The crypto market continues to boom as it attracts people to trade and invest for possible massive gains. Leading these crypto assets is Bitcoin, which has shown market optimism and resilience over the years. As such, there are specific strategies for making money through Bitcoin investments.
Since the launch of Bitcoin in 2009, it has been the fulcrum of the development of other cryptocurrencies – making it the pace-setter of decentralized finance (DeFi).
Bitcoin’s value has made it a popular investment option not only in the crypto market but also in the global financial market. This is evident as its value rallies above other investment assets like gold and silver.
At the time of writing this article, the price of Bitcoin is about $26,780, with a market cap of over $522 billion. This makes it the most expensive crypto asset in the market.
Therefore, you can be sure of investing in a valuable asset when you choose Bitcoin as your preferred investment option.
As investing in Bitcoin is a great plan, there is a need to know the strategies for making money from this crypto asset.
1. Buy And Hold Bitcoin
This involves the purchase of Bitcoin and holding it for a certain period. You can invest in Bitcoin by buying the coin and have it for a year or longer without the intention of selling it anytime soon.
This is a long-term approach to leave the coin in your wallet and forget it until the need arises to sell it.
On the other hand, you can have a short-term approach to Bitcoin investment. You can buy Bitcoin and hold it to study market trends and predictions on the best time to sell Bitcoin.
While this Bitcoin investment strategy can be risky, especially in the event of a price tank, it is considered the simplest way to make money from Bitcoin investment.
2. Bitcoin Trading
Bitcoin trading is the buying and selling Bitcoin – in the same way as other assets. It is noteworthy that crypto trading is one of the best ways to make money online, and this is due to the real-time value the assets hold.
Therefore, you can be a short-term Bitcoin investor by buying and selling your BTC quickly.
This is related to the short-term approach of buying and holding Bitcoin, as discussed above.
You can start trading Bitcoin with crypto day trading or crypto arbitrage techniques. But you will be making money in the short term with this strategy.
In addition, Bitcoin trading requires knowledge of the latest trends and predictions to influence your decision on when to sell Bitcoin.
3. Invest In Bitcoin-Related Startups
There are different startup businesses in the crypto space that you can invest in. This is similar to investing in startup fintech or businesses with the potential for a huge return on investment (ROI).
The crypto space also has many startups, companies, stocks, and blockchains that avail you many gains. Here, there are many blockchain-based startups you can invest in with your Bitcoin.
However, it is important to look into Bitcoin or blockchain-related companies to study their whitepaper, goals, and other information to inform your investment decision with them.
4. Bitcoin Lending
Crypto lending works similarly to traditional lending operations. While it is a new way of making money from Bitcoin, it is quite a profitable strategy.
You need to choose from different crypto lending platforms to adopt this investment strategy.
Bitcoin lending requires you to deposit your BTC into the lending pools.
You will be making money as users borrow your funds, and some lending platforms can offer up to an annual percentage yield (APY) of 15%.
Some lending platforms are Binance, Crypto.com, Compound, Aave, etc.
Meanwhile, some lending platforms require borrowers to provide collateral before they access funds in the lending pool, and other platforms may not offer this feature.
Therefore, Bitcoin lending can be a risky investment option if you are using a platform that is not fully committed to the safety of your funds.
5. Bitcoin Mining
Bitcoin mining involves the proof-of-work (PoW) mechanism to create new blocks added to its blockchain.
This is one of the toughest cryptocurrencies to mine, hence making it a complex investment strategy.
But you can make money from Bitcoin mining by investing in cloud mining. You start this by paying a one-time fee for a contract, and you will be earning at the end of every month.
How much you make from cloud mining depends on your preferred plan and the electricity bill at the mining facility.
Frequently Asked Questions (FAQs)
How Much Should I Invest In Bitcoin To Make Money?
You can invest between 5% and 30% of your Bitcoin to make money. While 5% is considered safe, 30% and above of your funds can be risky. Therefore, ensure to invest an amount of Bitcoin you can afford to lose without affecting you.
How Can I Make Money From Investing In Bitcoin?
You can make money through Bitcoin trading, lending, mining, investment in Bitcoin-related startups, and even buying and holding. You need to know the strategy that best works for you before choosing.
Is It Smart To Invest In Bitcoin?
Bitcoin can be a smart investment, but it is important to know the volatile nature of cryptocurrencies. This makes it a risky investment option. While a huge price swing can enable you to make more money, you can suffer a significant loss from such an event.
How Can I Invest In Bitcoin In Nigeria?
You can invest in Bitcoin through Bitcoin trading in Nigeria. Different platforms enable you to buy and sell Bitcoin.
I recommend Prestmit as the best place to trade your Bitcoin in Nigeria. You need to create a Prestmit account after downloading its app from the Google Play Store or Apple Store to start your Bitcoin trading.
Conclusion
Bitcoin is a viable digital asset, enabling you to earn from various investment options. Its high price is one major factor crypto enthusiasts consider in choosing the asset.
However, it is important to adopt the strategy to understand before deciding on the preferred Bitcoin investment option.
