A digital asset, cryptocurrency is becoming more popular and having a wider range of applications. While this digital currency is used as a medium of exchange, some seek to profit from it. Luckily, there are platforms like Cryptosoft and CryptoRevolt that can help you with that.
That said, here are ways by which one can profit from cryptocurrency:
Buy low and sell high
Doing this can be done in either of two ways:
This method involves buying cryptocurrencies and waiting for the price to increase. Once this price change happens, the cryptocurrency holder then sells this for a higher price. His profit is then the difference between the eventual sales price and the initial purchasing price.
- Exchange arbitrage
Different exchanges sell different cryptocurrencies. This sale also occurs at different prices. To profit in this way, you could look for exchanges that sell at relatively low prices, and buy from this. Then you sell high to exchanges who would buy from you at a higher price.
Your profit is the difference between the eventual sales price and the initial purchasing price.
Accept cryptocurrency as payment
Seeing as more people are using cryptocurrency as a medium of exchange, you could also adopt this into your business. Instead of, or in addition to, fiat currency, you can start accepting cryptocurrency as payment for services provided or products sold.
You could then either exchange these cryptocurrencies for fiat currency or you exchange them for other altcoins with lesser value and profit on the difference in value.
Doing this would, however, require a proper valuation of the cryptocurrency and how much of which one would provide enough value for the business transaction.
Cryptocurrency is usually created through mining activities that occur on the blockchain network. This mining involves the solution of complex mathematical problems which, when eventually solved, lead to the generation of another currency that is added to the network. Successful miners are usually compensated with some cryptocurrency.
All you need do is get a system that can mine, set it up, and let it run. Know though, that the mining period varies. This variation could be as a result of the efficiency of the system used, the abundance of electricity; as the mining process is power-intensive, and the type of cryptocurrency being mined; some cryptocurrencies have a faster mining time than others.
Use affiliate programs
Cryptocurrency affiliate programs used by exchanges and peer-to-peer marketplaces allow people to promote their products and services. This is done in exchange for a commission that could either be fiat or cryptocurrency.
In this case, you sign up with an exchange or a marketplace to be an affiliate, after which you get a link with a unique tracking ID attached to it. This ID is used by the marketplace to identify that it was through the use of your link someone transacted with them. When this happens, you receive a commission in return.
While some want to be owners of cryptocurrency, some are content with borrowing this for a while, after which they return it to the lenders along with a lending fee.
If you already have cryptocurrencies in your possession, this is another way to profit from cryptocurrency.
To Wrap It Up
Owing to price volatility, cryptocurrencies are subject to sometimes sudden price changes which could translate to profit or loss for the investors.
To ensure you maximize profit, ensure you study and understand the market and market charts before venturing into profiting from cryptocurrencies.
Author | Emily Forbes |
An Entrepreneur, Mother & A passionate tech writer in the technology industry!