The cryptocurrency world is an exciting one to be in, and you can make money by investing in bitcoin. This blog post will teach you how. Bitcoin is the most well-known cryptocurrency. It’s been around since 2009. However, only recently have people started to see its true potential for making money. It’s currently worth about $60,000 per coin and if you buy low then sell high your profit margin could be huge!
In this blogpost we’ll give a short history of cryptocurrency, talk about some of the ways that you can make money by investing in bitcoin, and then end with a discussion about whether it’s worth it or not to invest in this particular crypto coin.
Also, if you want to learn how to make money by investing in bitcoin, use the table of contents below to go straight to that section.
History Of Bitcoin
Bitcoin has been around since 2009 and first came about when someone (or a group of people) under the pseudonym Satoshi Nakamoto published an academic paper about “a new electronic cash system that’s fully peer-to-peer, with no trusted third party.”
The first bitcoin was mined in January 2009 and it’s been growing ever since! As an example: there are currently 16 million bitcoins that have already been created out of a total of 21 million coins that can ever be made (as we’ll discuss later).
Satoshi’s idea was to create something like gold or silver but in digital form. This was a revolutionary idea. It meant that people could trade with each other without having to go through a bank.
As I mentioned, the first coin was mined in January 2009 and the idea quickly caught on because it solved so many problems at once.
For example, it eliminated credit card fraud. It made it more difficult for banks to launder money (because they didn’t have access to people’s digital currency). It also made expensive wire transfers between countries non-existent due to crypto’s blockchain network.
Besides having the ability to end certain types of fraud, one of the advantages of bitcoin is that it is finite. This means that there will only ever be 21 million bitcoins created.
Contrast that with fiat currency. (Fiat currency is currency that a government has declared to be legal tender. This currency, though, isn’t backed by anything physical.)
For example, the United States dollar was originally pegged at $20.67 per ounce of gold. The US Treasury could issue as many dollars for every unit in their reserves (gold). Nowadays, it’s worth about one-tenth its original value. Why? Because the government can print unlimited amounts without any backing whatsoever! Due to this, inflation will always exist with fiat currency. Bitcoin won’t inflate or deflate due to supply/demand factors since there are finite bitcoins available worldwide.
This makes investing much safer. You know your investment’s worth. You don’t have to hope that someone else won’t create another trillion dollars tomorrow morning out thin air like some central bankers do these days ;).
How To Make Money Investing In Bitcoin
All right, now it’s time for the section you’re most excited about.
Can you make money by investing in bitcoin? The short answer is yes. The longer answer is that while there are always risks in making financial decisions, investing in bitcoin can be a way to make money.
Some people have made a lot of money. Some people haven’t made very much money. And some have even lost money through crypto technologies. However, if you understand how to make money by investing in bitcoin, you can lessen your risk.
This site is all about how to turn your cents into dollars. Sure, if you had a cool million, you could invest in bitcoin and make a lot of money. But we’re not starting with that premise. I’m going to show you some ways to make money investing in bitcoin that cost very little (or even zero) capital to start.
The first (and most common) way to make money by investing in bitcoin is to actually buy it. Once you buy it, you can either hold it (waiting for the price to go up) or trade it like an investor. It’s not difficult to buy bitcoin, you just have to know where to go and the process to get you there.
In short, the process is as follows:
- Get a bitcoin wallet
- Join a bitcoin exchange
- Connect your wallet to the exchange you signed up for
- Buy bitcoin from someone else (make the trade)
- Keep track of your bitcoin investments
OK, so the first thing you need is a bitcoin wallet. Since bitcoins are digital, you need a “wallet” that can hold this digital currency. That’s where the cryptocurrency wallets come in.
There are two types of wallets you can get to store your crypto coins:
- a physical wallet (also known as a hardware wallet)
- a software wallet on your mobile device
Remember, bitcoin is a digital currency. There’s nothing physical about it. (Some people have started to make physical bitcoins but these have the ability to store the digital bitcoin itself on them. The coin itself isn’t the bitcoin.)
A physical crypto wallet is a physical object that stores your bitcoin (or other alt coins). It can be a USB drive or even paper with the keys written on it (called “paper wallet”). Physical bitcoin wallets (or cold wallets — because they’re not connect to the Internet) come in all shapes and sizes. They can also have different functionalities. For example, the Ledger Nano S is a popular wallet that you can buy on Amazon for about $65. The Ledger will not only hold your bitcoin but can also securely hold other cryptocurrencies like ETC or Dogecoin.
Besides physical bitcoin wallets, there are also software wallets. These wallets are apps that you download to store and spend digital assets. I’m not going to list all the different software wallets out there but needless to say, there are quite a few. Once again, you’ll want to make sure you do your research so that you get one that fits your needs.
One you’ve decided how you’re going to hold your coins, you need to create a cryptocurrency exchange account. This allows people throughout the world to trade bitcoins and other cryptocurrencies as trader or seller. A bitcoin (or cryptocurrency) exchange is like a stock exchange. It’s a place where you can buy or sell digital assets. There are lots of different cryptocurrency exchanges — some good, some bad.
You NEED to do your research and examine the data before deciding which bitcoin exchange to use. Bitcoin exchanges can be risky. In fact, there have been instances of bitcoin exchanges stealing people’s bitcoins. So make sure you go with a reputable one.
How do you do that?
Well, the best bitcoin exchanges provide information about themselves, including the following:
- Their location and contact details
- The type of license they have
- Their trading fees — how much you’ll pay to buy or sell your coins on that exchange
Some of the most popular bitcoin exchanges are: Coinbase, Kraken and Bitfinex. Let’s take a brief look at each of these possible choices.
Coinbase is the world’s largest bitcoin exchange. It has more than 13 million customers in 32 countries around globe (as of 2017). The company was founded by Brian Armstrong. He had a goal to create an open financial system for people all over to buy goods without incurring high fees from banks.
Kraken is another popular bitcoin exchange. It’s based in San Francisco, California . It’s been operating since 2011 as a global bitcoin marketplace for buying or selling bitcoins and other digital currencies (altcoins).
Kraken was one of the first exchanges to offer leveraged trading on its platform. This means that you can trade at higher volumes than what your account balance would normally allow without having any risk exposure. The company also offers margin funding. This is when traders who want more leverage but don’t have enough funds available borrow from other people who are willing to lend them money.
Bitfinex is another popular bitcoin exchange founded in 2012. It is based out of Hong Kong and has been operating since 2013 as a global Bitcoin trading platform for major digital currencies such
The company also offers leveraged margin funding. In addition, the site supports other cryptocurrencies like Ethereum (ETH), Litecoin(LTC), and Monero (XMR). Bitfinex is open to users from around the world including US citizens who want access but can’t open an international bank account or use services offered by Coinbase due its Know Your Customer (KYC) requirements.
No matter what exchange you choose, you’ll most likely have the option of signing up with either a bank account or by using credit cards. This will allow instant purchases without having funds sitting around waiting before being able use them. Once signed-up at whichever service suits you best, then it’s time for step number three. All that entails is connecting your exchange with your wallet. This allows you to send your bitcoin back and forth — to the exchange to trade and back to the wallet for storage.
Once you’ve signed up at an exchange — after verifying who you are through bank information and by uploading ID documents, then buying bitcoin really becomes pretty easy. Each exchange interface makes this process straightforward and convenient.
So, how can buying bitcoin make you money?
Well, when you buy bitcoin, you’re not just buying a digital currency. You are investing in the future of bitcoin and, by extension, the entire cryptocurrency market. A lot of people think that the price of bitcoin will only go up.
Let’s look at a graph outlining the rise of bitcoin from its start in 2009.
Not a bad return on investment, right?
And some people believe that we are still nowhere near the top price of what bitcoin could be worth in 5 to 10 years from now. If you buy now and hold your bitcoin investment, it’s possible that you could be one those investors who bought at an early stage for cheap prices then sold high later down the line after demand increased exponentially over time.
Accept Payments in Bitcoin
The next method for making money by investing in alt coins is to accept payments in those coins.
When you accept payments in bitcoin, you are giving your customers the option to pay with bitcoin. Let’s say you’re a freelance consultant. Your clients pay you when you deliver your finished product to them. Normally they might pay you with a check or through a digital transfer using a platform like PayPal. The payments that you receive are likely in US dollars (if you’re in the US). Now imagine that instead of getting paid in USD, you get paid in Bitcoin. It’s the exact same concept. Instead of getting paid money through PayPal or your bank, you get those payments to your cryptocurrency wallet in bitcoin currency.
This might sound a bit far-fetched but I know an investor that sells books (both physical copies and ebooks). He gives people the option to buy his books using fiat money or bitcoin. And you’d be surprised at how many people buy his materials with bitcoin!
The benefits of accepting payments in Bitcoin are that it is a global currency, and there’s no need for you or anyone else involved to have any sort of bank account at all. This means that neither they nor you incur fees from banks when sending money internationally through wire transfers!
This also makes transactions much faster than if someone were paying via credit card. Those types of payments take days before funds show up on the seller’s end. Bitcoins, on the other hand, can be transferred within minutes anywhere around world without needing access to financial institutions such as PayPal (who, btw, charges high transaction rates between countries due to conversion rate differences across currencies).
Invest In Bitcoin Stocks or ETFs
Another way to answer the question of how to make money by investing in bitcoin is by trading bitcoin stocks or bitcoin-related ETFs.
This is like buying and selling bitcoin on bitcoin exchanges. However, instead of trading actual bitcoins, you’re trading shares of a company that owns bitcoin, a company that tracks bitcoin’s price fluctuations, or a company that services bitcoin investors (like Coinbase mentioned above).
You can use this method as a swing trader, long-term trader, or even a day trader.
The advantage to this is you don’t have the risk associated with trading bitcoins on an exchange. Instead, you’re investing in companies listed on the more traditional (stock) exchanges. There is still risk involved in investing in bitcoin by trading publicly traded companies. As the price of bitcoin can fluctuate, the price of the shares trade by these companies can also fluctuate. This means you can make you money but also lose money.
While there weren’t many bitcoin-related companies to invest in a few years ago, today there are more opportunities. Some of the bitcoin-related companies you can invest in today include Bitcoin Investment Trust (GBTC), Bitcoin Services, Inc. (BTSC), and Riot Blockchain.
The first cryptocurrency company is a trust that invests exclusively in bitcoin. The other two focus on mining bitcoins or providing services to companies who mine them for profit.
Let’s look at some data on how the price of each of these companies has changed since they became publicly traded companies.
As you can see, investing in bitcoin-related companies is a very viable way to make money by investing in bitcoin.
If you want to get started trading these bitcoin-related companies, you can do so easily through the Robinhood app. It allows you to invest in the stock market without paying any trading fees. What’s more, if you sign up through this link, you’ll get a free stock (maybe even one of these bitcoin ones).
Start Mining Bitcoin
This next way of making money with cryptocurrency isn’t something that most people will be able to do.
You might have heard the term “mining bitcoin” or “bitcoin mining” before, but you might be unsure what it means. Bitcoin mining refers to the process of confirming transactions on the bitcoin network.
Bitcoin mining works by solving complex math problems using computing power. When you solve one problem, your reward for doing is bitcoin. The more bitcoin miners trying to mine means less chance others have in getting their solution correct first. This makes it harder than ever before to get bitcoins! In addition, mining bitcoin takes a lot of computer processing power and electricity, so it’s not something that most people will be able to do. You might even have to become partners with someone else to do this efficiently.
I’m not going to go into what it takes for you to mine bitcoin because that would take an entirely new article (or more) to explain. If you’re interested in learning more about mining bitcoin and investing in computers and other hardware to help you, check out this article.
Lend Out Bitcoin
Over the past few years, many sites have popped up that provide ways for people to lend money to other people without having to go through banks.
These loans use fiat money. However, there are new websites and apps which allow you to lend your bitcoin to someone else in return for earning interest on that loan.
Bitcoin lending works by sending your bitcoin to a particular site. That site will lend it out to a borrower for a predetermined period of time. You can then choose how much interest you’ll earn on that loan (usually it’s between 0% and 12%).
The borrower then pays back the loan plus an additional percentage. This is usually to cover any administrative costs associated the app or site incurs. The cool thing about this model is that the person who lent bitcoins earns money when someone borrows and also by collecting a specified amount off every repayment made! It’s like getting paid twice.
One company in particular that is popular for bitcoin peer-to-peer lending is Bitbond. Bitbond has been around since 2013 and has a lot of satisfied customers. The company is in Germany but has an international presence with offices all over the world, including London, Berlin, and New York City. They offer loans in various amounts.
Remember that risk exists with peer-to-peer lending (with bitcoin or fiat currency). Always remember, the higher the risk, the higher the reward. If you’re not convinced, read some reviews of the bitcoin lending company BTCjam. It started in 2012 and then shut down in 2017. More than a few people lost their bitcoins.
Write About Bitcoin
One of my favorite ways to make money by investing in bitcoin, especially in 2021, is to write about bitcoin.
Bitcoin is a relatively new technology which not a lot of people fully understand. Because of that, there’s a lot of misinformation about bitcoin. In addition, there are a lot of publications looking for people to write about bitcoin and explain it to their readers.
If you like writing and can explain things like bitcoin, consider pitching your articles ideas to mainstream and niche publications. Bitcoin and bitcoin-related news is only going to get more prominent. These publications will need writers who understand the data and know what they’re talking about. If you have experience with cryptocurrency (even a little), you’ll be able to produce awesome content.
The more mainstream publications publishing articles on bitcoin include Forbes, Entrepreneur, and The Huffington Post. These are all great places for writers who have the knowledge of this new technology and can explain it to the masses.
If you’re interested in writing for niche publications, check out Bitcoin Magazine or CoinDesk. These produce content solely dedicated to bitcoin and cryptocurrency news in general. There’s more niche-specific blogs on the internet about cryptocurrencies like Ethereum if interested! No need to limit yourself to just bitcoin.
And who knows, maybe you can negotiate your payment in cryptocurrency!!
Become a Bitcoin Masternode
OK, I’ll admit. This sounds like something out of Star Trek but trust me, it’s actually a method you can use to make money with cryptocurrency.
Before I explain how to make money this with master nodes, though, it’s important that I first explain what a bitcoin masternode is. A bitcoin masternode is a node on the bitcoin network that performs essential functions. Masternodes are a type of full-node. They store and transmit complete copies of all transactions to other nodes for them be verified as valid (and not double spent).
Remember how I mentioned earlier that one of the advantages of using bitcoin is that payments can be instantaneous? Well, that’s because of these masternodes which verify transactions and speed them through the network.
As you can imagine, this is no small task. In fact, maintaining this service requires a high level of investment. It uses incredible bandwidth on your internet connection. People who use their bandwidth to become masternodes need compensation. This is where the making money part comes in to play.
The monetary incentive for becoming a bitcoin master node can be lucrative. However, it’s not without risks.
If you’re interested in becoming a bitcoin masternode, check out this article. It explains how to do it and how you can make a passive income from it. (The article is from 2018 but has some good information that you can use as a springboard.)
Sign Up for Bitcoin Faucets
If you want a super easy way to make money with crypto, and don’t have any money to get started, start by signing up for crypto faucets.
Bitcoin faucets are sites that offer bitcoin in exchange for completing tasks. These tasks include watching videos, playing games, looking at ads, or solving captchas.
Faucets are easy to get started with investing because they don’t require any money. That also means that the payout is usually pretty low (usually around $0 .001 per hour). You can use any free time you have on your computer each day to do this. Imagine doing it while working from home doing other things like checking email. It can add up over time!
Over the past few months, more of these bitcoin micro purchasing opportunities have popped up. It remains to be seen how many will still be around after a year or so. Like I said, though, it’s an easy way to get started on your bitcoin journey, especially if you don’t have a lot of money to start. (And if you like watching ads, even better!)
I don’t have a lot of experience with faucets but if this is something that you want to take a look at more in-depth, do a simple Google search on “bitcoin faucets.” You’ll have plenty to start looking at.
Here’s a good video that talks about some of the best cryptocurrency faucets for 2021:
Earn Bitcoin Through Affiliate Programs
Making money through affiliate sales is one the oldest ways to make money online. As such, it’s no coincidence that it’s also one of the ways that you can make money by investing in bitcoin.
If you’ve never heard of affiliate sales or affiliate marketing, let me explain.
Affiliate marketing is getting paid for promoting a product or service.
A good example of this is when someone clicks on an ad to buy something. After clicking on the link, they’re taken to the product page and they make a purchase. The person who put up that ad gets a commission for every sale made from the link. This could be anywhere from 1% to 75% of the sale price of the product or service.
The same principle applies to bitcoin. There are lots of companies that will pay you in bitcoin to promote their bitcoin services. For example, one of the companies I use to invest in bitcoin is CoinBits. I’ll talk more about this company below, but it’s a website that allows you to round up purchases you make with your credit or debit card. You can then and invest those round ups in bitcoin. For me, it’s another opportunity to invest in bitcoin.
I like it so much that I’m an affiliate for the site. Anytime someone signs up with the service through my link, CoinBits will deposit an extra $5 worth of bitcoin into my account. Pretty cool, right?
Is It Worth It To Invest In Cryptocurrency?
Now that we’ve looked at some of the ways that you can make money by investing in bitcoin, the question remains — Is it worth it to invest in bitcoin?
Nobody can predict what will exactly happen in the financial markets on any given day. Lots of people have excellent plans and trading strategies, but those aren’t always right.
The same is true for bitcoin and all the other cryptocurrencies out there. You can only know if investing in crypto is worth it by doing your own research. You’ve got to do due diligence and research before making any decisions that could leave a hole where your money used be!
I’m not a financial expert and as I mentioned at the start of this article, this isn’t financial advice.
For me, investing in bitcoin and other cryptocurrency is definitely worth it. Again, let’s look at bitcoins growth chart over the past 12 years.
Pretty impressive, right? And while past performance is not guarantee of future earnings, it is a good sign of what is possible. Cryptocurrency is only becoming more mainstream. As it does, the price will continue to increase. The question is whether you’ll be in a position where you can make money from that potential increase.
Crypto-investing all depends on your personal circumstances – are there any risks involved? What’s your financial situation like right now? Do you have enough money saved up? How much risk are you willing to take when considering this investment opportunity vs others available at present moment? Can you afford to lose your entire investment?
Answer these questions and you’ll be better poised to make money by investing in bitcoin.
Where Can I Start Investing in Bitcoin?
Now that you’ve made it this far, you might want to start investing in cryptocurrency. If you’re like most people, the next question is where to start investing?
There are major companies that have realized the possibilities available due to cryptocurrency. This makes easier than ever to get started investing in bitcoin.
Let’s talk about a few of the major players.
Earlier I mentioned CoinBits. CoinBits is a company that makes it easy to invest in bitcoin. They offer an easy-to use interface for buying Bitcoin with your credit card or bank account.
How it works is you connect your bank account and/or credit card(s) to your CoinBits account. You then set a round up amount (anywhere from 1 to 5 times the amount that is being rounded up).
When you spend money with that debit or credit card, the round up amount gets transferred to your CoinBits account.
This makes it super easy to start investing in bitcoin because it’s all hands off. You don’t have to do anything beyond the initial setup. Everything happens in the background. When you log in to your account, you can see how much you invested, how much $$ worth of bitcoin you have, and your percentage gain.
For example, check out the screenshot from my CoinBits account below:
As you can see, I’ve invested over $700 and have made over $2,000!! And the great thing was that this happened without me having to do anything. It is a simple way to get started with bitcoin investing.
Everyone knows what PayPal is but many don’t know you can invest in bitcoin from your PayPal account.
Currently, you can buy, sell, and hold the follow cryptocurrencies through PayPal:
- bitcoin cash
If PayPal is in the crypto game, you know it’s going mainstream. Even my dad, who just turned 70, started investing in bitcoin through his PayPal account this year.
Another company that has recently gotten into cryptocurrency is CashApp. If you’re not familiar with CashApp, it is a mobile payment system like PayPal. You can use it to pay others and receive payments.
However, you can also use it to invest in stocks and bitcoin. One thing I like about CashApp is that you can set up a weekly auto investment into your bitcoin account. That makes it easy to set and forget while slowly adding to your bitcoin holdings.
CashApp recently added the ability for some users with a Coinbase account or other cryptocurrency wallet linked on their CashApp profile page to send bitcoin from within its app.
The last company I want to mention is Fold. In essence, Fold is a company that allows you to earn bitcoin by buying gift cards.
You can do this through both the Fold website and Fold app. Every time you buy a gift card (which are discounted, some more than others), you earn Satoshis. Satoshis are the smallest unit of bitcoin. Once you earn 50,000 Satoshis, you can transfer the amount to your own crypto wallet.
I mention this here is because this is going to be a trend that gets bigger over time. More and more companies will allow you to earn bitcoin “rewards” for using their credit cards. Fold seems to be on the cutting edge of this idea.
The company is releasing a Fold prepaid card that you’ll be able to use in store. This will allow you to earn Satoshis without having to buy online gift cards. If you’re interested in getting on the waiting list, you can use my link here. If you do download the app, you’ll be able to spin a wheel everyday where you have a chance to win a whole bitcoin!
In conclusion, making money by investing in bitcoin is a real possibility. There are lots of different opportunities and you don’t have to start with thousands of dollars. In the true sense of Dollars From Cents, you can get started investing in bitcoin with zero dollars. The point is to just start.
FAQ – How to Make Money by Investing in Bitcoin
Can You Make A Lot Of Money With Bitcoin?
Yes, you can.
Is Bitcoin A Good Investment?
I think it’s a good investment and there are many reasons why this could be the case. Read the article above for more information.
How Do You Make Money With Bitcoin?
There are many ways to make money with bitcoin. One way is by investing in it and another one would be through mining bitcoins. Read the article for a full list of different methods on how you can earn from this cryptocurrency, including some that might surprise you.
Can you lose money from bitcoin?
Yes, just like any investment, it’s entirely possible for you to lose your money by investing in bitcoin.
What’s the minimum amount of money you need to invest to get started in bitcoin?
With all the new opportunities to invest in bitcoin, there is no minimum amount of money you need to invest in bitcoin.
What’s the best way for me, as a newbie investor who doesn’t know much about cryptocurrency and investing, to get started?
Read this article 🙂
Who owns the most bitcoin?
Satoshi Nakamoto owns the most bitcoin. It’s estimated that Satoshi owns just over 1 million bitcoin.
What is a Bitcoin IRA?
A “Bitcoin Ira” or Individual Retirement Account, allows you to invest in bitcoins as part of your retirement plan and defer paying taxes until distribution time (usually age 59½). You can also use it if are not eligible for an employer plan.
How many bitcoins are left in the world today?
There are about 16.75 million bitcoins left in the world today
What is bitcoin?
Bitcoin (BTC) was created as a peer-to point electronic cash system that would allow individuals to send money without going through banks or other financial institutions, and it has grown into an investment vehicle for those seeking diversification of their portfolios.