In the cryptocurrency space, besides trading coins, what other ways are there to make money? I have roughly sorted out eight methods, let's see which one is more suitable for ourselves.
The first type: trading coins.
The buying and selling of cryptocurrencies can be divided into spot trading and contract trading. I think it is more appropriate to call it trading because trading is actually a behavior of engaging with the market. To better participate in this engagement, you need to master certain skills and methods; otherwise, you will gain nothing and instead become cannon fodder in the market. For beginners, it is advisable to start learning from spot trading instead of immediately diving into contract trading.
The second type: hoarding valuable coins.
Usually, people think that simply holding digital assets does not involve much technical content, but the reality is not so. There are many stories of seasoned investors in the cryptocurrency space who entered this field 5-6 years ago and are still able to continuously participate and hold onto their digital assets, but these individuals are few and far between.
I have several cases like this around me, so it's not as simple as we imagine. In China, there is a community with thousands of members, and the founder of the community is an early buyer of Bitcoin, who regularly conducts psychological building for members in the community to help them hold on to digital assets.
Of course, the key to holding digital assets lies in choosing the right target. If you do not choose the correct digital asset, holding it may be meaningless. A typical case is EOS in 2018. Many people bought a large amount of EOS with Bitcoin in 2018, and some held EOS for a long time until they realized the situation was bad in the second half of 2020 and gradually converted EOS back to Bitcoin. However, at that time, they found that their assets had significantly decreased.
Therefore, before holding digital assets, it is essential to choose assets that have stood the test of time. So far, only Bitcoin has survived over 10 years of market testing, followed by Ethereum and other major valuable digital assets.
The third type: exchange arbitrage (IEO).
Exchange arbitrage is actually a type of activity that participates in new token issuance, also known as new token offerings. In this activity, exchanges collaborate with project parties to hold reward activities. For project parties, it helps to promote their projects; for exchanges, it attracts more user traffic and also enhances their platform tokens.
Usually, to participate in such new token offering activities, you need to pledge a certain amount of platform tokens to receive new token rewards.
Because generally speaking, people are unlikely to directly purchase the platform tokens of exchanges to participate in new token offerings, especially during bull markets. If you buy directly, the risks come along.
At this point, you can use lending platforms to pledge your already held digital assets and then borrow the exchange's platform tokens (for example, pledge BTC, ETH, USDT, etc. to obtain BNB and FTT). This way, you will receive rewards for participating in new token offerings. After the activity ends, you return the borrowed platform tokens, and your earnings will be the new token's earnings minus the lending interest.
Currently, the exchanges that frequently conduct new activities include Binance, Huobi, Gate, and FTX. However, it is important to note that since the second half of last year, many activities on Binance and Huobi usually require you to have an overseas account to participate, which excludes many users from mainland China.
New token offerings with GJ restrictions usually have a good structure, typically requiring a pledge of 5-15 days to earn a profit of 2%-10%. It mainly depends on the current market conditions and the fundamentals of the new token. Of course, due to this, such new token offerings are often regarded as low-risk arbitrage activities.
The fourth type, participating in airdrops.
Regarding participating in airdrops, the returns from airdrop participation in the past years of 2021 and 2020 were quite substantial. However, as the number of participants has increased, this field has begun to become more competitive. Therefore, if you still want to participate in airdrops, everyone should try to engage with a product experience mindset.
The fifth type: DeFi yield farming.
DeFi yield farming is a widely mentioned method. The core idea of DeFi yield farming is to provide liquidity to DeFi platforms to earn rewards in the form of platform tokens, thus making originally non-earning digital assets start to generate profits. These rewards are usually given in the form of platform tokens.
Regarding DeFi yield farming, if you choose a reliable platform, you usually receive stable returns. Many platforms offer annualized returns of about 10% to 15% on stablecoins (with fluctuations). However, I still recommend that everyone choose some well-known leading DeFi platforms, as they are relatively more reliable. If your investment amount increases, it is advisable to directly choose DeFi platforms on Ethereum.
The sixth type, GameFi mining.
GameFi is a very popular track in the second half of 2021. Currently, there are many blockchain games in this track. However, overall, it is still in a chaotic period, and its model is more akin to a funding game, so it is not recommended for beginners to invest large amounts of money in this field.
The seventh type: participating in the primary market.
Earlier, we mentioned exchange arbitrage activities, which usually involve the listing of the exchange's own new tokens. In addition to the exchange's own arbitrage activities, there are also some third-party platforms that provide opportunities for new token issuance, such as Coinlist, Public DAOmaker, and other similar platforms are gradually increasing. However, due to the strengthening of regulatory policies in mainland China, many of these platforms no longer allow mainland residents to participate. Therefore, to engage in such opportunities, you usually need to have overseas identity.
The eighth type: donations to early projects.
In the blockchain world, there is a platform known as the JH library of Ethereum, which is Gitcoin. It is called the JH library because many early projects on the Ethereum chain can publish their fundraising on Gitcoin.
Generally, if you donated during the early fundraising of this project, there is a high probability that if the project issues tokens in the future, those who donated will receive airdrops from the project.
The above are the eight ways I have experienced and participated in making money in the cryptocurrency space. Of course, all these methods come with varying degrees of risk, some are high risk and some are low risk. Therefore, each of us needs to choose a money-making method that suits our personal situation in this circle.
Of course, besides these, there are definitely other ways. If you also have other money-making methods, feel free to share them in the comments.
Disclaimer: The content of this article does not constitute any investment advice. Cryptocurrencies are high-risk investment products and may zero out at any time, so participate with caution.
There are many ways to make money in the cryptocurrency space. If you want to know more channels for making money in the cryptocurrency space, leave 888 in the comments, and I will guide you for free!
