Chances are you are not making the most out of the crypto ecosystem. There are multiple strategies and products that you can put into use to maximize your gain in the crypto world. In this article, we will talk about the top trending ways to make money in Cryptocurrency 2023.
We will go into the details on each of these with pros and cons, risk levels, and best practices to follow. Our goal is to enable traders to take complete advantage of the crypto ecosystem and keep learning with each passing day.
#1 Investing
The concept of Investing is buying and holding your crypto assets for a long period of time, maybe years in order to gain a huge profit from it. This strategy is clubbed with DCA (Dollar Cost Averaging) where investors systematically buy cryptocurrencies in different intervals to average out the buying price or accumulate more assets. Investing is the most common among the Trending ways to make money in Cryptocurrency 2023.
Pros
- It gives you mental peace as you don’t have to sit or monitor price charts daily. Once an investment is made you are free and you only need to login into the crypto exchange when you want to sell or want to do DCA (Dollar Cost Averaging).
- It’s one of the safest ways of earning profits from crypto. If you do a systematic investment using DCA, you can minimize the risk and bring down the average buying cost of your cryptocurrency further down.
Cons
- The drawback of this type of strategy is you might have to wait for a longer period of time in order to earn a good profit from your investments. The Bear cycles might be longer, in some cases 2–3 years, before the Bulls take control of the market.
#2 Trading
Where Investing requires long-term commitment trading is referred to as finding buying opportunities for a quick profit in a couple of weeks.
The price of a cryptocurrency can fall in a matter of a few minutes to unexpected levels, and traders utilize these buying opportunities for fundamentally strong projects.
Pros
- Can be a regular stream of income if you are focused and good at taking trades at the right moments.
Cons
- Being a trader requires you to have good Fundamental and Technical Analysis skills in the market.
- May require regular monitoring of your portfolio or you can set a selling order at the targetted price as per your analysis. But you cannot completely go off-grid.
#3 Leverage Trading
Leverage Trading is a trading strategy that can give you immense returns but you can also lose your complete cryptocurrency if things don’t go as planned and you are not good at risk management.
Leverage trading is done by borrowing cryptocurrency from the exchange to increase the amount of investment, thus the % gain is made on the total money borrowed & your stake. This increases the profit margin without putting money from your pocket.
Pros
- You can trade in all market types like Bull, Bear, or Sideways. You can earn profits at any time in the market if you can predict the next move and understand the pattern.
- It can become an extra source of income.
- You can make huge profits without actually investing all the money from your pocket. You can borrow money from exchanges(Binance, KuCoin, FTX, ByBit, etc) and bet on the next moves in the market.
Cons
- Leverage Trading can be very dangerous as you risk all your assets and all can be lost in a matter of minutes, given the volatile nature of cryptocurrency.
- You should be an experienced investor with good knowledge of Technical & Fundamental Analysis of cryptocurrencies.
- You will always be checking the price chart while your trade is on, this requires a lot of focus and might deprive you of your family time.
#4 Staking
By Staking, you lock your funds in a cryptocurrency wallet for a fixed duration of time and you earn rewards for the time you stake. Staking is a process used to make the Blockchain secure, each transaction that is submitted to a block is first verified using a Proof of Stake consensus mechanism.
Staking is similar to interests earned in your bank and is proportionate to the amount staked.
Pros
- Staking gives you the capability to earn extra crypto rewards on those cryptocurrencies that are lying idle in your wallet.
- By staking in a pool you are participating to make the blockchain platform more secure.
Cons
- You cannot trade with the cryptocurrency staked, it remains locked during the complete staking period. You need to unstake it before taking a trade.
- It is important to choose a staking pool cautiously as they act as a validator to the Blockchain network. If the validators don’t do their job properly and try to submit a fraudulent transaction to the Blockchain, some amount of the total staked cryptocurrency may be burned as a penalty.
#5 Yield Farming
Yield Farming/ Liquid Farming is a rewarding mechanism similar to staking where investors deposit their coins into a lending protocol through a Decentralized App (DApp). Other investors can then use these cryptocurrencies as liquidity on the lending platform and trade on them.
Pros
- As with Staking, Yield Farming can be one of the best ways to put those cryptocurrencies to earn for you.
- Yield Farming rewards in form of APY(Annual Percentage Yield) which is like earning interest on the number of cryptocurrencies deposited.
Cons
- As in the case of Staking, you cannot take a trade on the cryptocurrencies locked in the platform.
- Some Yield Flatforms might give very high APY (Annual Percentage Yield) in order to attract lenders to their platform. These projects can be very risky and lenders may lose all assets in case of any fraud if the project is bogus.
#6 Airdrop
Airdrop is the process of distributing free cryptocurrency to increase the awareness of a Project. With many people participating in the Airdrop events, the project gets the attention of a larger audience, with whom they can further build trust and form a loyal community.
As a crypto enthusiast, one should always look forward to participating in these airdrop events and never miss those free rewards, who knows if some of them actually skyrocket. It is also one of the Trending ways to make money in Cryptocurrency 2023.
Top 5 Cryptocurrency Airdrop Platform
Pros
- By just investing sometime you can own cryptocurrencies for Free.
Cons
- It requires a lot of time and consistency to keep taking part in Airdrops. As just participating doesn’t guarantee you an allocation, because multiple people taking part in it.
- Even if you are lucky to get those free cryptocurrencies, only a few may rise to the top to give you enough financial gain.
Conclusion
A general population of cryptocurrency traders is unable to completely utilize everything that the cryptocurrency ecosystem has to offer. They are only limited to trading crypto either because it’s trending or it creates a FOMO. Cryptocurrency like any other form of investment has a wide array of tools that can be utilized to maximize your gain on different market cycles and trader sentiments. This article is created to highlight some of the most trending ways to make money in Cryptocurrency 2023.
Note: We don’t recommend any cryptocurrency should be bought, sold, or held by you. This article only highlights the author’s view on mentioned cryptocurrencies. Do conduct your own due diligence and consult your financial advisor before making any investment decisions. You are solely responsible for any financial loss or gain, do your own due diligence. Not a Financial Advice