Disclosure: This post may contain affiliate links. If you click on a link I may make a small commission at no extra cost to you. You can read the full disclosure here.
Last Updated on October 23, 2022 by Chris Panteli
How To Make Money With Bitcoin
Bitcoin billionaires are laughing all the way to the bank. Or should I say crypto wallet?
Thanks to stories of people becoming rich overnight due to the Bitcoin boom, there are millions of people hoping to join them. Of course, most Bitcoin investors don’t make millions of dollars, but you can make a reasonable profit if you are smart.
The big question is how to make money with Bitcoin?
Investing in Bitcoin or any cryptocurrency is super easy thanks to the wide range of platforms out there.
Even someone that knows nothing about Bitcoin can start investing with just a few dollars.
However, there are lots of innovative ways to make money with Bitcoin. Learning these simple strategies will help you earn more from your Bitcoin.
What Is Bitcoin?
Bitcoin or BTC is a cryptocurrency that’s arguably the best known. A cryptocurrency is a decentralized payment method that can be used to make online purchases or as part of an investment portfolio.
When investors are talking about Bitcoin, they may also be talking about other crypto assets. That’s because although lots of other coins exist, Bitcoin has become synonymous with cryptocurrency and the words are often used interchangeably.
Other well-known cryptocurrencies include:
- Ethereum
- XRP
- Tether
- Dogecoin
- Shiba
Although this guide is talking about making money from Bitcoin. You can use the same methods for any cryptocurrency trading.
Because cryptocurrency is decentralized it means banks don’t control this payment method making crypto a truly global payment option.
Crypto works using a process known as a Blockchain. Blockchain technology is a digital record of crypto transactions and checks that the same coin isn’t used twice.
Mining Bitcoin is the process that is used to create new coins. If you allow your computer to be used for mining cryptocurrency, then you can earn Bitcoin for this.
Recommended: 19 Ultimate Ways To Make Money Doing Nothing
Can You Make Money With Bitcoin
Yes! You can make money with Bitcoin. Many people have made millions of dollars trading in Bitcoin and other cryptocurrencies.
Trading in crypto is risky as prices are volatile. Also, regulations aren’t as stringent as other investment options which mean scams are a problem.
The good news is that if you are careful, don’t invest money you can’t afford to lose, and learn fast, then you can make real money trading Bitcoin.
Recommended: 16 Legit Cash App Games That Pay Real Money
How To Make Money With Bitcoin
Making money with Bitcoin is easy once you understand how to do it. These legit ways listed below will help you get started on your Bitcoin money-making journey.
Mining
Mining no longer requires spending 12 hours a day underground. Instead, crypto mining can be done from the comfort of your own home.
To make money from Bitcoin mining, your computer will be used to solve cryptographic puzzles. Solving these puzzles adds new blocks to the Blockchain. As a reward for mining more Bitcoin, you earn some yourself.
Cryptocurrency mining is profitable although not as easy as it once was. Provided you can afford the right equipment, then you can make money mining Bitcoin.
To become a Bitcoin miner, you have two great options.
Personal Bitcoin mining involves using your own hardware to mine Bitcoin. This can bump up your electricity bill so take this into account when calculating possible profits.
Cloud Bitcoin mining allows users to mine crypto without paying for hardware, software, or electricity. You will need to pay a fee to join a cloud mining service which could be a monthly fee or a charge linked to the hash rate.
Hash rate is the measure of your computer’s processing power. The higher your hash rate the more Bitcoin you will earn, but the more you will be charged.
Cloud mining may be preferable for beginners as you don’t have to buy expensive hardware or pay higher electricity bills.
What Hardware Do You Need To Start Crypto Mining?
If you want to start mining Bitcoin, then you will need a computer. The more processing power the computer has the better. You need it to be capable of solving complex mathematical equations quickly.
Ensure you have a decent power supply and cooling system. The computer will be running a lot and you don’t want it overheating. If you can afford all that, then you can start mining crypto.
Investing
Investing in Bitcoin is the same as any other investment. Crypto investors visit a cryptocurrency exchange, buy Bitcoin, and hold it until they can sell it for a profit.
Bitcoin prices fluctuate wildly daily. This means you need patience when investing in Bitcoin. Some days the value may drop dramatically. When that happens you may be tempted to sell, but that would mean potentially losing money in the long term.
Your goal is to hold that Bitcoin until the value rises enough to be profitable to sell. For example, if you bought $1000 worth of Bitcoin in January 2021, that would’ve been worth $1632 in December 2021. A $600 profit for simply waiting until the price goes up.
To get started join a Bitcoin exchange and buy some crypto. Starting small is recommended at first until you gain confidence. You should never invest money you can’t afford to lose, but by investing small amounts regularly you will build up a decent investment portfolio.
Not sure where to start? Coinbase, Binance, and Crypto.com are three excellent sites for beginners to start on. Make sure to check all the conditions thoroughly before deciding where to invest as fees may apply.
Users of Coinbase may be able to earn some free crypto thanks to Coinbase Earn. In exchange for learning more about different cryptocurrencies, you are rewarded with free Bitcoin or other coins. Even if you don’t use this crypto exchange, you could still join to earn rewards.
Recommended: 22 Awesome Things To Buy With 1000 Dollars
Accept Bitcoins As Payment
Many businesses are starting to accept Bitcoin as payment for products and services.
You could too!
If you own a small business, freelance online, or have an online business, then you could start accepting Bitcoin as payment.
Bitcoin payments are fast, secure, and available worldwide. This means your potential customer base could get much bigger which means more profits for you.
Trading
Trading cryptocurrency will require some work. You must be prepared to analyze the market, watch trends, and learn how external factors may impact Bitcoin trading.
If you can do this, then Bitcoin trading can be lucrative. A good trading strategy is also a must.
Here are some Bitcoin trading strategies to consider.
Day Trading
A day trader buys and sells Bitcoin in one single day. To be a successful crypto trader you must be able to analyze data and do it quickly as your goal is to buy and sell that same day.
Day traders will need to keep up to date with the latest crypto news, price action, volumes, patterns, and any other relevant indicators that could influence investment decisions.
Hedging
Hedging involves buying against a position you’ve already purchased. Many traders use this option rather than selling their original Bitcoin investment. By hedging, you are limiting your exposure to risk meaning one investment that is profitable offsets another that is not.
When an investment is looking risky, it’s usually better to sell some or all that investment. However, hedging is one way to avoid that.
Trend Trading
Trend trading is when a crypto trader buys according to the current market position. The basic idea is to buy Bitcoin when the market is rising and sell when the crypto market is going to fall. Trend trading will require a deep understanding of the market and there are lots of complex methods trend traders may use. Make sure to do your research before doing any trading.
HODL
HODL is when you buy and hold Bitcoins for as long as possible. The term HODL began due to a spelling mistake on an early forum talking about Bitcoin. HODL is simply the word HOLD misspelled.
Although some HODL traders now joke it’s an acronym for Holding on for Dear Life.
This type of trading is used for long-term investments and the goal is to hold the Bitcoin until the price rises enough to be worth selling.
Bitcoin Derivatives
Trading in Bitcoin derivatives is when a buyer and seller agree on a future price of the crypto asset. This method of trading is speculative in nature as neither party owns the crypto, but agrees to buy or sell the asset based on the agreed future price.
However, you choose to trade Bitcoin, remember any type of investment carries risk.
Cryptocurrency is notoriously volatile which means prices can change dramatically from one minute to the next. Patience, holding your nerve, and learning all you can about the Bitcoin market will help you be a more successful crypto trader.
Affiliate Marketing
Affiliate marketing is a simple yet effective way to earn Bitcoin.
To get started join a Bitcoin affiliate program. Now promote the company and earn a Bitcoin reward every time your affiliate link is used for purchase.
Promoting crypto using social media, forums, or a blog is the most effective way to share your affiliate links. You can also start your own website to share your affiliate links with a bigger audience.
Start Your Own Blog
It’s a great way to make money online and to win back your financial freedom. It’s not easy, but then again, nothing good in life is! If you put in the work it can be extremely rewarding. So make sure you start your blog the right way, self-hosted, and on Siteground!
If you already have an online following, then why not tap into that and start sharing your affiliate links.
Affiliate marketing is a top way to make money from Bitcoin. You can start immediately, there is no cost to get started, and you can build a passive income.
Staking And Lending
Staking and lending is a method of verifying every crypto transaction.
As the staker you own Bitcoins, but don’t want to spend them. Instead, your coins are kept secure in a crypto wallet.
Your coins are then used by a Proof of Stake network to verify transactions. Essentially you are lending Bitcoin to the network.
In return for Bitcoin lending, you get paid a small amount of Bitcoin for doing this.
The process of staking and crypto lending is important as it allows networks to maintain security and verify transactions.
Airdrops
New cryptocurrencies often use airdrops to boost engagement. Basically, free coins or tokens are given away to get new users interested. These can often be found in Discord groups that new projects have set up to build and foster a community.
Early adopters of the cryptocurrency will get small amounts of Bitcoin or other crypto either for free or in exchange for completing small tasks. The kind of tasks you might be asked to do include signing up to the company’s website, retweeting a post, or following their social media accounts.
All you need is a Bitcoin wallet or other suitable crypto wallet to store your coins.
When searching for Airdrops you may also find Bitcoin faucet opportunities. Bitcoin faucets are websites that offer a small Bitcoin reward for completing a simple online task. Playing games, watching ads, or solving a captcha are some of the tasks Bitcoin faucet sites ask users to complete.
Tips For Investing In Bitcoin Safely
Cryptocurrency investment is booming. Globally the market is expected to be worth a massive $2.73 billion by 2025.
That means two things. You can make money from Bitcoin, potentially a lot of it. It also means you must be careful. Crypto isn’t as tightly regulated (yet) as other industries.
Scammers are always looking for ways to steal money from unsuspecting people and crypto scams are out there. Here are a few top tips to invest safely in Bitcoin.
Choose A Secure Crypto Wallet
When you buy crypto you can store it in a crypto wallet. A crypto wallet is a highly secure digital wallet for storing cryptocurrency.
According to the Federal Trade Commission (FTC), the average loss from crypto scams in 2021 was $1900. That makes it essential to get the best Bitcoin wallet for your needs.
Different wallets have different specs. This means some are better than others depending on the type of trading you’re doing. Research all the options thoroughly to get the best wallet for your needs.
You may want to consider using a cold storage device for your crypto. Cold storage is a device that’s not connected to the internet, like a USB. This makes it harder for hackers to steal your money. Just make sure you don’t forget your password, or you will lose access.
Don’t Invest More Than You Can Afford To Lose
Cryptocurrency is currently decentralized. That means banks, governments, and regulators are not imposing regulations on Bitcoin right now.
The risk is that things could change at any moment. China had a crackdown on crypto in 2021 that resulted in Bitcoin prices dropping. Situations like this could arise at any time and you could lose everything you’ve invested.
Although losing it all may be unlikely, it’s not impossible. That means you should never invest more than you can afford to lose.
Less Legal Protection
Traditional payment methods are protected by the banking system and government. This is known as Fiat currency. The dollar is backed by the U.S government which makes it a Fiat currency. Crypto is not a Fiat currency because it doesn’t have governmental backing.
For example, if you use a credit card and you are a victim of a scam, then you have certain protections you can use to recover your money. Cryptocurrency does not have these protections which means once you’ve sent your Bitcoin, you can’t retrieve it if it’s gone to a scammer.
Bitcoin Scams To Watch Out For
Online scams are everywhere, and everyone must remain vigilant. These are a few common Bitcoin scams to look out for.
Hacking And Fraud
As cryptocurrency becomes more mainstream it’s not a surprise that hacking and fraud attempts are increasing.
Scammers use tricks like sending an unsolicited email offering help to make more money from Bitcoin. All you need to do is send them some of your crypto first. Inevitably, the scammer disappears with your Bitcoin, and you earn nothing.
To avoid scams like this, never send a payment upfront, always use a reputable crypto exchange, and thoroughly research coins yourself before buying.
Initial Coin Offerings (ICOs)
Prior to new crypto being launched, there is often an ICO for investors. This gives crypto investors the early chance to invest in the new coin before it’s publicly available.
Many ICOs are genuine and a good opportunity for investment. The risk is that fake cryptocurrencies also offer ICOs. These fake cryptocurrencies then disappear with your money.
Make sure you do your due diligence before investing in an ICO. Things you can check include the coin’s whitepaper, the founder’s history, and other news online. If you can’t find any of this information, then it’s probably a scam.
Bitcoin Pump And Dump Schemes
Pump and dump scams work like this. A small group of investors pump a lot of money into a coin causing the value to rise. Other investors that are unaware of the scam are convinced to invest on the basis that the value is going up. The original investors then dump their coins before the price crashes.
If you are researching a coin that has suddenly increased in price for no apparent reason, this could be a sign it’s a pump and dump scheme. Always keep in mind that if something seems too good to be true, then it probably is!
FAQs
Who invented Bitcoin?
Bitcoin was the first decentralized digital currency launched in 2009. The true creator(s) has never been revealed. One name that’s synonymous with Bitcoin is Satoshi Nakamoto.
The Bitcoin white paper where it all began was authored using the Pseudonym Satoshi Nakamoto. The person or team of persons that created Bitcoin have never revealed themselves.
Is Bitcoin safe?
Bitcoin is one of the best-known cryptocurrencies. Its popularity means that Bitcoin is considered one of the safest. Due to lack of regulation, investing in Bitcoin comes with risk. Make sure to use a secure crypto exchange and research trades extensively before purchase.
What is a long-term crypto investment?
A long–term investment is usually an investment that is held for one year or more. When choosing a long-term investment, you are going to hold onto crypto that you expect to increase in value over that time period.
What is a short-term crypto investment?
Short-term investments are typically held for less than a year. This means you will be trading often and looking to make a profit fast.
How can I choose between short-term and long-term crypto investments?
To decide which path to follow you need to do a thorough analysis of the market. Only by analyzing all the data of the crypto market can you determine which investment is right for you.
Do I pay taxes on Bitcoin?
Taxes may be due on Bitcoin profits. The IRS currently classes virtual currency as property. Make sure to check with a tax accountant if you’re unsure what to declare.
What is Bitcoin Cash (BCH)?
Bitcoin Cash is an offshoot of Bitcoin and at its core is the same as Bitcoin. The difference is that Bitcoin Cash is faster and cheaper than Bitcoin. That means it’s ideal for smaller transactions like buying a cup of coffee.
What are Bitcoin ATMs?
A Bitcoin ATM is a kiosk that allows users to buy Bitcoin or other cryptocurrencies. You can make purchases using your debit card or cash. It’s also possible to find a Bitcoin ATM that allows you to sell Bitcoin.
