Bitcoin, the primary cryptocurrency, can also serve as a valuable money-making asset in addition to its status as a digital currency. The Flagship cryptocurrency, launched in 2009 by Satoshi Nakamoto, has assumed various roles for its end users, ranging from serving as a store of value to a means of making a steady income.
Bitcoin’s multifaceted use cases expand its global adoption as various users acquire the asset for multiple reasons. However, as envisioned by its founder, the primary use case for Bitcoin is a means of exchange designed to replace fiat money and facilitate lightning-fast cross-border payments.
Today, the primary driver of Bitcoin’s global adoption is its decentralization rather than its potential for generating wealth. Crypto assets gain widespread adoption because they are not controlled or influenced by any overbearing centralized authority. The lack of influence from major banking institutions on digital assets makes them appealing to users seeking to bypass intermediaries. Additionally, Bitcoin can serve as a hedge against inflation in countries with weak currencies.
As a money-making asset, Bitcoin is also a strong driver of its global adoption. Bitcoin and other cryptocurrency assets have minted millionaires and amassed a fortune for a handful of people in a remarkably short time. This article will thoroughly explore how to earn Bitcoin and make money with Bitcoin. The focus is solely on Bitcoin and not on other assets.
Buying and Holding
This is the most basic way to make money with Bitcoin and is responsible for some of the early millionaires in the cryptocurrency industry. Buying and holding, or “HODL,” refers to purchasing Bitcoin at a lower price and holding it until the price appreciates. The simple strategy leverages Bitcoin’s long-term price appreciation.
This strategy worked well for early investors, such as the Winklevoss twins, who started acquiring Bitcoin when it sold for $8 per coin in 2012. The twins became billionaires by 2021 when Bitcoin’s price appreciated by over 1,000%.
Buying and holding Bitcoin, despite being a formidable strategy, no longer yields substantial returns like it did for early investors. Bitcoin’s price at the time of this report is $93,000, a far cry from its prices in 2011 and 2012. The cryptocurrency market has matured over the years, and achieving such steep returns is becoming increasingly difficult.
However, analysts and founders still share strong optimism about the future appreciation of Bitcoin’s price. Strategy founder Michael Saylor has become a symbol of such optimism, stirring his business intelligence firm to become the largest corporate holder of Bitcoin in the world.
Bitcoin Trading
Trading Bitcoin is another way to make money with it, best suited for individuals with technical expertise, trading experience, and a keen eye for detail. Trading Bitcoin as a strategy involves leveraging its price fluctuations on both short-term and long-term bases, capitalizing on price differences to generate a profit. Bitcoin trading comes in variations, differing in duration and strategy.
- Day Trading: Frequent trades within a day, capitalizing on short-term price movements.
- Swing Trading: Holding for days or weeks to capture larger price swings.
- Arbitrage: Exploiting price differences across exchanges (e.g., buying low on Kraken, selling high on Binance).
- Bitcoin Futures and Options Trading: This involves Trading Bitcoin derivatives on platforms like CME Group or Deribit and betting on future price movements without owning BTC. Options allow you to buy or sell at set prices, while futures involve price contracts.
Bitcoin trading can be lucrative and yield instant high returns, but it requires a deep understanding of the market and extensive trading experience. Like all other forms of trading, bitcoin trading can be risky, with double-digit losses frequently occurring. However, it remains one of the low-entry-barrier ways to make money with Bitcoin.
Bitcoin Mining
Bitcoin mining is the process of creating new tokens on the Bitcoin blockchain by solving cryptographic puzzles. Miners earn Bitcoin (BTC) for mining a new block, and their earnings are halved every four years to maintain Bitcoin’s scarcity and value.
Bitcoin mining is a technical means of making money with BTC. It requires equipment and has a higher entry barrier than the previous two methods mentioned above. Miners utilize specialized hardware, known as ASIC miners, to solve cryptographic puzzles, validate transactions, and receive block rewards. As of today, the current mining reward is 3.125 BTC per block, following the last halving event in 2024.
Top mining firms, such as Marathon Digital and Riot Platforms, have generated substantial profits by mining Bitcoin on a large scale. Riot Platforms, Inc. reported total revenue of $376.7 million for fiscal year 2024, representing a 34.2% increase from $280.7 million in 2023. On the other hand, Marathon Digital Holdings, Inc. reported a total revenue of $564.1 million for fiscal year 2024, a 45.6% increase from $387.5 million in 2023.
Mining as a means of generating income with Bitcoin faces significant challenges stemming from its high energy consumption and declining profits for miners. Additionally, Bitcoin mining is restricted in certain countries due to energy shortages.
Bitcoin as a Means of Exchange
Retailers and merchants can now accept Bitcoin in exchange for their goods and services rather than fiat currency. They can sell the BTC at a favorable price or keep it for long-term appreciation. Many American businesses already utilize this method to generate revenue with Bitcoin, leveraging processors such as BitPay or Coinbase Commerce. The strategy also aligns with the lightning-fast cross-border payments envisioned by Satoshi Nakamoto, in which Bitcoin replaces FIAT.
Retail outlets such as Overstock, Starbucks, Whole Foods, and Spar accept Bitcoin for their goods, utilizing various processors. However, given the volatility of Bitcoin’s price, the long-term sustainability of this strategy is in question.
Other means of earning money with Bitcoin exist, but are not as mainstream as the ones listed above. They include creating Bitcoin-related content, operating ATMs, microtasks, faucets, and Bitcoin affiliate marketing.
Bitcoin, at its core, remains a means to store value and a digital asset. However, the token can also be used to generate income through various strategies by users ranging from newbies to market experts with extensive trading experience. Bitcoin is currently trading at $93,000, slightly recovering from its slump last month, during which the token dropped below $80,000.
