How to Make Money From Bitcoin in 2022

Since its inception in 2009, Bitcoin has grown in popularity as a means of fostering cross-border payments without centralized oversight. Although the identity of its founder is still shrouded in mystery, this digital currency has become accepted by public and private institutions as a means of transaction.

For an average user, the crucial question is, How can I make money with cryptocurrency? The answer is nuanced, and this piece will consider the myriad opportunities for making money through BTC in 2022.

Bitcoin Overview

It will be impossible to understand Bitcoin (or BTC) without considering its root technology, cryptography. Cryptography is a technology derived from advanced mathematical concepts that help to encrypt digital information to secure the data. Like many other cryptocurrencies, Bitcoin uses cryptography to keep transactions secure, trustless, and pseudonymous. Everything from the seed phrase to the private and public keys is cryptographically designed.

A Brief History of Bitcoin

Bitcoin was created in 2009 by the person(s) with the pseudonym Satoshi Nakamoto. Although it is believed that the crypto asset was created in response to traditional institutions’ role in the financial crisis of 2008, several pieces of evidence point to Satoshi already working on the project before the global meltdown.

Bar the complex technical explanations, the roles of BTC are to rival traditional currencies like the US Dollar in cross-border payments and to create an alternative store of value.

Bitcoin uses the proof-of-work consensus mechanism to verify transactions through a process called mining, and its popularity means miners using sophisticated computers have to compete with each other on who will mine the next blocks.

In the years following Bitcoin's creation, the cryptocurrency market expanded rapidly with the introduction of new cryptocurrencies, including Ethereum. Launched in 2015, Ethereum introduced smart contracts and decentralized applications (dApps), broadening the use cases of blockchain technology beyond just a digital currency.

As Bitcoin and Ethereum grew in popularity, so did the number of crypto platforms. These platforms, including crypto exchanges and wallets, allowed users to buy, sell, and store their digital assets. They played a crucial role in making cryptocurrencies accessible to the average person and contributed to the mainstream adoption of these digital assets.

Over the years, BTC has evolved from being a fringe asset to a mainstream investment vehicle. Its rise in popularity has led to increased acceptance by public and private institutions as a legitimate asset class. Despite the volatility and regulatory challenges, Bitcoin continues to be a popular choice for investors looking for high-reward, albeit high-risk, crypto investments. Despite its relatively short existence, Bitcoin has had a significant impact on the global financial system and continues to shape the future of digital finance.

Can Bitcoin Be Viewed as Money?

To answer this question, let’s define what money is. One generally accepted definition of money is ‘anything that is viewed as a means of economic exchange.’ In simple terms, money is a tool for value exchange.

Bitcoin falls under this definition and therefore can be viewed as money. Some of the early use cases back to value exchange on the dark web, and in its early days, it was famously used by an early adopter to purchase pizza. Nowadays, even real estate deals and e-commerce purchases can be completed with Bitcoin, and some countries accept it as legal tender.

Despite these use cases, some economists still refute the claim that Bitcoin is money. Some of their displeasure revolved around:

Supply

Economies have flexible growths, and unexpected occurrences like natural disasters or pandemics can often throw nations off balance. To mitigate the occurrences, countries need to either increase the supply of money in circulation (quantitative easing) or reduce the supply of money in circulation (quantitative tightening). Bitcoin’s fixed total supply makes it unsuitable for such uses.

Usage

Bitcoin, the pioneering digital currency, has seen a significant increase in usage since its inception. As of early 2023, BTC continues to dominate the cryptocurrency market with a significant market capitalization of $568 billion. The number of daily BTC transactions on cryptocurrency exchanges is also noteworthy. In September 2022, there were approximately 268,971 Bitcoin transactions taking place daily.

Despite that this number is expected to grow even further, only over 4% of the global population (or 10% of people aged 16-64) use cryptocurrencies. This number is much lower compared to the usage of the dollar, for instance. The share of the U.S. dollar in total transaction value is more than 50%. Another pressure point is how Bitcoin will thrive (throughput perspective) if the entire world uses it.

How to Make Money Investing in Bitcoin - Sixteen Primary Ways

Bitcoin has been around for over a decade now. In that time, it established itself as a secure, decentralized form of value exchange. While the value of BTC can be volatile, it has shown consistent growth over the years, and people have explored different means of how to make money with Bitcoin.

Below are eighteen proven ways to do so.

Bitcoin Mining

Bitcoin mining involves verifying transactions on the blockchain to earn mining rewards. It requires solving complex computational problems, with successful miners adding the next block to the chain and receiving BTC as a reward.

Nowadays, miners often join a mining pool, a group of miners who collaborate to solve blocks. The rewards are then distributed among the pool members based on their contribution. This approach makes mining more predictable and potentially more profitable for individual miners.

Bitcoin mining can be a profitable long-term investment. However, it's essential to consider the costs of mining hardware, electricity, and maintenance. Also, the fluctuating price of Bitcoin can affect mining profitability.

After mining a block, the BTC reward is directly sent to the miner's cryptocurrency wallet. This digital wallet is where miners store their BTC securely. As with any investment, potential miners should do thorough research and understand the risks before starting.

Buy & Hold Bitcoins

Buying and holding bitcoin is perhaps the easiest of all the investment strategies. Although it is easy to do, it still requires a holistic knowledge of market timing. Here, the strategy involves buying Bitcoin during a market drawdown, holding it in anticipation of the next market cycle, and selling it when the price has increased. It is from this strategy that the phrase “buy low, sell high” was coined.

Become an Affiliate–Earn Bitcoin

Some crypto exchanges run affiliate marketing. By affiliate programs, you can receive commissions for introducing the people to the exchange. However, it is important that you verify the platform you want to promote to avoid selling spammy products and losing your reputation.

Lend Bitcoin

It is boring to hold your Bitcoin in a bitcoin wallet, waiting for a change in market sentiments, isn’t it? There is a way you can earn passively on your Bitcoin holding. It is called lending Bitcoin.

Bitcoin lending involves putting your Bitcoin in the pool of a credible crypto lending platform. Borrowers take the crypto and return it with some interest. The interest is then shared amongst all the participants in the pool, according to how much they have in it. The only caveat to this lending is that you should choose reputable websites to decrease credit risk.

Micro Earnings

Although this method will not make you a fortune; it might still be worth exploring. Some pay-to-click websites offer rewards in Bitcoin for minor tasks like clicking on ads or playing online games.

Trading

This is one of the most popular methods of making money on crypto assets. Making money with Bitcoin trading involves profiting from the crypto’s volatility. Some of the strategies include:

• Day Trading: This is when a trader opens a position and closes it within one day. Another name for this form of trading is Intra-day Trading.
• Trend Trading: This type of trading seeks to profit off sentimental analysis of the market. When the market is bullish, you open a long position. The same happens when it is bearish.
• Shorting Bitcoin: Shorting Bitcoin is opening a short position with the view that Bitcoin price will drop. The trader then profits from the Bitcoin’s move down.
• Leverage trading: Also called Margin Trading, leverage trading involves borrowing money from your exchange to increase your position. It is a good way to amplify your earnings. However, it’s also a riskier approach to trading where the losses can be more substantial than in the regular spot trading.

Play Crypto Games

Do you have a knack for playing games? If yes, you can earn some Bitcoins doing so. Games like PowChess and some adventure games allow players to earn extra crypto while doing what they love. There are some other crypto games, like Axie Infinity, that you can convert the game’s token to Bitcoin and sell.

Dropshipping

Apart from accepting Bitcoin as a means of payment on your online store, you can also earn gift cards for trading Bitcoin on platforms like Paxful. These cards can purchase items in online retail stores at a discount and resold for their actual price. It's like if you want to sell Bitcoins for cash, actually.

Run a Lightning Node

A lightning node is a code or software connecting a lightning network to the main blockchain.

A lightning node differs from the complete nodes in that while the latter approves all transactions on the blockchain, the lightning node only needs to confirm the most recent transactions.

Making money from the lightning node is possible when someone uses your lightning route to validate transactions.

Host a Master Node

Master nodes are servers that host the full transaction history of their blockchains and can be used to perform anonymous transactions and ensure transactions are completed in real-time. Although Bitcoin does not use master nodes, it could still be a way to earn from some other blockchains like Dash. People who host master nodes are rewarded with newly minted coins.

Earn Cashback On Credit Card Purchases

There has been a mass transition of traditional finance companies into cryptocurrencies, and one incentive they give users is rewards in Bitcoin. BlockFi and the Visa credit card are good examples of how to use Bitcoin to make money.

Bitcointalk

Bitcointalk is an online forum for the Bitcoin community. Founder Satoshi Nakamoto created it in November 2009 for people to discuss the technical details relating to Bitcoin.

There are three primary ways to make money with Bitcoin through Bitcointalk.

1. Participate in a signature campaign.

2. Join a bounty campaign.

3. By selling your service.

• Signature Campaign:

One way to earn money from Bitcointalk is through the signature campaign. On the forum, every post has a segment called the user's signature. This is like the user’s trademark. Brands can pay the user to put their advertisements in the signature space. Higher the rank of the profile, the more can user earn from a signature campaign.

• Bounty Campaign:

There are occasional bounty campaigns organized on the forum, allowing you to earn by completing certain tasks. Earning from bounties requires patience, as the payment is seldom late. This method also typically requires you to have a high-rank profile.

• Sell Products/Services

You can also earn from Bitcointalk by selling on their marketplace. People usually buy services better than products, so bear this in mind when trying to do your pitch.

Bug Bounties

Security is a major issue in the blockchain industry, and with new vulnerabilities being discovered every day, several protocols have put up bug bounties to reward bug discovery. They pay you for discovering vulnerabilities in the protocol and can even employ you to join their engineering/software security team. Getting paid through this means requires in-depth technical knowledge of blockchain infrastructures.

Earning Through Tips

One surefire way of how to make money using Bitcoin online is through tips. Websites like Bitfortip link buyers and sellers together, and sellers can get paid for writing articles, whitepapers, and promoting platforms. Crypto influencing can also fall into this category, as several influencers are paid to promote Bitcoin exchanges to their social media audience.

Bitcoin Faucet Websites

For people looking to earn bits of Bitcoin with little work, Bitcoin faucet websites might be the go-to platforms. Crypto faucets are websites that offer you rewards in Bitcoin for performing certain tasks. The key here is consistency, and thankfully, there are several Bitcoin faucets to choose from.

The only steps required to earn from faucets are choosing one, verifying its authenticity, registering, and getting paid. Quite simple, isn’t it?

Retrodrop Hunting

Retrodrop hunting is a relatively new and exciting way to make money with digital assets. It involves seeking out and claiming "retroactive airdrop", or "retrodrop". This is the kind of crypto airdrop that is distributed to users who have interacted with a particular blockchain protocol or platform in the past.

For instance, if you've used a Bitcoin wallet or participated in a Bitcoin-based decentralized finance (DeFi) protocol, you might be eligible for a retrodrop. The BTC you receive can then be sold for profit or held as a safe investment.

However, it's important to note that not all retrodrops are legitimate. Some are scams designed to trick users into revealing their private keys. Always do your research and ensure that the retrodrop is from a reputable source before claiming it.

Testnet Participation

Participating in Bitcoin's testnet can also be a profitable venture. Testnets are separate blockchain networks used by developers to test new features and upgrades before they're launched on the mainnet. By participating in a testnet, you can earn Bitcoin as a reward for helping to test and validate these new features.

Some projects offer generous rewards for testnet participation, especially if you're able to identify bugs or vulnerabilities. These rewards can often be claimed as Bitcoin on the mainnet once the testing phase is over.

Participating in a testnet requires some technical knowledge, as you'll need to set up a node and interact with the testnet blockchain. However, it can be a great way to learn more about blockchain technology and earn money with crypto assets at the same time.

Become A Bitcoin Consultant

Despite the number of resources explaining cryptocurrencies and how blockchain technology works, many topics are untouched or hastily addressed. One good way to make millions with Bitcoin is to learn about cryptocurrency and other related topics like cryptography and DLTs. From there, you can organize a seminar or produce a course explaining how it works to people. This method can be useful if you are a talented orator or have a unique way of teaching. One major advantage of this method is that there are already-existing structures to help you create and promote your course with little to no stress.

A Word of Caution Before You Start Earning or Trading Bitcoin

Bitcoin trading is a lucrative way to earn. Still, it's not without its own risk. Here are certain things to note before you trade Bitcoin.

Analyze The Factors Affecting Bitcoin’s Price

Certain factors have huge effects on the price of Bitcoin. Some of them are.

1. Supply Cap

The supply of Bitcoin is capped at 21 million BTC, and this supply constraint might increase the price of Bitcoin when there is more-than-usual demand. It is expected that Bitcoin’s price will go up further once the total supply of Bitcoin has been mined.

2. Institutional Adoption

When institutions decide to buy cryptocurrencies, the price of Bitcoin shoots up. Similarly, when an institution announces a reduction in its Bitcoin holdings, the market grows skeptical, pushing the price of Bitcoin down.

3. External Factors

Several external factors can affect the price of Bitcoin. Things like government regulation, security breaches, or even macroeconomic news can influence the price of Bitcoin.

Choose A Way You Want To Get Exposure

1. Spot Market

Crypto exposure through the Spot market is for people who only want to buy and hold their cryptocurrencies. Fees, security, and ease of use are three things people consider when choosing an exchange to buy their cryptocurrencies from.

2. Derivatives Market

If you want to do more than buying and holding, trading the derivatives market is your sure bet. This way, you can predict the future price of Bitcoin using Bitcoin futures, Options, or Perpetual futures. Derivatives can also be good for hedging the market and getting leverage.

Know Your Limits

Do you know your risk tolerance level? Bitcoin can be very volatile, and knowing how much you can risk will prevent unnecessary heartaches when the market fluctuates excessively.

Keep A Watch On Your Trade

Trading can be a side gig, but when there is so much money on the line, it should not be treated casually. Despite these, there are ways to avoid always looking up the charts. Copy trading and automated bots trading are two good ways to help you make profits without actively trading. However, both trading types should be treated with caution.

Close the Position to Generate Profit or Cut a Loss

You should close your profits if your projected profits have been reached. The same goes for capping your losses. A good way to automate this step is to set your Stop loss and Take profit before you start a trade. These acts prevent you from getting emotional when trading and can allow you to go off the screen without fear of being margin called.

Why Consider Earning Bitcoin?

The current macroeconomic factors are nothing to be desired. Inflation is rising in several countries, supply chains are being restricted, and cross-border payments are still inefficient or expensive. Earning Bitcoin might be a way of escaping some of these problems and you can pick up some of these less laborious tasks to earn passively.

Bitcoin Bubbles Examples

Bitcoin has experienced several periods of volatility. Although most of them are short-lived, the percentage drops are substantial. Let’s briefly consider some of the biggest Bitcoin corrections since its inception.

1. 2011 Bubble

In a season known as the Dollar Parity Day, Bitcoin hit the $1 mark on February 14 due to increased popularity. The cryptocurrency lost almost 40% of its value a month after, settling down at 0.67. From that low, it picked up steam, rising by almost 4,000% to its June high of $29.58. The crash after that was unprecedented, as Bitcoin lost over 90% of its value.

2. 2013 Bubble

Bitcoin hit an all-time high of over 1,000 in November 2013 ($1,127) but corrected by almost 90% by January 2015 ($172).

3. 2017 Bubble

This bubble might not be the grimmest in Bitcoin’s history, but the number of people caught in the ‘Initial Coin Offering’ mania made it notable.

New projects and coins were restlessly popping up, each with the promise of a spectacular platform that will change the world. Bitcoin kept riding the wave until it hit $19,665 by December 2017. One week from its all-time high, the cryptocurrency lost 25% of its value, and exactly a year later, the cryptocurrency bottomed at about $3,164.

4. 2021 Bubble

With global economies locked down in 2020 because of the coronavirus and stimulus cheques rolled out, there was a surge in the purchase of cryptocurrencies. Bitcoin rallied to $69,000 a year later, and other cryptocurrencies followed suit, hitting all-time highs. There has since been a burst in the bubble, and Bitcoin dropped to the $18,000 price.

Threats vs. Opportunities

Having explained how to make money on Bitcoin, let us consider the threats and opportunities that exist when you decided to buy Bitcoin.

Opportunities

• Great potential

Bitcoin’s global availability, security, and low fees have all primed it as a good means of fostering cross-border payments. There are also no extra costs (like bank charges) attached to sending Bitcoin, one only has to pay transaction fees that are typically a few cents.

• No third party

Bitcoin blockchain allows trustless transactions without a need to rely on any third-parties that would be responsible to carry out the payments.

• Store of Value

As seen in many third-world countries, Bitcoin can be a good way to store value from the hungry jaws of inflation. The places with the largest crypto adoption have been developing countries, and that trend is not poised to change soon.

Threats

• Volatility

Bitcoin can be volatile. Buying at the wrong time can be disastrous also, and you should know this before making your Bitcoin purchases.

• Regulations

Most governments are indecisive on how to regulate cryptocurrencies. Any negative government regulation is an enormous threat to the growth of cryptocurrencies.

• Overleveraging kills

When trading, you need to ensure proper risk management, including Stop loss and Take profit orders.

The Bottom Line

Earning from Bitcoin, either actively or passively, is possible, and with the right amount of work, you can earn enough to live comfortably. Go through these options again and pick the ones you are best suited to do. With time, the results will flow in.

FAQ

• Can you really make money with Bitcoin?

Yes. There are different ways to make money with Bitcoin, and they differ in their difficulty level.

• How to earn money with Bitcoin?

Several examples have been given above on how to make money using Bitcoin. The popular ones involve trading and Bitcoin mining.

• How does Bitcoin make money daily?

There are different ways on how to make money daily with Bitcoin by running nodes or doing basic tasks for little returns.

• Can You make money with Bitcoin in 2023?

Yes. Most of the highlighted ways of making money through Bitcoin are not time-specific. If there are other new ways of earning Bitcoin, there will be a follow-up to this piece.

• How do you make money with Bitcoin and zero capital?

Earning Bitcoin through tips or joining Bitcoin faucets requires no capital and can be a good way to earn Bitcoin.

• How do you make money on Bitcoin?

There are different known ways of making money on Bitcoin. Lending cryptocurrency can be suitable if you have Bitcoins.

*This communication is intended as strictly informational, and nothing herein constitutes an offer or a recommendation to buy, sell, or retain any specific product, security or investment, or to utilise or refrain from utilising any particular service. The use of the products and services referred to herein may be subject to certain limitations in specific jurisdictions. This communication does not constitute and shall under no circumstances be deemed to constitute investment advice. This communication is not intended to constitute a public offering of securities within the meaning of any applicable legislation.