How to make money with Crypto Assets
You must have heard success stories about people making billions of money within a few years or getting rich overnight by investing in crypto assets at the right time. You must be thinking of getting into the crypto market yourself. Here is a guide on how to make money with crypto assets. Educate yourself through this detailed blog and then start your journey into the exciting world of crypto assets.
How does crypto assets work?
We are going to discuss how does crypto assets work. If you want to know what are crypto assets and the types of crypto assets in the market please read our blog.
Cryptoassets operate on Blockchain. It is a distributed public ledger where records of all the transactions are maintained. Because of its working, the same coin is never used twice.
After the initial launch of crypto assets, new units of them are created through Mining. The maximum number of coins are capped and the figure is declared in the initial offering. The process of mining or creating new coins involves solving complex puzzles to decide the legitimacy of a transaction.
In some places, people can pay for their purchases with cryptocurrency while the rest of the investors use them like stocks. When the value increases investors sell-off and when the price dips they again buy-in.
Some of the key participants in crypto assets
- Exchange
- Investors
- Miners
- Payment Platforms
- Technical Applications such as Wallets
How to make money with crypto assets
Some of the strategies involved in making money with crypto assets are – Investing, Trading, Mining, Lending/Borrowing, and Airdrops
Some outlines to understand crypto-assets market
- Investing and Storing crypto assets in a wallet
- Trading crypto assets on exchanges
- Placing crypto assets in a savings protocol that pays you interest as a bank pays
- Investing in companies that have crypto assets in their balance sheets
- Mining
- Airdrops
We will discuss each in detail –
Investing and Storing Cryptoassets in a Wallet
One can directly buy crypto assets through exchanges by paying fiat money. You can hold these crypto-assets in wallets for an increase in their value. Wallets are digital applications that are crucial to your investment in crypto assets. Cryptoassets are digital tokens/coins so you would need an online space to store your digital assets.
There are two types of wallets –
Hot Wallets – these are software wallets and are easy to recover if you forget the login details or lose your phone
Cold Wallets – these are hardware wallets such as flash drive type devices and are very difficult to recover when lost
Trading crypto assets on exchanges –
There are more than 500 exchanges available worldwide. These exchanges give you the facility to trade, swap, buy or sell crypto assets. They allow cryptocurrency withdrawal also. You can convert digital assets balance into anonymous prepaid cards and use it to withdraw funds from ATMs.
For short-term trading strategy, read our blog on the Best crypto asset to Invest in 2022 for short-term investments
Placing crypto assets in a savings protocol that pays you interest as the bank pays (Lending/Borrowing)
These savings protocols are based on Blockchain such as Terra and provide investors with yield. The lenders can deposit their stable coins on the platform and earn interest. The borrowers have to provide stake -able assets as collateral.
Investing in companies that have crypto assets in their balance sheets
As of now, funds are investing in companies that are directly or indirectly involved with crypto assets. The best way to invest indirectly is through ETFs. Dividends are also another method to make money with crypto assets.
Mining –
Miners receive incentives to assist in the process of mining. This whole operation keeps the transactions transparent and trustworthy. Mining is the safest way to make money with crypto assets because as a Miner, you are rewarded with crypto tokens. Earning crypto assets without investment attracts the large number of people thus making the transactions easier and safer too. However you need technical know-how, GPU and application-specific integrated circuit (ASIC) to set up a mining rig.
Airdrops –
Airdrop is the distribution of crypto assets usually for free. It is a marketing strategy to gain public attention and create a huge user base. The tokens are delivered to the wallets of users or brokers. The aim is to promote new crypto assets and get more people involved in the Initial Coin Offering. Airdrops are the easiest way to make money with crypto assets.
Conclusion
It is essential to research and gain knowledge before investing in crypto assets. You should understand the ups and downs of the market, stay abreast of the current news and have your wallet ready before getting in the crypto market.
Hope this article would clear your confusion on how to make money with crypto assets. Make your strategies, prioritize different asset classes and decide on the amount to invest. Remember to watch out the past and present performance of a crypto asset before trading it.
