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2020 saw crypto gain critical momentum, with major corporations and financial institutions seeking exposure to bitcoin. While anyone can purchase cryptocurrencies, there are other ways to acquire BTC and other coins, and grow your portfolio without a large up-front investment.
As a new set of technologies and an asset class with a fast-growing community of avid supporters, crypto offers exciting opportunities for traders and investors. The backing of companies like Microstrategy and Tesla, as well as its adoption by nations as legal tender, has seen bitcoin explode in popularity and price – and there’s good reason to believe that crypto will continue to gain traction in the months and years to come.
It’s not just institutions with deep pockets who are buying crypto. Anyone can access these new digital assets, with regular retail traders proving enthusiastic when it comes to holding crypto. But while simply purchasing coins from an exchange is the simplest way to acquire crypto, there are plenty of other options.
Earning crypto (the easy way)
This article looks at some of the easiest ways to earn bitcoin and other cryptocurrencies. They’re suitable for almost anyone, and they don’t require a large up-front investment – you can get started with just a little capital, or none at all.
They also work for those who aren’t super tech-savvy. For example, while mining can be a good way to get into crypto, it won’t be discussed here as it generally requires specialist hardware and a fairly technical understanding of the space, making it inaccessible to many people.
As a newcomer to crypto, your aims should be twofold: to build your crypto portfolio, and to learn as much as you can about this new asset class. The more you know and the better you understand crypto, the more opportunities you’ll have to explore and acquire promising new currencies.
One of the best ways to do both at the same time is to take advantage of ‘Learn and Earn’ campaigns, such as those run by Coinbase (one of the largest and most popular exchanges in the world) and industry site CoinMarketCap.
The idea is simple. You’ll watch videos and read content that gives you key information about different cryptos. Then you’ll answer a few questions to make sure you’ve understood everything properly. At the end, you’ll receive a small amount of that crypto. It might only be a few dollars each time – Coinbase Earn, for example, tips you between around 3 USD and 10 USD for each currency – but with many cryptocurrencies profiled, it all starts to add up. In any case, it’s the start of your crypto education, which is priceless.
Other sites and crypto projects extend this idea to a much more varied range of microtasks, also known as ‘bounties’ in the crypto world. By completing small jobs, such as following a social media account or sharing a post to help with promotion, you can earn crypto tips. Again, the amounts may be small, but they all add up, and you’ll also get a foot in the door with these communities, which may lead to other opportunities.
2. Get a crypto job
Microtasks are one thing, but if you want to earn larger amounts of crypto, you’ll need to think bigger.
If you’re familiar with the crypto space and have relevant skills and experience – for example, if you’re a developer, or have a background in marketing and PR – then you can apply for one of the many jobs going in the blockchain space (a LinkedIn search is a good place to start, or you can look through the recruitment pages of different DeFi and crypto sites). In many cases, the salaries will be paid in crypto, or there will be an option for part-payment in crypto, or there may be performance- or time-related token bonuses.
If you’re not looking for a full-time role, or even necessarily a job in the blockchain world at all, you can still freelance for crypto. Sites like LaborX and CryptoTask allow freelancers to advertise gigs or complete jobs that customers have posted, and receive crypto as payment. These jobs may be in areas as diverse as graphic design and marketing, as well as more technical fields like software development.
Part-time or full-time, freelance or permanent, there are plenty of sites that enable you to earn crypto by working.
3. Staking and Yield Farming
While crypto has a reputation for being high risk, the blockchain world has lots of opportunities for earning fairly safe returns.
Proof of Stake crypto platforms allow users to earn more coins by locking their existing holdings to help support network security. (This is a much more straightforward process for users than Proof of Work mining, and generally entails simply giving a crypto wallet permission to stake your coin balance.) Staking yields are typically in the region of 5-10% annually, though they’re paid in the coin itself, which can obviously fluctuate in value. If you earn a proof-of-stake crypto like Cardano, Cosmos and others, this is an easy way to put your funds to work.
Projects like TimeWarp extend this idea by using revenues from an ecosystem of blockchain services to buy back tokens from a finite supply already on the market to reward stakers. The yields from this and similar projects can be 100-200%, or even higher, since the value of the tokens themselves can appreciate rapidly due to the additional buying pressure. (Of course, the value can also fall.) Some DeFi staking projects offer even higher yields, but returns are generally correlated with risk – so the higher the yield, the greater the chance of something going wrong.
More earning opportunities are available through the new sector of Decentralised Finance (DeFi), which aims to offer financial services like lending and exchanges, but without the middlemen. The yields from platforms like Aave, Compound and others can be remarkably high compared to the traditional finance (TradFi) sector. When governance tokens (extra rewards paid in the project token to incentivise liquidity providers) are factored in, double-digit percentage APYs are common. The practice of ‘yield farming’ has arisen, in which users allocate their capital to the best opportunities, moving it around on a daily basis as new protocols offer better returns.
To help users gain the best rates without needing to constantly monitor the market and actively update their positions, a new range of ‘CeDeFi’ (centralised DeFi) projects have launched. These include well-known platforms like Celsius, Nexo, BlockFi, Yield, and others. The approach is the same in each case. Users deposit crypto to the platform, like a centralised exchange, which then allocates funds to the best opportunities. Rates differ depending on which crypto users hold, but can approach 20% per annum for stablecoins like USDT and USDC.
4. Trade or invest
Crypto trading is a popular activity, with some users making large profits. However, trading can also be risky, since the crypto markets can be extremely volatile. Overall, you can categorise trading and investing in terms of the different time frames in which users seek to make profits:
- Day trading – less than a day
- Swing trading – days to weeks
- Position trading – months to years
- HODLers – years/indefinite
In general, the shorter the time frame, the greater the risk, with day trading being the riskiest of all (especially when leverage is used, since this magnifies both gains and losses). Your preferred trading strategy will depend on personality and resources; day trading, for example, can be stressful and may not be suitable if you cannot focus on the markets for extended periods of time in the day. But the same broad principles of trading are applicable whatever your time frame, and learning a little can help boost your chances of profiting from the markets. Sites like BabyPips break down the major indicators and approaches into easy lessons, helping give you an edge over those who simply treat trading as a matter of luck.
Some of the most successful crypto ‘traders’ have really been HODLers: those who buy bitcoin and other cryptocurrencies, and hold them for years, no matter what the market does. While they’ve had to sit through periodic 90% declines in value, they’ve also seen the overall value of their investment rise by hundreds or even thousands of times. (It’s not always easy to do that, of course, especially when the rest of the crypto community seems to be panicking and dumping their coins.)
Buying and trading crypto is simple thanks to the wide range of exchanges now available to users. Some, like Coinbase, are global and cater to users all over the world. Others are set up to deal with users in particular jurisdictions – or can be used by customers anywhere, but have specific banking relationships that make it easy to get started with different national currencies. For example, TimeX is an Australia-based exchange that can be used by anyone but that offers fast deposits and withdrawals of Australian dollars, while Bitstamp is a popular exchange for users in Europe.
New crypto projects often bootstrap their communities and raise awareness of what they’re doing by giving away tokens. These can be distributed in different ways. For example, when Uniswap, a popular decentralised exchange, launched its new token (UNI), it airdropped tokens to every address that had ever used the exchange in the past. All users had to do was claim their reward, which was worth over 1,000 USD at the time (and is now worth even more).
In other cases, users who join a Telegram or Discord community, or who contribute in various ways to an ecosystem, will receive tokens. Sometimes it’s simply a matter of registering with an email and crypto address.
Lastly, anyone who sells goods and services over the internet can consider integrating crypto payments into their site. A range of e-commerce plug-ins make it easy to accept crypto, including Coinbase Commerce, Coingate, BitPay and many others. These can be used alongside or instead of traditional payment processing solutions.
There are advantages to accepting crypto payments beyond the opportunity to hold the tokens you receive. Because crypto payments are borderless and open, it allows sellers to reach beyond their normal customer base and sell to customers no matter where they are in the world. Buyers don’t even need a bank account. Moreover, crypto payments are irreversible, so merchants are protected from chargebacks – when a customer pays for a product, which is shipped, but then claims the purchase was fraudulent. The credit card company reverses the payment, leaving the seller out of pocket. Finally, you may be able to appeal specifically to the crypto community, carving out a niche for yourself in this growing ecosystem by showing your support for the new technology.
Build your crypto portfolio
No matter what approach you take to earning crypto, it’s worth thinking ahead about which cryptocurrencies and tokens you want to hold. Different cryptos have different risk and return profiles: some may appreciate sharply in the future, but that can also mean they may crash harder (in some cases, becoming all but worthless).
Diversification is one way to spread risk, ensuring that all your gains/losses don’t come from one token. This also reduces your total potential gains as well as potential losses, but in most cases, investors consider that a reasonable price to pay.
In practice, if you’re earning crypto, you may end up with some mixture of BTC, ETH, altcoins, and stablecoins. Your allocation to each of these will depend on several factors including whether you need funds at short notice, how you view the space as developing in the coming months and years, the risk you’re comfortable taking, and whether you have a particular interest in a specific project or community.
Regardless of what you decide, updating your crypto portfolio, as well as cashing out funds to your local currency when you need to, is easy thanks to the large number of centralised and decentralised exchanges now available.