People enter into the cryptocurrency realm for a variety of reasons, one of which is to make money. They intend to earn by leveraging cryptocurrencies and their many use-cases.

Cryptocurrencies, for example, have a reputation for being some of the most volatile investments available, with a 1000 percent or more return possible overnight. However, investing and waiting for such circumstances isn’t the only, and certainly not the best, method to make money with cryptocurrency.

Today, we’ll look at a few different ways you might use cryptocurrency to supplement your income.

Can you earn money with Cryptocurrencies?

You can definitely make money using cryptocurrency, especially with all of the recent innovations in decentralized finance. All of this goes much beyond simply buying and owning a bitcoin token which nevertheless is still a possibility. Let’s get right in and see how you can make money from cryptocurrencies in 2022.

Ways to make money using crypto.

Based on market capitalization, Bitcoin is the most valuable cryptocurrency token. After all, it was the first cryptocurrency and it truly exposed the world to the concept of cryptocurrency tokens. It spawned a slew of altcoins, and in this post, you’ll learn how to put those digital coins to work for you. That being said, there are a variety of ways to profit from crypto coins, so let’s have a look at seven of them.

1. Staking and Interest accounts

Staking Bitcoin generates significantly more profit than storing it in your cryptocurrency wallet. Staking your cryptocurrency allows you to earn a tiny amount of that currency on top of your existing holdings, with annual interest rates ranging from 5% to 10%. Keep in mind that staking only works for blockchain networks and tokens that use the Proof-of-Stake consensus model, so if you want to start staking and earning interest, you’ll need to trade Bitcoin for another digital asset that employs the Proof-of-Stake consensus model.

2. Mining and Mining Pools

Bitcoin is a Proof-of-Work (PoW) token, which means you may mine it using powerful hardware and electricity, earning newly generated BTC tokens each time you confirm transactions. However, mining Bitcoins alone can be challenging, so you might want to join a Bitcoin mining pool. These pools are networks of dispersed Bitcoin miners who work together to mine blocks and then distribute the Bitcoin based on each entity’s contribution to the pool. 

3. Trading

You are essentially speculating on the changes in the cryptocurrency realm when you engage in crypto trading. This used to include purchasing an asset on an exchange in the hopes of seeing its value grow and then selling it for a profit. However, cryptocurrency traders now employ derivatives to speculate on the asset’s increasing and falling prices in order to benefit from its volatility.  You can trade on cryptocurrency exchange sites like YellowCard and Binance.

4. Affiliate Marketing

Within the cryptocurrency field, there are a variety of affiliate opportunities, and with a little study, you can easily locate the top Bitcoin and Crypto affiliate programs. Many exchanges will often offer significant rewards in their affiliate marketing programs, and they will also use their programs to monetize their content because of their popularity. Many affiliate networks pay a set amount of money for each lead generated through their referral links.

5. Lending, Yield Farming and Liquidity Providing

Just like in the conventional and mainstream market, lending makes big money. It is not possible to drive two kilometers into Kampala without coming across a money lending company or at least a moneylender’s brochure for a “quick and easy loan”. 

Similarly, you can give your “quick and easy crypto loan” for interest on the lending.

Yield Farming is essentially a method in which you stake your cryptocurrencies or give liquidity to a pool where individuals can borrow your tokens and pay you an interest rate in exchange for them. It is similar to earning interest from a bank account; technically lending money to the bank.

Liquidity providing on the other hand is making money from letting traders use your liquidity for other transactions. Your income as the provider consists of in-pool fees which may be about 0.2% on each trade. The final amount made may depend on the volumes traded within the pool.

The annual return from this strategy is in the 15% range each year.

6. Crypto Arbitrage

Crypto arbitrage in simple terms is a means to profit on price differences in a token across several exchanges. This is possible because cryptocurrencies can be priced differently on multiple exchanges, and arbitrageurs can trade between them. However, there are risks involved, such as slippage, price fluctuation, and transfer fees.

7. HODLing

HODling is a cryptocurrency strategy in which you acquire your most favored coin, one you fundamentally believe in, and hold onto it for an extended length of time, despite price swings. This indicates that you are not moving or trading the bitcoin asset for an extended length of time, regardless of where the price fluctuates.

By utilizing the various use-cases for Bitcoin and other cryptocurrency tokens, there are numerous methods to create passive income. We’ve only explored seven options here; keep in mind that you can use your cryptocurrency tokens in a variety of ways. The tokens aren’t just sitting in a cryptocurrency wallet this way; they’re being put to work, and you’re earning actual money.