Source: Token Metrics

The crypto industry is a marketplace for money-making opportunities that individuals can explore. Depending on personal preferences, risk tolerance, and experience, various strategies and activities can be used to make money in the cryptocurrency space.

Common Ways People Make Money in the Crypto Space

INVESTING

Like other physical assets like real estate, stock, etc, cryptocurrencies are regarded as assets that can be invested in the long term for profit purposes. Investing in cryptocurrencies involves buying and holding cryptocurrencies for a long time (months, years) in the hope of price appreciation. Investors usually carry out fundamental and technical analyses to evaluate the long-term potential of any cryptocurrency before the decision to invest. Long-term investors need to have strong convictions about the tokens they invest in to be able to hold their tokens for a long amount of time.

INCENTIVIZED TESTNET

Testnet is a phase in the life cycle of crypto projects where projects launch their platform with features to allow users to test them out before launch on the main network (mainnet). Some projects incentivize their testnets to encourage participation. These projects reward testnet participants by airdropping their newly launched tokens to their addresses.

TRADING

Cryptocurrency trading is the process of buying cryptocurrencies to sell them off after a short period while making profits from the price fluctuations between when the token was bought and sold. Trading requires strategies and analysis (fundamental, technical, and sometimes sentimental). It is a risky way to make money. While there is potential to yield good profit from trading, there is always the possibility to lose all of it in just a few minutes. It is always advisable to DYOR before trading. Unlike investing, trading requires active eyes on charts.

LIQUIDITY PROVISION

Liquidity provision involves depositing cryptocurrencies into decentralized finance (DeFi) protocols and decentralized exchanges to earn rewards generated from trading fees. Most DeFi protocols (lending & borrowing platforms) incentivize liquidity providing to encourage users to deposit their crypto assets. The longer tokens are deposited, the more the rewards are accrued. This is a passive way of making money in the crypto space as it doesn’t involve any activity besides leaving your funds for some time.

STAKING

Staking is the process of locking up certain tokens in protocols to help support the underlying blockchain. Staking is utilized by blockchains that use the Proof-of-Stake (PoS) consensus mechanism. During the staking phase, users are unable to use their token(s) for regular activities like trading, lending, etc. Staking is a way of supporting blockchain networks and it is usually incentivized. Users who lock up their tokens are rewarded with crypto tokens, stablecoins, or fees from trading. For platforms that engage in restaking, stakers are given additional rewards because their staked tokens are used by other platforms other than the original staking platform. Staking provides passive income opportunities for crypto holders as they help secure the network.

NFT TRADING & FLIPPING

Non-fungible tokens are digital assets that are stored on the blockchain. NFTs can be accessed by anyone. NFT trading involves buying and selling these unique collections. Some NFT enthusiasts buy NFTs for aesthetic purposes (collectors), while most NFT traders buy NFTs in the hope of trading them for quick profit (flippers). Sometimes, these NFTs are gotten through a whitelist (WL), hence, they are basically minted by the owners for free (or almost nothing). Flippers mint NFTs and list them on secondary marketplaces for a higher floor price than they minted at, in the hope of gaining profits.

PRESALE & PUBLIC SALE OR ICO

Presale is a method through which crypto projects raise funds. It involves crypto projects (with yet-to-launch native tokens) offering a percentage of their tokens for sale at a discounted price to certain individuals. It is mostly a win-win situation for all parties involved because the crypto projects will raise the needed funds to help them continue operation and those who participated in the presale will have the opportunity to get their tokens at a very early stage, which when launched will be at a higher price, hence, giving them the chance to profit from the price difference.

Public sale, also called Initial Coin Offering (ICO) is a method by which crypto projects raise funds by offering their tokens for sale to the public at a discounted price. These projects, when launched, typically list their tokens at a higher price than the public sale price. This gives public sale participants the advantage of better profit, even if they wish to sell instantly or hold.

AIRDROP FARMING

Airdrop is a marketing tactic that involves the distribution of free tokens to the public as a way of incentivizing them for activity participation. Airdrop is a way to promote a project and reward early supporters. Airdrops come in various forms and they usually involve completing tasks (sometimes at zero-dollar cost) to earn rewards (in the form of their native tokens) at a future date. Airdrops are a way to raise capital as some of them don’t require participants to deposit funds, buy into a token, or lock up a token, all of which require funds. They are known as a way for newbies to make free money.

CRYPTO JOBS

Another popular method to explore the crypto space to make money is through jobs. The web3 industry boasts of hundreds and thousands of crypto projects and these projects require individuals who are skilled in various ways to help contribute their expertise in their projects. Analysis, research, content writing, design, programming, art, social media management, marketing, shilling, etc are examples of skills that people use to get full-time jobs and gigs. People who work in the crypto space are often paid in established cryptocurrencies (like Bitcoin, Ether, SOL, etc), stablecoins (USDT, USDC), or other forms of payment.

GAMES

Most crypto games are incentivized to encourage players to play games and test out features.

The above-listed ways are just a few examples of the multiple ways money can be made in the crypto space. It is pertinent, however, to note that all of these methods require hard work, patience, time, and resilience.

For those opportunities that require funds, it is important to conduct thorough research about the project you’re “getting in bed with” and understand the risks involved. To succeed in the crypto space, one vital tool is information. Sometimes, it’s about who you know and what they know, that is why it is important to join communities where updates are shared and make connections with people in the space.