While the crypto market has taken a beating in 2022, the asset class remains one of interest to investors. Bitcoin has a tendency to bounce back, and with more governments becoming more accepting of crypto, it still holds some potential as an investment.
This guide will serve to illustrate how to make money with bitcoin in 2022. We list 9 different ways you can do this, and they cover a wide range of ideas. But before we get into that, let’s look at what bitcoin is briefly.
In this guide:
Bitcoin — brief overview
Bitcoin is the largest cryptocurrency. Its 13 years has been marked by enormous cycles of volatility. Venture capital firms and investors around the globe have started paying attention to the importance and other potentials of cryptocurrency. Bitcoin continues to increase at a swift pace as many people are becoming investors, including major entities.
The price undoubtedly proves that investing in bitcoin can potentially be worth it, which begs the question, how can you be part of the movement? Getting involved in bitcoin for the average Joe can be as simple as buying and holding. However, there are several other ways to make money with bitcoin. We list a few below.
Proven methods to make money with bitcoin
There are several opportunities to make money with bitcoin. Whether you hold BTC or not, you can still make money with it. If you hold bitcoin, you can decide to trade, passively earn interest or perform some tasks to rack up BTC. Let’s explore each of these options.
1. Trading bitcoin
“Buy low, sell high, and do that many times.“ If this describes you, you fit the bill of a trader. Bitcoin trading is the opposite of the traditional buy-and-hodl method.
Trading bitcoin essentially involves taking advantage of the extreme volatility nature of the crypto market. The concept revolves around speculating the direction of bitcoin and other cryptocurrencies.
Here are some trading methods you can use to profit with bitcoin:
Day trading
Day trading is one of the most popular and lucrative ways to make money with bitcoin. It offers short-term ways to make money. Rather than buying and holding coins for the long term, you can actually make profits from the market within short periods.
Day trading essentially involves entering and exiting the crypto market in a single day. It’s also called intraday trading. This aims to constantly make little profits from the highly volatile crypto market. The exciting part of day trading is that you can make money even when the market fluctuations are unstable, as you can speculate on either upward or downward movement.
Swing trading
Swing trading involves a trading strategy where investors hold positions for a short to medium time frame. The concept behind this is that the crypto market moves in waves. Prices will go up for some time and then trend down for another period of time. This is an excellent way for traders to take profits from these “swings.” A swing trader seeks to leverage these waves of price fluctuations.
Arbitrage
Arbitrage involves concurrent buying and selling of the same or similar crypto asset in two different exchanges for advantageously different prices. This is a great way to profit from crypto and make money with bitcoin.
2. Buy and hodl
The buy-and-hodl method is the easiest and the most friendly way of making money with crypto. The joy of “buying the dip” and then opening your wallet the following day, week, or month and seeing a massive increase in your holdings is second to none. This method doesn’t require any technical or analytical skills. You can simply just decide to buy when the price is down and then sell when the price is up.
As much as this investment strategy requires little to no effort, it’s important to buy and hodl more stable and volatile assets. Cryptocurrencies like bitcoin and ethereum are large-cap assets with high liquidity. Therefore, they maintain regular price movements and can be considered safe investments. Additionally, you can minimize risks by employing a strategy called dollar-cost averaging. It allows you to invest your money over a predetermined period of time in little amounts, rather than disbursing the entire amount at once.
3. Earn interest with your bitcoin holding
As much as holding bitcoin might give you an edge to buy many other altcoins, it gets boring as you cannot earn interest with it, unlike other large cap coins such as ethereum. The most popular means of earning rewards on your bitcoin holdings is by opening a savings account with a reputable crypto savings platform.
Alternatively, you can tokenize your bitcoin to have a first-class experience in exploring the DeFi world. Thanks to tokenization, Wrapped BTC (WBTC) has emerged as a leading tokenized bitcoin asset, racking up about $5 billion in market capitalization.
Ultimately, WBTC is an ERC-20 token hosted on the Ethereum network, pegged to the price of bitcoin. You can use it with Ethereum’s smart contracts and earn interest on WBTC without any custodian party controlling your funds.
4. Bitcoin lending
This is pretty similar to staking. Bitcoin lending involves investors lending their cryptocurrency to borrowers to earn interest. Similar to mortgage loans or any other traditional loan, by pledging your crypto assets as collateral, you can obtain a loan and pay it off over time. The same principle applies to lenders. You can earn money by giving out loans to borrowers.
You can borrow and lend your tokenized bitcoin or open a crypto savings account via Aave, BlockFi, Compound, MakerDAO, Binance, etc.
However, it’s important to note that certain risks come with bitcoin lending. Before you engage in it, you must understand the risks, especially the end result of seeing the value of your cryptocurrency drop rapidly. Other risks include smart contracts, network, liquidation, and standard investment risk.
So if you’re looking to lend your bitcoin, ensure you weigh both the benefits and risks.
5. Yield farming
Yield farming is when you lend your crypto assets on a platform, for which you earn interest in the form of a token. This is a popular strategy in DeFi, and in the case of BTC, you will first have to convert the token into WBTC.
Most popular yield farming platforms — like Balancer, Compound — have a WBTC pair, and the yields will vary depending on market conditions. Look up these platforms and choose a pool of your liking.
6. Staking
Not all cryptocurrencies can be staked. Making money through this means is only reserved for cryptocurrencies that use the “proof-of-stake” consensus mechanism. Bitcoin is one of those that can’t be staked, as it is a proof-of-work-based network.
However, WBTC can be staked, so you can convert your BTC to WBTC and stake it on several platforms. The earnings will vary wildly depending on market conditions. Most platforms — like Binance — offer WBTC staking, so pick one of your liking after a quick online search.
Make money in bitcoin without owning BTC
The aforementioned points are different ways you can use to make money with your bitcoin holding. How about the idea of making money in bitcoin without owning BTC? Sounds good?
The methods listed below will help you to make bitcoin, and you don’t need to own BTC to make money. Let’s explore:
7. Play-to-earn games
Since crypto is already cutting across and disrupting various industries, users are beginning to earn money in several unique ways. Gaming is one of the interesting industries allowing users to earn money. You can earn crypto assets by sitting in the corner of your room and playing crypto games. Sounds interesting, right? Let’s explore what this is all about.
Play-to-earn (or P2E) crypto games involve earning cryptocurrencies by playing games. Typically, it involves exploring the virtual world, building a deck of cards, earning in-game currency by finishing quests, and completing other kinds of challenges. Usually, you can exchange these in-game currencies for popular crypto-assets like bitcoin, ethereum, etc.
You can then transfer the funds realized from these games to a safe and trusted crypto wallet. Some examples of the available play-to-earn games include Axie Infinity, The Sandbox, Alien Worlds, Gods Unchained, etc.
8. Airdrops
In its most basic form, a crypto airdrop is one of the many marketing strategies crypto startups employ to amass followers and build their community. These startups often airdrop (send) tokens to your wallet as part of an initial offering or just as a giveaway for being involved in their project. Different projects offer airdrops for various reasons. The point remains that you can earn free crypto by participating in a project.
So, how do you receive airdrops? You’ll need a crypto wallet where you store bitcoin, ethereum, or any other cryptocurrency. Most projects usually request a crypto wallet address during registration, so ensure you have it ready, and it’s the correct wallet running on the provided blockchain.
Once you have successfully filled in the details and performed all the required tasks, the project will credit you the promised amount to your provided wallet if you’re part of the shortlisted winners.
9. Set up a lightning node
The Lightning Network is a layer 2 protocol (L2) that runs on top of the Bitcoin blockchain. It enables off-chain, energy-efficient, fast transactions through a network of two-directional payment channels called Lightning channels. Like other L2 protocols, the main idea behind this is to take some load off the main chain by processing most transactions off-chain.
You can make money by running Lightning Network nodes and charging fees to validate transactions through your Lightning channels. This earns you small amounts of BTC. For example, a Lightning node might run $5,000 worth of transactions per month and earn a 0.125% fee, thus receiving $12.5 monthly.
Lightning Nodes explore the best-performing path for confirming transactions, so to earn a substantial amount of money, you’ll need to set your own node’s fee and balance it with network efficiency and profitability.
Make money with bitcoin today
It is interesting to see how Bitcoin was launched just 13 years ago, and the whole crypto industry has emerged as the new financial solution offering users several ways to make money. Bitcoin offers different ways to actively and passively make money. And with more crypto projects being launched, we could expect more ways to make money with bitcoin over the coming years.
As you can see, the question of “how to make money with bitcoin” is one that has several answers. There are a wide variety of options at your disposal, giving you a lot of flexibility. This lets you put your idle bitcoin to some actual use. It’s better than letting it sit and do nothing.
To learn more about different ways you can earn in the crypto market, join the BeInCrypto Telegram group. The helpful community members will be eager to tell you all you need to know!
Frequently asked questions
How do bitcoin make money for beginners?
New investors who are new to the whole crypto space can simply buy and keep bitcoins with the hope of accruing profits once it rises.
How do people get rich off bitcoin?
People who get rich off bitcoins are the ones who bought and hodl it at a very early stage. To get rich trading bitcoin means you need to have invested a lot and have solid risk tolerance.
How can I make money with bitcoin?
You can make money with bitcoin through several ways, including buying and hodling, actively trading cryptocurrency, staking, and many more.
How can I earn free bitcoins?
You can receive free bitcoins by participating in airdrops, playing crypto games, etc.
What is the minimum amount to invest in bitcoin?
Depending on the crypto exchange you choose to buy your bitcoin, the minimum amount you can probably buy is as low as $2.
