Blog Borrow How to Make Money with Cryptocurrency in 2021

How to Make Money with Cryptocurrency in 2021

date September 7, 2020 time 5 min read 646 views

Cryptocurrency can be a lucrative investment: It’s flexible, secure, and has high earning potential. By strategically investing your money, your portfolio will grow over time so you can cash out, enjoy your earnings, and make money with cryptocurrency in 2021.

So you bit the bullet and jumped on the crypto train or you’re nearly there. Maybe you’ve got a bit of BTC sitting in your wallet already.

Sure it’s cool being a member of the crypto club, but where is all that money people told you you’d be making.

We’re going to tell you a bit about how you can make money from your cryptocurrencies today.

How to make money from cryptocurrencies in 2021

Just like with traditional investments, there are two strategies you’ll want to consider when investing in crypto: short term and long term.

The one you chose really depends on your appetite for risk and how easily you need access to your crypto. 

The long-term route

Like most investments, crypto is a good asset to buy and hold because of its long term growth potential.

If you want to make the most money on your crypto, a forward-thinking strategy may allow you to make major returns on your investment. That is  if you have the patience to let your money sit for several years. A 5-year hold on Bitcoin is already at over 3,000% and that’s including the 2017 market crash.

The short-term route

You can also choose to trade your crypto short term for faster gain.

To make money through trading, you buy a cryptocurrency and wait for the market price to change in your favor. You can also use financial derivatives to take advantage of crypto market gains. This will help you make money more quickly but is usually a riskier investment strategy.

Now let’s get into specifics.

How to make money with cryptocurrency

Earning money with cryptocurrency can happen in many different ways, including long-term investing or day trading
Earning money with cryptocurrency can happen in many different ways, including long-term investing or day trading (source: images.unsplash.com)

Mining

Investing is a great strategy to passively earn on your crypto. But if you want a more interactive experience, you could try mining crypto.

This method, however, takes a lot of time and resources. Miners need technical know-how and incredible computing power (including expensive equipment) to make money on many blockchains like Bitcoin. Also, there’s also a fair amount of luck involved—which means you aren’t guaranteed to turn a profit.

Staking 

Unlike mining, with proof of stake cryptos, you don’t have to spend money buying an expensive rig. Instead you purchase coins and lock them in a contract on the blockchain to earn steady interest. Sort of like a dividend stock.

Staking uses little resources when compared to mining. This means less electricity consumption and no need for extra machines to participate in staking. And since the holders of the coins are incentivized to keep them and not sell, the price of the coin is more stabilized. 

Remember though, once you stake a coin, your funds will be locked in for a period of time.    

Earn interest with DeFi

DeFi lending pools can also help you earn money with cryptocurrency.

You can lend your cryptocurrency in a lending pool, and then gain automatic interest on loans from the pool. Thanks to increasingly-secure lending protocols, you can invest your idle cryptocurrencies for a strong return with little to no effort on your end.

However, interest rates are highly subject to change in most lending pools. You may want to go through a platform like Yearn.finance if you want to get the most bang for your buck. Or, if you like a more personal touch, check out crypto-backed P2P lending.

How to convert cryptocurrency to cash

Earning money with cryptocurrency is only half the battle. You’ll also need to convert your crypto portfolio into cash if you want to spend it—which can be a challenge for several reasons. 

While Bitcoin and other cryptocurrencies have the potential to eventually overtake fiat currencies, it can be hard to spend crypto right now. Only a handful of businesses or organizations accept cryptocurrency directly as a form of payment. Similarly, banks won’t convert your cryptocurrency to cash for you, so you’ll have to find alternative methods.

However, it’s often a time-consuming and multi-step process, changing your crypto to cash is quite possible.  

Sell on a cryptocurrency exchange. Because banks won’t accept cryptocurrency, you’ll need to sell your crypto on an exchange for USD-backed stablecoins like USDT. From there you’ll have to sell your stablecoins for actual cash, usually for a decent-sized fee.

Get a Bitcoin debit card. Several companies allow you to link your cryptocurrency to a physical debit card. They can help you transition your virtual currency into the real-world by offering you a way to spend your crypto at stores, restaurants, and other physical locations.

Find a cryptocurrency ATM. Cryptocurrency ATMs allow you to withdraw cash directly from your crypto balance. Unfortunately, there are fewer than 10,000 cryptocurrency ATMs worldwide so in most locations this isn’t an option. 

Cash-out stablecoins. Stablecoins peg their value to a reserve asset that doesn’t change too much in value like USD. Once you have stablecoins in your portfolio, you can use several different apps, like Wirex, to cash out your stablecoins. There are fees and limits associated with these types of transactions, but it is an option for you to get your cash quickly. 

Once you’ve identified the best way to make money with crypto, you’ll need to turn your earnings into cash using one of several ways
Once you’ve identified the best way to make money with crypto, you’ll need to turn your earnings into cash using one of several ways (source: images.unsplash.com)

Cash out your crypto fast and earn up to 9% APY with MyConstant

On our platform we offer lending pools with more fixed rates. Right now, investing in our crypto lend feature with BNB, BTC, or ETH gets you steady returns of 9% APY with anytime withdrawals.

And unlike many DeFi platforms, we have people you can call if anything goes wrong.

That’s not all. Crypto-backed P2P lending offers all-new levels of crypto liquidity too.

Instead of wasting time on exchanges or using indirect (and expensive) methods of converting your cryptocurrency to cash, you could opt for a P2P crypto-backed loan from a platform like MyConstant

With MyConstant, you can even combine more than 70 types of crypto as collateral for a cash loan

That means you can leverage the value of your assets to obtain money or stablecoins—without selling them. You even get stablecoin-to-USD conversion for coins like USDT, USDC, and DAI at a much lower price. 
Come check us out today and start earning money on your crypto the right way.

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George Schooling

George Schooling

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