Is it possible to make money with cryptocurrencies?

 Cryptocurrencies are the future, but the period when it was really easy to make money in the virtual asset market is long gone. So it's no surprise that investors and people who "want to be in the know" are keen to learn about the most effective ways to make money on cryptocurrencies. They are characterized by different levels of risk and differ in the amount of potential earnings.

Earning on cryptocurrencies through investing - how much can you earn on cryptocurrencies?

Cryptocurrencies are primarily currencies that (at least in the plans) are expected to become one of the most common means of payment, so the most direct way to earn using them is through stock market speculation (trading), which involves buying cryptocurrencies at a favorable price, and then selling them when the market price is higher. We can invest in virtual assets occasionally, hoping for a "quick" profit, as well as focus on long-term investments that can lead to very high returns over the years. Most investors who have really gotten rich investing in Bitcoin made their first transactions a few years ago, when Bitcoin was much cheaper - for example, in 2013 1 BTC could be bought for about 11$. Today, it is about 50k $

Another way to invest in cryptocurrencies is the so-called day trading. This is sort of the opposite of long-term investing, which involves focusing on making money from small price fluctuations of particular assets. However, such a strategy requires making important decisions on a daily basis and reacting quickly to even the slightest changes in prices. This method usually involves trading on pairs such as BTC/USD, BTC/PLN or BTC against other cryptocurrencies. Day trading is not always the best solution, but in the case of cryptocurrencies it can be the optimal version - all thanks to the fact that cryptocurrency valuations change very often. The downside is the amount of time we need to control the markets and the need to be aware of the expected changes in asset prices. Therefore, it is worth starting investments in such a format only after gaining some experience. Check crypto pinterest board.

Arbitrage

Another way to start making money on cryptocurrencies is the so-called arbitrage. The strategy consists in buying an asset on one market (exchange) and selling it on another market where its price is higher at a given moment. In practice, this is a very simple way (at least in terms of how to make a profit) - imagine that you can buy Bitcoin on one exchange at a price of $10,000, while on another exchange at the same time the selling price is $10,100. How is this even possible? There could be many reasons, but it is usually the result of higher volume and a temporary increase in demand for Bitcoin on one of the exchanges. This way of investing seems like an ideal prospect, but in practice it is not so simple. On the one hand the possible profit is relatively low (differences between exchanges are small), you have to add transaction costs and the fact that you can never be sure if prices on the markets will not suddenly change.

Earning on cryptocurrencies through mining

Next on our list of once incredibly popular ways to make profits on cryptocurrencies is mining, or digging. This is a very important part of the decentralized peer-to-peer network that underlies cryptocurrencies bypassing the central authority responsible for "order" in the market. Mining is the process during which transactions between investors are verified and information is given to the public blockchain registry. In the process of mining, new cryptocurrencies or tokens are also introduced into the supply. Until a few years ago, for a relatively large group of people, cryptocurrency mining was a very convenient way to earn money. Today, however, the situation in the cryptocurrency market is somewhat different, and mining itself involves additional investments. First of all, you need computers with above-average parameters that act as so-called diggers.

From ordinary computers they differ primarily in the graphics card, which must be powerful enough for the device to solve complex mathematical operations. Some altcoin algorithms additionally make it increasingly necessary to use special chips called ASICs for mining, devices that are tailored for mining a specific online investigation. As cryptocurrency mining continues, the complexity of the mathematical tasks also increases. Apart from modern computer equipment, you also need a fast and stable internet connection for mining. Besides, the work of such equipment consumes much more energy than standard computers, so the power cost for one of them is at least several hundred dollars per month.