Cryptocurrencies are currently in a slump. The price of Bitcoin is currently around $24,000, but it fell below $18,000 in June—more than 70% below its all-time high. Despite this, it’s worth noting that just over two years ago, one bitcoin cost barely $5,000.
In addition to Bitcoin, other cryptoassets have suffered similar market setbacks, causing many investors to pull back from the cryptocurrency space. These price declines are particularly severe due to the currently speculative nature of these assets, stemming, among other things, from the lack of a solid regulatory framework and understanding of the underlying technology (blockchain technology).
However, even in these turbulent times, it is possible to achieve attractive returns with cryptocurrencies using some lesser-known methods, which we explain in this article.
The cryptocurrency business operates through various mechanisms and business models that leverage the unique characteristics of these digital assets. Here are some key aspects of how this business works:
Making money with cryptocurrencies can involve various strategies and methods, depending on the investor’s risk profile and market knowledge. Here are some common ways to make money with cryptocurrencies:
Each of these strategies has its own advantages, risks, and technical requirements. It’s important to research and fully understand each method before deciding how to make money with cryptocurrencies, always considering the level of risk you’re willing to take.
Below, we’ll show you the 5 different ways to make money with cryptocurrencies
The way many investors aim to make a profit through cryptocurrencies is by treating them as conventional financial assets. That is, buying them with the intention of later selling them at a higher price.
This process is generally carried out through a centralized exchange (a platform for converting fiat currency to cryptocurrency or vice versa) such as Binance, which holds your cryptocurrency in custody and allows you to trade it in exchange for a commission.
But there are other ways to do this in a decentralized manner, such as through the HodlHdl platform, where you can buy and sell cryptocurrencies using fiat currency with other users, without relying on any intermediary to hold the funds and without going through KYC/AML processes.
If you already own cryptocurrencies and simply want to swap them for others in a 100% decentralized manner, we recommend using a decentralized exchange like Uniswap. You can read more about how they work in this post.
The two main ways to earn returns by buying and selling cryptocurrencies are: “holding” (buying a cryptocurrency and holding onto it for relatively long periods, with the expectation that it will appreciate in value) and “trading” (buying and selling cryptocurrency over short periods with the goal of generating incremental returns).
For those who prefer a more conservative approach, long-term investing (HODL and DCA) remains one of the most reliable ways to make money with cryptocurrencies, especially for those who don’t want to spend hours on technical analysis. DCA (Dollar-Cost Averaging) involves investing a fixed amount on a recurring basis—weekly or monthly—regardless of the current price, which smooths out volatility and avoids the pitfall of trying to time the market perfectly. If you’re wondering where to start, the easiest way to get started usually comes down to a step-by-step cryptocurrency guide: decide which cryptocurrencies to invest in (usually established assets before exploring smaller projects), choose a reliable exchange, schedule your contributions, and decide where to store your cryptocurrencies—preferably in your own wallet once you reach a certain volume. Although this isn’t always the most profitable approach in the short term, it’s usually one of the most consistent over time—provided you avoid common mistakes like getting carried away by the euphoria of a bull market and concentrating your purchases just when prices are already inflated.
Trading and other more active alternatives require exactly the opposite: constant dedication and a steady hand. Cryptocurrency trading can be practiced across different time horizons, ranging from trades lasting minutes or hours to swing trading, which seeks to capitalize on movements spanning several days or weeks without the need to constantly monitor the screen. Due to its liquidity and volume, Bitcoin trading is often the most common entry point for those new to this strategy, although the same technical principles can later be applied to other assets. The reality of trading, however, is that most people who try it without training lose money: it requires risk management, emotional control, and a predefined entry and exit plan, so it’s best to practice first with small amounts or in demo mode before risking real capital.
It’s worth noting that through trading, profits can be made even when the price of a cryptocurrency falls (via traditional mechanisms such as short selling). However, trading is a difficult and risky endeavor if you lack the necessary knowledge and resources.
Below, we’ll mention some methods that can help you make money without directly buying and selling cryptocurrencies.
First, we can participate directly in a blockchain’s consensus protocol with the goal of receiving the next cryptocurrency halving as a reward for our contribution. To do this, we must contribute some type of resource to the network to help create blocks on the chain in question.
In the case of Bitcoin (and all blockchains that operate on the Proof-of-Work protocol), we must first install client software (such as Bitcoin Core) that allows us to run the network protocol.
Once the software is downloaded, we will have a copy of the blockchain and, therefore, the ability to participate in the network’s protocol by creating new blocks, thereby becoming a mining node.
For every valid block we create, we’ll be rewarded with the network’s native token—that is, Bitcoin for Bitcoin, and Ether for Ethereum.
However, it’s worth noting that this field has become highly specialized, and significant initial investments (in mining hardware) are now required if we want to obtain sufficient processing power to compete with other nodes when creating blocks.
Given this scenario, there is also the option to pool computational resources with other mining nodes through a mining pool, which distributes the profits among all participants based on each one’s computational contribution. This is a fairly widespread practice in the community.
In the case of other protocols such as Proof of Stake (networks like Polygon already use it, and Ethereum 2.0 aims to do so), we must also install initial software to become a validator node, but unlike Proof of Work, the process of creating blocks does not depend on computational power, but rather on the financial contribution to the network—that is, the number of tokens you have locked in your wallet.
The greater the number and variety of tokens staked, the higher the probability of being selected to create a block. Just like with Proof of Work, the creator of a block is rewarded with the network’s native tokens.
If we already hold cryptocurrencies, we can participate in various DeFi protocols with the goal of growing our wealth through different financial instruments. DeFi (decentralized finance) protocols are those that aim to replicate traditional financial protocols but in a decentralized manner using blockchain—that is, through P2P (peer-to-peer) transactions.
There are various types of applications built on DeFi protocols.
Some of the best-known are Aave and Compound, which facilitate decentralized lending. Through these platforms, you can lend your cryptoassets in a 100% decentralized manner in exchange for a fee, just as if you were a bank.
You can also participate in Uniswap or other similar decentralized exchanges (DEXs) through yield farming (providing liquidity to a DEX pool in exchange for a fee).
Another very interesting way to generate returns on your crypto assets is through Augur, a decentralized prediction market that allows you to make predictions (“bets”) on various events related to sports, politics, the crypto market, and many more.
Finally, we can use the MakerDAO protocol, which allows us to take out loans in a 100% decentralized manner by using our crypto assets as collateral in exchange for a stablecoin pegged 1:1 to the U.S. dollar. In this way, we can leverage a cryptocurrency and trade using any of the strategies or protocols mentioned above.
Staking and passive income are another avenue to consider for those who already own crypto assets and do not want to sell them or actively trade them. Staking allows you to lock tokens in a Proof-of-Stake network to help validate transactions in exchange for a periodic reward, while DeFi loans—through protocols like Aave or Compound, as mentioned earlier—generate interest simply by providing liquidity. For those wondering if it’s possible to earn cryptocurrency without investing their own capital, airdrops and “Learn-to-Earn” programs are the most accessible alternatives: airdrops distribute tokens for free to early or active users of a project, and learning platforms award small amounts of crypto in exchange for completing courses. Added to this group are “Play-to-Earn” games, where cryptocurrency is earned by progressing through the game. This could be called an NTC approach, designed for those who want to familiarize themselves with the crypto ecosystem without risking their own money.
We can get different cryptocurrencies and use them for free!
If you’re looking to diversify your investment portfolio with tokens backed by real assets such as real estate and achieve returns exceeding 14% annually, Domoblock has the solution for you.
Thanks to real estate tokenization, Domoblock offers a new way to invest through real estate crowdfunding—making real estate investment easier and more affordable, accessible to anyone regardless of capital or location.
Investors like you can benefit from recurring income, greater liquidity and capital efficiency, and steady cash flows from rent and capital gains on appreciated properties—all 100% digitally and with just a few clicks.
Thanks to blockchain technology, Domoblock digitizes the investment value of a real estate project and represents it in the form of a token, democratizing access to real estate investment. You no longer need large amounts of capital to invest in real estate; thanks to Domoblock, you can do so with a minimum investment of just €200.
Crypto investors can invest in tokenized real estate as a strategy to protect their portfolio during bear markets or to diversify their portfolio into more stable assets with a better risk-return ratio, while retaining all the benefits offered by blockchain technology.
To withdraw money from cryptocurrencies and convert it into fiat currency (cash), you can follow these general steps:
It is essential to use a reliable and secure exchange platform to ensure that your funds are protected throughout all stages of the process. Additionally, consider local tax implications and make sure to comply with any tax reporting requirements that may apply to profits earned from cryptocurrencies.
It’s clear that there are numerous ways to make money through cryptocurrencies today. However, it’s important to note that the key to success in our investments will depend largely on the decisions we make.
That’s why it’s important to have a solid investment strategy tailored to your financial situation and risk tolerance, to invest with a long-term perspective (anyone who tells you they’ll make you rich overnight is deceiving you), and to diversify your investment portfolio across financial products based on well-founded projects.
In this regard, the information in this article is not investment advice, but rather different ways to achieve returns that go beyond simple trading.
On a personal level, I think it’s interesting to learn about all these and other ways to generate extra returns on our savings in a market that’s constantly growing and expanding, try out the ones that interest us most and fit our investor profile, and, of course, always invest in financial products we understand—using capital we don’t need for our day-to-day living.
Written by Jorge Infante, a writer specializing in blockchain
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León XIII, 27
Funded
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507.697,35 €
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