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There are many ways to earn cryptocurrency.
Some require that you sit in front of your computer and earn fractions of a penny at a time. Others require that you own some crypto. Still others need a substantial investment to get started.
This article is a brief introduction to the various ways that you can use to make money with crypto. Click on the links for more details on how to earn free cryptocurrency.
A faucet lets you earn tiny (almost microscopic) amounts of crypto in return for taking some actions on a web page. If you have more time than money, this s-l-o-w way to earn crypto could be right for you.
Learn more about crypto faucets here.
If you own tokens of an altcoin (any crypto other than Bitcoin) that uses the proof of stake validation method, you can earn cryptocurrency by staking your tokens (pledging them).
In return, you’ll receive anywhere from 5% (on the low end) to 15% or higher. You could earn more. You’ll also have to stomach price volatility. For some of the smaller staking cryptos, you could end up with quite a stomachache.
Discover if crypto staking is right for you.
There are a few platforms, trading exchanges and crypto wallets that will pay you to store your crypto with them. Why would they do that? So that they can combine your crypto with that of other users to earn more than they pay you.
If that sounds familiar, it’s because it is. This is how banks make money. They pay you 0.05% or so on your money, then use it to make money for themselves (lending it out for a much higher rate, or investing it in another asset that pays more).
The percentage rates you’ll earn for your crypto rewards range from the low teens down to 1% or so, depending on the token. You can also buy BTC or ETH Superchargers with Freeway and earn up to 43% per year.
There are other ways to earn free cryptocurrency, discussed above and below. But they either involve more work, more risk, or both.
I have most of my crypto in platforms and wallets that pay rewards. The platforms are quite secure, and offer rewards on a variety of crypto.
I use more than one, because the rates offered differ between platforms, and some coins/tokens are available on one platform and not another.
I often park a coin/token wherever the rates are best. Although I also have to keep in mind that many of the platforms have fees.
Read more about how to earn crypto rewards.
Unfortunately, the Securities and Exchange Commission in the U.S. is making it difficult, if not impossible, for U.S. citizens and permanent residents (except the wealthy) to earn interest on their crypto.
The SEC says that earning interest on cryptocurrencies makes them securities, and since those securities haven’t been registered, they cannot be offered to people in the U.S. unless they’re accredited investors.
BlockFi was the first to be forced to stop offering interest-earning products to those in the U.S. It even had to pay a $100 million fine.
Freeway allows U.S. people to earn up to 43% on USD assets, EURO or GBP assets, and Bitcoin or Ether crypto.
If you live outside the U.S. and are not a U.S. citizen, you can earn interest on your crypto from any platform that offers it.
You may be familiar with “cash back” credit cards, where the bank or card company will rebate you a percentage of what you spend every month.
The same is available for crypto. And according to a poll commissioned by CouponCabin, 44% of Americans would prefer crypto over cash.
BlockFi has a credit card that lets you earn Bitcoin as a reward.
Voyager is bringing out a Mastercard debit card that will give you 9% on every purchase. The catch is that it spends USDC crypto dollars, not USD fiat currency.
So you’ll need to keep resupplying your Voyager card with USDC to keep earning that 9%. There are fees involved in buying USDC, so that 9% isn’t quite as appealing as it first seems.
Don’t like Mastercard? Binance offers a Visa debit card that gives you up to 8% back on every purchase. It’s available in 31 countries, all of them in Europe. See the card’s FAQ page here for the list.
Coinbase has plans to launch a Visa debit card in 49 U.S. states (excluding Hawaii). It will give 4% back on all purchases. As with Voyager, you’ll be spending your crypto instead of fiat currency.
Rewards platforms, such as Freeway, have referral programs that earn cryptocurrency.
If you refer someone, and that person signs up and deposits a certain amount of crypto, you and the person you refer each earn a dollar amount, paid in Bitcoin.
Freeway pays to the person you refer a bonus of 2% of the interest earned, for a two year period. You'll earn 8% of the interest earned, also for two years.
Many exchanges, such as Coinbase, Binance and, in Canada, NDAX, have affiliate programs. However, many of them pay you in fiat money, so you won’t earn cryptocurrency with them.
You can use that income to buy more crypto though. Or simply use it to enjoy your retirement!
If you have a website, or a large social following, you can add links to pages and posts that people can use to sign up.
If they sign up with your link, you’ll receive a percentage of the trading fees they pay.
You’ll need a lot of signups to make money with this though. Exchange fees are tiny, usually a fraction of one percent.
Do you have some money put away above what you need to live on month to month? Can you can afford to lose some or all of it?
If so, you may want to consider investing in established or up and coming coins and tokens for the price appreciation.
Some people believe that Bitcoin will move well beyond $100,000 USD by the end of 2022, and keep going (with some down periods along the way) to $500,000 USD.
Ethereum’s smart contracts are the backbone of many projects in the crypto space. Some people think Ether could eventually go to $50,000 USD or higher.
There are also many smaller projects that are moving higher, or will likely jump soon.
But always, always keep in mind that prices go down as well as up. If you can’t handle drops of 20% to 50% or more, don’t put your money into anything but stablecoins.
And keep in mind, there’s no Federal Reserve determined to prop up the crypto market, as there is for big banks and the stock markets. No deposit insurance either.
You’re definitely on your own when you invest in crypto.
Here’s a question you can ask yourself to know if the up and down ride is right for you: Should I buy cryptocurrency? If your answer is anything but “Hell, yeah!” then don’t.
Earn rewards on stablecoins, gain experience, and learn, learn, learn. Eventually, the time will be right for you to take advantage of rising crypto prices.
Stablecoins are, technically, cryptocurrencies. However, they behave as dollars.
Since they’re backed by U.S. dollars (or euro, or CAD, etc.) in bank accounts somewhere, they trade in a range that seldom goes beyond half a cent above or below one dollar.
NFTs (non-fungible tokens) are all the rage now.
There are legitimate use cases for NFTs, though, such as fractionalization or asset tokenization (e.g., buying 1/10,000th of a multi-million dollar office building), and the sale of tickets to sporting and entertainment events.
There are some sensible options to invest in rather than speculate on, including owning a share of a collectible item, such as a rare car or comic book, a case of vintage wine, or an old video game.
There are two businesses currently in the fractionalization space:
I’ll admit, neither of these is a way to earn cryptocurrency. But you are taking advantage of the coming wave of investment.
And some of the asset appreciation numbers are mouth-watering.
You don’t have to invest in crypto if you’re not comfortable doing so. You can invest in a fund or an exchange-traded fund (ETF) that owns crypto instead.
So rather than you buying the crypto, you buy into a fund, or you buy shares of an ETF.
NYDIG offers a fund to Morgan Stanley’s accredited investors.
And there are funds from Pantera and Galaxy.
You can also buy shares of the Grayscale Bitcoin Trust through your broker. If you think Bitcoin’s price will rise, but you don’t want to get involved in owning BTC itself, you can buy shares of GBTC instead.
Important Note: The SEC in the U.S. has rejected several proposals, including one from Fidelity, to create Bitcoin spot exchange-traded funds (ETFs). And doesn’t seem to be in a hurry to approve one.
If you live in Canada, or your brokerage can access Canadian stock exchanges, you have several ETFs to choose from.
These include three from Purpose Investments, Fidelity Canada’s Fidelity Advantage Bitcoin ETF, Evolve ETFs Bitcoin ETF, CI Financial’s CI Galaxy Multi-Crypto ETF, and several funds from 3iQ.
Crypto arbitrage is the crypto equivalent of day-trading stocks.
It’s the practice of looking for price differences between crypto exchanges.
If the price of Bitcoin, for example, is higher on one exchange than it is on another, you could sell your BTC on the first exchange and buy it at the lower price on the other exchange.
Your profit is the difference between the price on the exchange where you sold and the price where you bought, times the amount of crypto you sold/purchased.
To accomplish this, you need to keep crypto and/or stablecoins on each exchange. So unless you can afford to keep thousands of dollars on each exchange, arbitrage won’t make you much.
It also involves sitting in front of your computer for much of every day, unless you want to invest in an arbitrage bot and let it do the work for you.
Also keep in mind the fees you’ll be paying each time you trade on each exchange. Fees are usually small; however, they do eat into the profit, just as fees to trade stocks eat into overall profits.
Click here to learn more about crypto arbitrage.
Decentralized exchanges (DEXs) are exchanges that no one controls (Coinbase is an example of a centralized exchange).
Since no enterprise has injected large amounts of money to get the exchange off the ground, liquidity must come from users.
For example, one cryptocurrency pair might be USDC/BTC. Users can trade between the USDC stablecoin and Bitcoin.
If there’s little of either one on the exchange (low liquidity), price swings could be large, which would keep people from trading that pair.
Providing liquidity is your opportunity to earn cryptocurrency. But it requires larger amounts of crypto. You agree to provide some of each type of crypto in return for a percentage of the yield.
This is an advanced method of earning crypto.
I do not recommend this unless you have a lot of crypto trading experience under your belt, and have a large sum of money to use to provide liquidity.
There are a lot of scams out there, and you could be taken in by one if you don’t have enough knowledge and experience of decentralized exchanges.
This is a very advanced way to earn crypto. It’s highly technical, with many ways to fall off a cliff and lose money.
The amounts you can earn are extraordinary. Low yield rates are in the 20% range and higher (typically for stablecoins).
They can soar as high as several hundred percent, sometimes into the thousands, although usually only for short periods of time.
I can’t reiterate enough that yield farming requires a lot of training and experience, and a keen eye for detail. One wrong selection could end up costing you a lot of money.
I do not recommend yield farming unless you have at least $50,000 in crypto assets, and can afford to lose it, and have a lot of experience on decentralized exchanges.
There are several ways you can earn cryptocurrency without investing in crypto. Many require a substantial investment though.
You can buy a “crypto mining rig” and begin mining Bitcoin or other proof of work coins or tokens.
Ethereum is moving to a proof of stake system in 2022 (if all goes well), so it will no longer be available for mining.
Another form of mining is to become a validator on a proof of stake network. This requires a large amount of money to get started, most of which goes into buying the crypto you want to validate.
You’re better off staking smaller amounts with existing validators (see the discussion above about staking crypto).
There are a few crypto miners that have gone public. So you can invest in them on the stock market. Two of them are Marathon Digital (MARA) and Riot Blockchain (RIOT).
These companies have received large cash infusions, so instead of selling their Bitcoin on the open market to pay for electricity and new mining units, they’re hoarding the BTC.
When Bitcoin rises above $100,000 USD, which many predict, these businesses will be worth a lot of money, simply due to the huge numbers of BTC they hold.
If you’re on a limited budget, or the thought of losing money makes you feel ill, then you’ll want to earn cryptocurrency as “cash back” from a credit card or debit card.
Or earn rewards on stablecoins, if you live outside the U.S. and are not a U.S. citizen, or are an accredited investor in the U.S.
Earn as much as 43% on stablecoins with Freeway. Yes, it sounds too good to be true. It’s not though. I’m earning 43% on a large chunk of my crypto assets. That’s definitely helping me stay ahead of inflation.
Click here to learn more about Freeway, including how you can earn a 2% bonus on the interest you receive, for two years. The more interest you earn, the bigger your bonus.