Bitcoin edged out all asset classes in 2020 to become the most valuable investment asset in the market today. While that performance was not without setbacks, Bitcoin’s price has continued to soar in recent months, with analysts predicting a similar trend in the future. However, most people still wonder how they can make money with Bitcoin.
A Bitcoin wallet serves as the locker or safe where users store their Bitcoins. Bitcoin users have two storage options; cold wallet or hot wallet. A cold wallet is for offline storage in places like hardware, while a hot wallet is online-based, allowing users to store their Bitcoins on crypto exchanges or other online platforms.
Nevertheless, there are various ways to make money from the Bitcoins in your wallet. Here are the main ways on how to use the Bitcoin wallet to make money.
Buying and holding Bitcoins is the strategy that most investors use to profit from Bitcoin. It works just like the regular trading on stock markets but, investors trade on Bitcoin or other cryptocurrencies. In Bitcoin HODLing, investors hold their Bitcoins for some time in the hope of selling them when the prices are higher. If you want to know more about bitcoin, then you can visit here bitcoin billionaire .
One of the benefits of Bitcoin HODLing is that you can always choose to hold your Bitcoins in the short term or long term. Both options can provide huge returns on investments, depending on the Bitcoin prices and size of the investment. Nevertheless, Bitcoin HODLing would only be more profitable for long-term investors.
Bitcoin trading is the best way for investors who want to make money quickly, without waiting for several months or years to cash out. Bitcoin trading leverages the crypto market volatility, allowing you to make money over shorter durations on an hourly or daily basis. Those interested in Bitcoin trading have a few styles to be acquainted with for success.
- Day Trading: The style involves short and quick trades, offering opportunities for faster and small profits. Since the positions are open during the day only, day traders should conduct a careful market analysis to determine precise money-making opportunities. However, that is unnecessary since leading crypto exchanges now have automated functions, providing users with date market analysis and price forecasts.
- Arbitrage Trading also works like day trading, but arbitrage traders look for money-making opportunities across multiple crypto exchange platforms. They take advantage of the Bitcoin price disparities across exchange platforms, buying Bitcoins from exchanges offering the lowest prices and sell immediately to those with higher prices.
- Swing Trading: Swing traders buy Bitcoin when the prices are low, wait long enough to see price increases, and sell high.
Although leading crypto exchange platforms also have optional trading robots, making money with Bitcoin requires a better understanding of the market and practice. So, do your research beforehand to choose a good exchange platform and the best strategy to trade Bitcoin for higher returns.
If you want to avoid the rather strenuous procedures of buying and selling Bitcoins, lending would be the best way to go. Like traditional money lenders, Bitcoin lending involves giving out your Bitcoins to websites or individuals for a specified period in exchange for interest. You can deal with clients directly or invest the money with a reputable crypto lending platform on short term or long-term basis.
You have many ways via which you can still make money with your Bitcoin wallet. However, the strategies discussed above are proven to deliver the best returns on Bitcoin investment. It is also vital that you stay updated on crypto market developments to gain more insights into growing your Bitcoin profits effectively over time.