As soon as investors buy Bitcoin on paybis, there’s only one thought that goes through their minds – how to increase the value of their portfolio. Making money with cryptocurrency is very common these days, and the opportunities keep increasing.
In this article, we go through our favorite methods and help you discover how you, too, can make a profit through Bitcoin. After reading this post, you should have a good overview of all the financial services you can implement to grow your portfolio.
One of the most popular ways to earn money through Bitcoin is by staking it. In short, staking refers to the process of “locking” your coins, making them inaccessible for a short period. By staking it, you earn interest in the form of the same (or a different) cryptocurrency, which is then credited to your account.
There are two different types of staking:
Savings accounts were popularized in 2018-2019 when popular exchanges started offering more rewarding alternatives to bank accounts. The annual percentage yield depends on the cryptocurrency staked and is known to be at least 10 times higher than saving your money in a bank account.
To give a short example, Blockchain wallet currently offers savings accounts that yield an average of 5% APY for Bitcoin and up to 12% APY for stablecoins.
This is the least risky way to increase the value of your portfolio and one that many high-capital investors use to generate passive income.
Trading is obviously the most common way to (potentially) generate profits from your Bitcoin. Users trade cryptocurrency pairs on exchanges in hopes of outsmarting the markets and increasing the value of their portfolio in return.
There are, generally speaking, two types of traders:
The above options are later broken down into several subsections, making trading a very broad and complex topic that requires both education and continuous practice. And even then, only a small percentage of traders end up profitable in the long term.
“HODL” comes from the word “hold” and is an acronym commonly used among cryptocurrency investors to explain the process of long-term investing. In other words, HODLers are those that do not sell their coins when volatility hits the market but rather keep their coins stored in a wallet due to their unshakable belief in their fundamentals.
Bitcoin is the most commonly HODLed coin, and those who managed to control the emotions and not sell over the years are now heavily rewarded. Obviously, this process comes with a lot of anxiety since the markets fluctuate heavily – however, those that have gone through the process long enough are now immune to such feelings.
In order to make money by purchasing Bitcoin through HODLing, it is important to research a coin’s fundamentals. For Bitcoin, this would be the 9-page whitepaper of Satoshi Nakamoto, which outlines Bitcoin’s underlying technology and its future potential.
You should now have a better idea of all the different methods you can use to increase your portfolio’s value. In short, here are the methods we looked at:
HODL your Bitcoin for the long term and study its fundamentals. This is the least risky and potentially most rewarding option you can choose.