exchange is not your piece of pie, or you find it too time consuming, you can restrict yourself to buying bitcoins. How much can you earn on cryptocurrency in this way – find out through the news. The owners of modest accounts for a few days were able to become rich people (in terms of rubles / dollars). And nothing was done for this, except for the purchase of coins.
In Bitcoins, you can store savings, exchange for them the profit from trading real currency and valuable metals / stocks. Sometime persons combine trading with the subsequent exchange of profit for digital coins. Then it is not so important for the investor where to earn cryptocurrency – the wallet is replenished from several sources.
Short-term and long-term strategies
The history of the Bitcoin exchange rate suggests that investing in this type of cryptocurrency long term may be profitable. On the one hand, it is impossible to reliably say that the price of Bitcoin will increase significantly. Any cryptocurrency is attributed to high-risk assets and their cost can drop as sharply as it went up.
On the other hand, the bitcoin mining system itself supports the formal price increase with each newly created coin. The fewer BTCs there is left to be mined, the higher the competition in the market, which spurs buyers and maintains the upward trend of the price. If a newcomer to the cryptocurrency exchange more often chooses intraday trading, trying to take profit "here and now", an experienced trader includes long-term strategies in the investment portfolio.
Typical BTC trading strategies are divided into the following categories:
- Scalping – allows for a short period of time to get a big profit, but with the condition of increased risks;
- Trend strategies – usually refer to the medium-term and long-term, when the transaction remains open from several days to a month or more
Level breakout strategies – they take into account the high volatility of Bitcoin, which is why almost any breakdown of support / resistance is accompanied by price movement with a “scale” that allows you to make good money.
The higher the selected term of the trade, the greater the profit and the risk of receiving losses. One of the advantages of the long-term strategy is a small loss of time on the trade itself. The trader does not have to sit at the computer every day, it’s enough to look at the rate once or twice a day, adjust the deals (open additional orders, partially close them, move stop orders, etc.).
Arbitrage Method for Profiting from Bitcoins
If the trader likes active work more, the arbitration system will suit him. It is based on the difference in exchange rates. Periodically, there may be situations when it is more profitable not to trade within the same company, but to buy / sell, and very quickly, while the Bitcoin rate is at a favorable level. This procedure is often automated, then you can not particularly understand how to earn on the cryptocurrency exchange. It is enough to install the robot and do other things in anticipation of profit.
Bots allow you to be in the market day and night and do not require any skills in currency trading. All they demand is a stable internet connection. For this purpose, you can rent a server remotely and run the software there. If everything is configured correctly, it will only remain to periodically withdraw profits.
Bitcoin faucets as a way to make money
The popularity of bitcoins led to emergence of websites for cryptocurrency earnings through visiting online resources with advertising. At first, their mission was to attract the maximum number of users to the Bitcoin network. Gradually, such resources turned into platforms for advertisers. The traffic on them is ensured by a huge interest in cryptocurrency in general and especially in Bitcoins.
The advantages of this method of earnings:
- There are no upfront investments;
- The only need you need to start is a bitcoin wallet;
- The method and time of receipt of coins are chosen independently.
A huge choice of faucets allows you to earn initial capital for future crypto investments. There is a drawback, as this method is suitable only for those who have plenty of free time. Time is the major this that has to has to be “invested”, because the account is replenished relatively slowly (on Bitcoin cranes they distribute satoshi, and not whole coins).
Sale of goods for Bitcoin
If there is a desire to expand the investment portfolio, many people think about where to earn cryptocurrency, except exchanges and faucets. Another option is creating an Internet site for the sale of goods or services, equipping it with a software module that accepts payment at BTC (including its parts). When choosing this method is recommended to take into account the high cost of Bitcoin. Products sold must have an appropriate price.
Typical products that can now be bought for Bitcoin:
- Hotel room;
- Flight ticket;
- VPN service;
You can buy goods for your online shop by paying Bitcoins to the supplier (earning your first capital using faucets). Cryptocurrency allows you to climb up with almost no initial investment. The only condition is that a person must have time, patience and the desire to earn.
Author: Kate Solano, Forex-Ratings.com