In 2021, Bitcoin (BTC) is set to turn 12 years old—oh, how time flies. We’re sure that everyone here has at least heard of it by now. As our favorite digital currency continues to mature over time, so does its money-making opportunities. More people are figuring out how to make money with Bitcoin, and we understand that it can sometimes get hard to keep up.
To make things a bit easier for you, we’ve compiled a list of 7 ways you can turn 2021 into a Bitcoin-filled year.
No, we’re not talking about heading into a cave with a pickaxe and a hardhat—we’re talking about Bitcoin mining, one of the first ways to ever obtain BTC. This is the process in which miners use powerful computers to solve complex mathematical problems. When they crack the code, they’re rewarded with newly-minted BTC. It’s basically a race to see who can solve the block the fastest and those lucky enough to do so reap the rewards.
Back in the day, mining wasn’t as complicated. Some of the earliest miners were able to mine thousands of BTC using just their home computers. Now, it’s a very different scenario. To mine in today’s BTC scene, you’ll need top-tier equipment—which can set you back a few thousand dollars. Also, since Bitcoin has made a name for itself now, you’ll have a lot of competition.
To give yourself a fighting chance, you can join Bitcoin mining pools or mining clouds. A Bitcoin mining pool is a collaborative group of miners who combine their computing power to solve complex mathematical problems faster. A Bitcoin mining cloud is similar, but instead, they use the cloud to connect their computing power. That way, they won’t have to install and run the hardware and related software directly. In either case, the miners’ fees paid from transactions and the newly-minted coin are split among the people in the group.
As the competition gets fiercer, the better equipment you’ll need to profit. And as you spend more on equipment, your profit margin decreases. As a result, Bitcoin mining isn’t as profitable as it used to be. Do plenty of research before getting into mining because there are plenty of easier ways to earn money with Bitcoin.
2. Buying and holding
Buying and holding Bitcoin is one of the most straightforward and most beginner-friendly trading strategies out there. First, get a Bitcoin wallet, buy BTC, and then hope that the price spikes in the future—no matter how long that may take. It could be weeks, months, or even years before you decide to sell.
The term HODL was coined because of this. It started as a typo on a forum, then it became a full-time trading strategy. It also means to Hold On for Dear Life—so it’s essential to look at how Bitcoin is valued and go from there.
If HODLing is long-term investing, trading Bitcoin is its fast-paced equivalent. Essentially, BTC trading means taking advantage of Bitcoin’s highly volatile nature. This method requires practice and knowledge of the market, so be sure to do your homework before you even think about giving it a shot.
Here are a few styles of trading to get you started:
- Day trading – Day trading entails short and quick trades, allowing opportunities for small and fast profits. Day traders don’t hold any open positions overnight, so the method consists of carefully analyzing the market, seeing small money-making opportunities, and capitalizing for a small profit. At the end of the session, day traders could have a significant cumulative gain.
- Swing trading – If HODLing is long-term and day trading is short-term, swing trading is kind of in the middle. Like HODLers, swing traders will buy low, wait long enough to see their holdings increase in price, and then sell high. However, their holding time isn’t as long as a HODLer and isn’t as short as a day trader.
- Arbitrage – Bitcoin arbitrage is similar to the styles above. However, instead of looking for money-making opportunities within the same exchange, traders who use arbitrage look for those opportunities across different platforms. In essence, they buy BTC from exchange A then sell it at exchange B for a higher price.
All these methods require a lot of practice, so don’t expect to get it right on the first try. Just do your own research, figure out which strategy is best for you, and trust that you’ll be on your own way.
4. Accepting Bitcoin as payment
As it continues to mature, we’re starting to see more and more businesses that accept Bitcoin as payment for their goods and services. So if you’re already running a business, why not consider taking BTC as payment?
It’ll widen your global reach, make payments secure, and speed up the entire payment process. The best part is that it’s incredibly easy to start accepting Bitcoin. If you’re running a physical establishment, it’s a matter of putting up a small sign at your storefront and beside your cash register. If your business is online, you can put a banner on your home page or use a payment intermediary like Coinnest. At those points, customers can just send funds directly to your Bitcoin wallet.
Once you start raking in the BTC payments, you can then use those funds for investment—and who knows? It may just grow in the future.
5. Microjobs and Pay-to-Click (PTC) websites
Several websites will pay you in Bitcoin if you watch an ad or click on a link to a particular page containing ads. Bear in mind, to make any significant money is still very hard work and a tedious task. If you’re immune to that, these sites are an excellent way for you to earn a quick buck. Coinpayu and adBTC are good sites to check out if you’re interested in making money with cryptocurrency.
Similarly, Microworkers and Cloudfactory are sites that pay you a small fee to complete very simple tasks like watching a YouTube video or completing someone’s survey. These sites have Bitcoin counterparts like Bitcoinget and Cointasker, where members can choose thousands of tasks to complete to earn Bitcoin.
6. Lending Bitcoin
The decentralized nature of Bitcoin and other cryptocurrencies makes it simpler to make transactions. This is because you won’t need any authorities to validate it.
Because of this decentralization, you can also loan BTC to potential loanees at an interest rate. Think of it as a way to make your money flow even when you’re HODLing—you’re actually making use of the wealth rather than keeping it unmoved in your wallet.
Unchained Capital, Bitbond, and BTCpop are some of the websites you can use to help you with your lending services.
7. Binary trading
Binary trading has existed in the financial world for a very long time. It was only a matter of time before it made its way into the world of crypto. Binary, as the name suggests, has just two options: a trader purchases an option and an expiration time. The trade is either “in the money” or “out of the money.” Basically, you’re betting on where the price is going.
For example, the price of BTC is 3,000 USD at 10 AM. You can either bet that the price will be more or less than that by 6 PM. If you bet that the price will increase and that happens, you earn the payout of a certain percentage of your investment. However, if it’s lower, you lose the investment. On the other hand, if you bet that the price will go down and it indeed happens, you earn the option’s payout.
Bitcoin is ever-evolving
Now that you have 7 ways to start making money with Bitcoin in 2021 in your arsenal, why not give them a try? Who knows, your efforts could lead to some big profits.
As the crypto economy matures over time, we’re going to see constant development and people will keep finding new ways to make money with Bitcoin. Even beyond this list, there is an endless amount of earning opportunities offered by Paxful and cryptocurrencies. Be sure to do your research and find out what works best for you. Good luck!
Written by: Shola Ayeotan