5 mins

How to make money through crypto

Akshay Subramanian
May 10, 2022

You must have encountered endless stories of people turning into millionaires overnight because they invested in cryptocurrencies. You must have already heard of people creating an NFT that sells for a massive amount of money. It’s probably made you wonder how you can earn money from crypto and see those insane, insane returns in your portfolio as well.

An important point to note is that making money from crypto is not a get-rich-quick scheme. Though the returns from investing in crypto are considerable, the risk involved is equally high, and there is a highly volatile market to deal with.

The right amount of research and a genuine interest to put in the efforts needed could help you build the best possible system for making good returns from the crypto markets. A strategically sound combination of the following ways could help you make money from crypto.

Ways of making money from crypto 

From Cryptocurrencies

  1. Investing

If you want to opt for long-term investments, the buy and hold strategy might fit well with you. While the short-term crypto market is extremely volatile, long-term investments in cryptocurrency have proven to be extremely profitable in the past. 

Though there are no tax benefits of holding investments for a long time in India, the tax implications only come forth upon selling the assets. This tenure can be prolonged long enough to take advantage of the tax burden, which may (or may not) decrease in the future.

  1. Staking and Lending

Staking refers to a way of providing validation to crypto transactions. By staking your coins, you can leverage the coins that otherwise just stay in your crypto wallet.

The proof-of-stake mechanism is one that a lot of popular blockchains use. It eliminates the need for mining crypto and paying high gas fees. This mechanism thrives on investors staking their crypto and providing liquidity which enables smooth transactions and smooth exchange of cryptocurrencies.

Staking helps you earn rewards in the form of more cryptocurrencies.    

Decentralised Finance (DeFi) Apps provide the option of lending the cryptocurrency in exchange for earning interest, just like traditional banks do. Instead of the intermediary (banks), the decentralised platforms connect the lender and the borrower to finalise the transaction through secure smart contracts.

Taking cryptocurrency loans is much easier than regular traditional loans, and the interest charged would also come directly, without the intermediaries taking a chunk of it.

Lending helps you earn interest.

  1. Trading

Those who have the time can study the market and make the most of the volatile markets. Reading crypto charts and forming an analysis could help generate good returns. Having analytical and technical skills are essential for adequately trading cryptocurrency and earning money from this technique. Candlestick Charts, Moving Averages, and Support or Resistance Levels are some of the common ways of performing trend analysis of the crypto markets.

Using appropriate tools, you can make profits no matter how the market performs. 

  1. Crypto Social Media

Cryptocurrencies rely a lot on marketing. Since the crypto ecosystem is still in its nascent stages, unique ways of using social media to increase its reach is an avenue of earning free tokens that can be tapped into. Many new cryptocurrencies offer their native tokens for creating and curating content for them.

  1. Mining

If you have the requisite technical skills, crypto mining is a lucrative option to earn a good amount of income from cryptocurrencies. Miners are essential for the proof-of-work mechanism used by blockchains like Bitcoin and Ethereum. Mining results in new coins being rewarded to miners who can fulfil a transaction. Mining requires using a considerable amount of expertise and upfront investment in specialised hardware as well.

From NFTs

  1. Creating NFT

Suppose you’re an artist of any kind; you can consider creating your own NFTs and marketing them to increase their value. Pixelated Art, In-Game Features, Tweets, Magazines and many more have gone on to become famous NFTs. NFTs often drive their value from their utility, so be sure to throw in some fun features and exclusive offers to better market your NFT.

  1. Trading NFT

Instead of creating NFTs, you can keep an eye out for valuable NFTs on the market and sell them when they increase in value. You can also enjoy their utilities before selling them. Be sure to buy the unique NFTs and market them appropriately to raise their value and demand.

  1. Social Media for NFT

With a large number of NFTs currently making the rounds, it becomes crucial to market the NFTs in the right way, showcasing the story behind the creation of the NFT, their use cases, what makes them unique and the features that come with owning the NFT. Most NFTs also thrive on communities that drive the value of the NFT upwards. Creating and managing the communities as well curating an optimum marketing plan for the NFTs is a lucrative way of earning money by being involved in the NFT space.

Others

  1. Play-to-earn

Many cryptocurrencies and NFTs are linked to games where users can play and earn these tokens. Games like Axie Infinity and many others offer unique in-game features where cryptocurrencies can be used and earned. This fun and exciting way is one of the most accessible techniques for earning cryptocurrencies, but you will still need to be linked to a crypto wallet to receive the rewards.

  1. Educating on crypto

The amount of information on cryptocurrency is relatively less compared to the speed with which blockchain technology is developing. As more and more applications of blockchain technology arise, the need to break it down for potential investors to understand is becoming crucial. Many investors see promise in crypto but refrain from making investments because they don’t fully understand the ecosystem. Imparting education to enable investors to make the right choices based on a proper analysis is a wonderful way of putting your existing crypto knowledge to good use. Through this, you will be giving investors the confidence to leverage the crypto market in an informed way.

  1. Airdrops or forks

Airdrops are tokens distributed to the public before the launch of a cryptocurrency or the drop of an NFT to create awareness about the token. Airdrops also help crypto exchanges create a base for a big project. Airdrops offer free tokens to users or discounts that can be used to purchase other tokens, invest, trade or use to earn money through the methods as mentioned earlier.

Forks typically happen when an existing blockchain deviates from the original governance rules and creates a new blockchain with new rules. When a fork happens, investors stand a chance of getting tokens of the new network for free.

Parting Thoughts

The crypto industry relies heavily on research. Be sure to do your own share of research before opting for any one of the above methods of earning money through cryptocurrencies. As the crypto market grows, more ways of earning money from crypto will also emerge. Stay tuned to Kuber tax for the latest updates on how to leverage the budding crypto market.

Have the tax calculations of crypto income got you worried? Track your investments with ease and generate detailed tax reports with the crypto tax calculator - KuberTax! 

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