Despite the recent difficulties, there are still ways for investors to utilize Bitcoin to their advantage.
Making money using Bitcoin (BTC) has gotten more and more challenging. Prices have decreased as a result of the global crypto meltdown. Free Bitcoin promises are frequently false. Since it is now so competitive, bitcoin mining, which was once available to ordinary investors, rarely yields a profit for individuals with small setups.
Bitcoin still allows for the possibility of financial gain, nevertheless. It can be bought, sold, lent, held, or earned. Returns on this volatile asset aren’t assured; while it’s possible to gain from price increases, it’s also possible to lose money if prices decline. However, given Bitcoin’s growth since its introduction, several cryptocurrency investors are optimistic about its future: 1 Bitcoin was worth approximately 9 cents in 2010, and as of this writing, each is valued at about $16,000.
- Holding Bitcoin
Ease of difficulty.
Return: Variable based on investment size and market fluctuations. Bitcoin prices more than doubled during its most recent bull run in 2021.
As long as the price of Bitcoin when you eventually sell it is greater than the price at which you got it, buying and holding it as a long-term investment, or, as some crypto aficionados refer to it, HODLing, can be a low-effort strategy to make money in the long run. It is conceivable that Bitcoin’s price, which has already topped out at $65,000 per coin, could rise to a similar level in the future.
Since its value has risen, many investors have begun to regard Bitcoin as more than just a money that can be used for everyday transactions.
- Borrowing Bitcoin
Medium-level difficulty.
Return of no more than 5% APY.
Each site, however, has lending requirements. For instance, if the borrower you are lending to fails, you could lose some or all of your investment with both Cake DeFi and Gemini Earn, Gemini’s interest-earning scheme.
Additionally a recent industry, crypto financing is fraught with danger and ambiguity. Notably, in 2022, a number of platforms discontinued providing lending services. Gemini informed consumers on November 16, 2022, that they might not be able to withdraw money from Gemini Earn.
- Taking Credit Cards
Medium-level difficulty.
Return: Amount of Bitcoin payments and price change are factors.
Consider allowing customers to pay with Bitcoin if you take payments or tips for side jobs or a business. You can carry out this using websites that offer processing services, such Coinbase or BitPay.
Although the setup is not too difficult, dealing with the tax repercussions and risk of taking Bitcoin payments might be more challenging. The self-managed account for Coinbase can be created right away. Although BitPay takes a few days to approve, it lets you accept a variety of cryptocurrencies.
Remember to select a service that enables you to accept payments in Bitcoin if getting exposure to Bitcoin is your objective. Although BitPay and Coinbase provide.
- Trading Bitcoin Daily
Hard difficulty.
Return: Variable based on investment size, transactions, and price swings.
It is technically conceivable to earn money by buying and selling Bitcoin in small time frames and changing positions in response to market fluctuations. However, the likelihood that you may lose money in this fashion is far higher than it is when day trading stocks.
In order to make educated judgments about which stocks to purchase or sell, stock day traders employ macro- and microeconomic data, historical market trends, and other resources at their disposal. Even so, these aggressive traders find it difficult to match the profits that may be attained by, for example, purchasing and keeping low-cost funds that follow a wide market index.
Investors are much less well-informed about the Before beginning, consult with your accountant to ensure you are aware of what to monitor.
For a trader to be able to benefit from day trading, there must be some volatility; prices must rise or fall.
But since Bitcoin and cryptocurrencies are more volatile than other types of assets, a principle like “buy low and sell high”—which is already quite challenging—becomes even more so.