Unique Ways to Profit in the Crypto Market in 2020: The Definitive Guide [Updated]
Even just a few years ago in the cryptocurrency industry, the ways that people could generate an income were much less varied, and essentially only revolved around buying and selling cryptocurrencies on trading platforms in different ways.
While in 2020 this is still the primary way that people are making money online with cryptocurrency, there has also been an explosion of new and creative ways to be able to generate revenue and profit using digital currencies.
While some of these opportunities are relatively straightforward and available for anybody to access, some do require more effort, energy and skill, whilst also potentially yielding much higher levels of income.
We are breaking down these new and unique ways of profiting in the cryptocurrency industry, starting with a look at what cryptocurrency is and then quickly moving on to looking at different methods of generating an income, both within the field of cryptocurrency trading, and outside of the marketplaces themselves.
What is Cryptocurrency?
Is Cryptocurrency the Future of Money?
Especially within the cryptocurrency industry, there are a large number of proponents of the idea that the future of money is cryptocurrency.
While there are also many skeptics that are perpetually seeking to find the flaws in blockchain technology and its greatest application to date, cryptocurrencies, the trajectory in the growth of the cryptocurrency industry over the past decade is undeniable.
The initial few years of the life of Bitcoin started slowly, yet progressively the industry went from being a largely disconnected group of enthusiasts coming together around the potential for decentralized currencies, to gradually growing to become a trading network of various small-scale platforms, to what we see today in a mature and globally-spanning financial system.
The real indication that cryptocurrency is indeed the future of money is that over the past few years we have seen both the mainstream financial industry and the mainstream financial asset trading market widely seeking to enter the cryptocurrency market, and to adopt blockchain technology en masse.
These are perhaps the most positive indications that the future of money will include a decentralized element, if not being completely dominated by it, in that even the gatekeepers of the legacy financial system are now seeking to embrace cryptocurrency.
Where Did Cryptocurrency Come From?
Cryptocurrency in its initial manifestation was a revolutionary concept delivered to the world by an anonymous group or individual known as the Satoshi Nakamoto in 2008.
In a now widely-known research paper, the Bitcoin Whitepaper, Nakamoto outlined three important new creations.
The first of these was the concept of a cryptocurrency, which was not the first incarnation of a digital currency, with that having a long history back to the 1990’s at least.
But instead it was the first time that a truly decentralized digital currency had been created that would be robust to regulation, malicious attacks, and other threats.
The second creation of Nakamoto‘s that was revolutionary was the first cryptocurrency, Bitcoin.
Bitcoin brought together the concepts of cryptocurrency and turned them into a real world asset that would be launched as an example of what could be done with this new technology.
Lastly, the perhaps most revolutionary creation of all three was the design of a new technology called blockchain, that would be used to power and manage Bitcoin and other cryptocurrencies.
Where the applications of cryptocurrency are purely within the realms of financial transactions and financial systems, the potential applications for blockchain technology as a decentralized ledger are significantly wider and have a potentially much larger impact on the world.
How does Crypto Work?
Blockchain technology is revolutionary because it is able to solve a handful of economic and computational problems that have persisted whenever digital currency creators have tried to create something that would be robust.
The largest issue that has consistently faced digital currencies prior to the creation of Bitcoin was that the centralisation of these currencies would allow regulators and governments to easily shut them down.
For example, if a digital currency is running on the Internet, but all of the code that runs the currency is stored on a single server, then as long as the government with all of its resources available can locate the server physically, they can easily unplug this server and shut down the digital currency.
Nakamoto realized this acutely, and as a response to previous failed attempts they integrated the concept of decentralization into the core of what cryptocurrencies would be.
Instead of a single server running the Bitcoin software, there are thousands upon thousands of computers around the world simultaneously running the same software and communicating between each other in order to maintain consensus amongst themselves as to what the state of the Bitcoin network is at any given time.
In a practical sense, this means that for any government, regulator, or other malicious actor to shut down the Bitcoin network they would have to find and locate and shut down thousands of computers simultaneously, with any single computer being left being able to continue on the Bitcoin network.
What are the Most Common Ways to Earn an Income with Crypto?
Cryptocurrency Trading
Cryptocurrency trading is the process of purchasing and selling cryptocurrencies in a repeated fashion, with the goal of generating profit overall across all trades during a given period of time.
What this means is that if 10 trades are made for example, and 5 of them are losses as well as 5 being wins, as long as the size of the wins overall is larger than the size of the loss overall, this strategy would be considered as a successfully profitable strategy.
Traders typically create trades that are relatively short in duration, with a trade lasting anywhere as little as a few milliseconds or anywhere up to as long as a few days.
Traders may employ a wide range of strategies that could include things like mean reversion, momentum trading, algorithmic trading, arbitrage, and market making.
Cryptocurrency Investing
Cryptocurrency investment is very similar to cryptocurrency trading, in that cryptocurrency investors also create trades, however a key difference in these two types of activities is that cryptocurrency investing is generally more of a long-term way to profit from the cryptocurrency market.
Where a cryptocurrency trader may create 100 trades in a single day, a cryptocurrency investor may create a single trade over the course of years.
Because of this, cryptocurrency investment is often less about the day-to-day fluctuations in the price of a cryptocurrency, and more about the overall trend within the market over the long-term.
Cryptocurrency investors often pay a lot more attention to fundamental factors such as the health of the global economy, the health of the cryptocurrency market as a whole, regulations that may be applied in any one country to cryptoassets, and the general sentiment amongst users as to the strength of the cryptocurrency market.
Cryptocurrency Mining
Cryptocurrency mining is an underpinning activity that allows for new cryptocurrency to be created, and is essentially a conversion of the cost of electricity and equipment into the value stored within a cryptocurrency.
Bitcoin mining plays a critical role in an important process within the Bitcoin blockchain known as consensus.
Consensus is the concept that in a decentralized economic environment that doesn’t have a central decision maker to decide which transactions are accepted into the network and which are not, that there needs to be a method where all parties can agree on the state of the Bitcoin blockchain, and that the responsibility for making this decision is shared in a decentralized fashion.
Thousands of Bitcoin miners download the software to be able to mine, and then run that software on their computers in a race against each other to solve a complex cryptographic puzzle.
The miner that solves the puzzle first is rewarded with an amount of free Bitcoin, and is also then allowed to select the next cluster of transactions that will be officially added to the Bitcoin blockchain, representing the processing of those transactions.
What are the Best Crypto Platforms for Investing and Trading?
PrimeXBT
PrimeXBT is not only the world’s leading multi-asset margin trading platform, but is a true innovator within the cryptocurrency market, and a bridge between cryptocurrency traders and accessing mainstream financial markets.
PrimeXBT lists a wide range of crypto assets that include BTC, ETH, XRP, LTC and EOS, with industry-leading leverage available of up to 100X, and a wide and varied range of mainstream financial assets that includes stocks indices , forex pairs, commodities, and metals, with leverage of up to 1000X applicable across all mainstream financial assets.
PrimeXBT is known as a secure platform that has never been hacked or breached to-date, and that implements bank-grade security measures in order to protect the assets of traders.
As well as this, PrimeXBT’s fee schedule is the lowest of any large cryptocurrency platform on the market today, with a flat rate of 0.05% being applied across the board for all assets and all transaction sizes.
Finally, PrimeXBT’s user interface is intuitive and simple to get a hangover for beginners as well as being powerful enough for expert traders to employ advanced strategies in the marketplace.
Kraken
Kraken is one of the older platforms in the cryptocurrency industry, and it is one of the leaders with regards to changing with the times as the cryptocurrency market has matured.
Perhaps Kraken‘s major claim to fame is that it is a highly security-centric platform, with both of the founders of the platform being security analysts that we called in to assess the defunct trading giant Mt. Gox in 2014.
Since then until now, Kraken has evolved with the maturation of cryptocurrency traders over the years, and today Kraken lists a wide range of different cryptoassets for traders to access.
The platform has struggled with technical issues relating to a glitchy trading engine for a period of a number of years, and this saw a contraction of the number of traders at the platform as a result of this.
However over the past few years, we have seen a number of traders return back to the platform as a result of upgrades to both the user interface and to Kraken’s sub-sufficient training engine.
Unique Ways to Profit from the Crypto Markets
Covesting: Social Trading
Covesting is a leading cryptocurrency exchange that has a focus on social trading, and has built its reputation as a leader within this area of the cryptocurrency market.
Covesting implements a system of copy trading, where traders that have proven track records and experience in cryptocurrency markets are able to magnify the profit that they generate from their trades by allowing other traders to copy their strategies.
Simultaneously, this also allows new and novice traders that perhaps don’t have the understanding of the cryptocurrency market to consistently generate profit to be able to pay a small fee to an experienced trader, and then to use their skill and knowledge to generate high profits on their investments.
As well as being the core of the Covesting trading platform, Covesting’s concept of copy trading has also been incorporated into PrimeXBT’s platform with the launch of the new Covesting Module beta.
PrimeXBT Turbo: Lightning Fast Profits
PrimeXBT has recently launched a new platform that has been integrated into their existing systems that allows traders to generate up to 90% profit in just 30 seconds.
Unlike normal ways of trading where being able to generate 5% profit over the course of a month is considered to be exceptional, traders can use PrimeXBT turbo in order to be able to generate previously unthinkable levels of profit in the cryptocurrency market.
This is achieved by integrating short-term Bitcoin-settled accounts into Turbo, which are a method of simplifying the process of creating and generating profit from a trade.
Instead of having to predict the exact level that the price of an asset may get to, in order to generate 90% profit within 30 seconds all a trader has to do is be able to predict if the price will be higher or lower than the entry point at the end of the 30-second period.
Binance Launchpad: Invest in IEOs
One of the largest and most significant developments in the history of cryptocurrency was the launch of ICO‘s in 2016, and their impact on ballooning the cryptocurrency market throughout 2017.
While during this period ICO’s were the talk of the town, shortly thereafter the sheen that surrounded the wore off, and the number of scams within that sector of the market took its toll on the confidence of users for adopting these kinds of investments.
Fast forward a few years, and today the newer and purportedly safer version of these is IEO’s, with Binance Launchpad being one of the most popular places online to use this new kind of investment vehicles.
While the size of the success of projects using this model to launch has been a fraction of what was seen in 2016 and 2016 with ICO’s, there have still been a number of projects that have successfully launched over the recent past using the IEO structure.
Unique Ways to Profit with Crypto Outside of the Markets
PrimeXBT 4-Tier Referral System: Maximised Rewards
For those who are interested in generating a regular and reliable income from the cryptocurrency industry without necessarily having to buy and sell cryptocurrency in the marketplace, PrimeXBT has a 4-tier referral program that has netted the top three participants last year $1 million.
Affiliates are able to select whether they get a percentage of their direct and indirect referral’s trading fees, or whether they receive a lump sum amount of up to $1250 CPA for qualified referrals.
When receiving a percentage of referrals, the unique thing about PrimeXBT’s referral program is that as well as getting 20% from all direct referrals, affiliates also receive 15% from all of the referrals that the direct referrals make, 10% from all of the 3rd tier of referrals, and 5% from the 4th tier of referrals.
Where most other referral programs are simply for direct referrals only, PrimeXBT’s referral program allows for the creation of a 4-tier network of income that will run autonomously, even while an affiliate is asleep.
Bounty0x: Crypto Bounties in One Place
One of the fastest growing sectors within the cryptocurrency industry outside of trading-related activities has been the occurrence of cryptocurrency bounty programs.
Bounties are programs that are created by cryptocurrency projects where users are able to complete tasks for the project in return for free cryptocurrency.
Bounty0x has been the largest platform to fill this space and to bring together the various Bounty programs that are being provided at any one time within the cryptocurrency industry.
Completing crypto bounty programs has been a popular way for users to generate an income, based on factors such as the low barrier to entry, the relative simplicity of the tasks required in order to earn cryptocurrency, and the increased potential for generating high profit on activities if the cryptocurrency they are paid increases in value over time.
Coinbase Earn: Earn While You Learn
The most recent new addition to ways of generating an income without needing to buy and sell cryptocurrency is to complete activities that are listed on Coinbase’s new subsection called “Earn”.
Earn is a place where cryptocurrency projects are able to create videos and learning courses, and to provide rewards to a wide range of cryptocurrency users for watching the videos and completing questions at the end of them.
As well as this, by sharing the course itself, users are then able to earn even more free crypto by bringing others who then complete the same activities.
Although the rewards for users are relatively high in comparison, there is only a limited number of projects listed, and also the barrier to entry for users is quite high considering that a vetting process will determine if a user is able to participate or not.
What is the Future of the Crypto Market?
Is Income Generation becoming more diverse?
As is evidenced above, a trend that we have gradually seen becoming more prominent throughout the life of cryptocurrency is for a wider and wider variation of the ways in which users can generate an income in the cryptocurrency industry.
This has been as a natural result of the growth of the number of users that are involved with cryptocurrency, leading to greater innovation, newer ideas, and more integration with other industries and existing income models.
What will be interesting to see is whether there will be a greater crossover between cryptocurrency and other technologies, and whether a growing integration of cryptocurrency into the mainstream financial industry will lead to new ways emerging for traders to generate income.
What is for sure is that this is a trend which is increasing as the number of non-technical, non-traders in the industry continues to grow, and that as this subset of users within the industry continues to grow, so will the opportunities presented to them by entrepreneurs.
Are Options for Traders Becoming Better?
While there is clearly a greater diversity in the number of non-trading methods of generating an income within the cryptocurrency industry today, this trend is also clearly being seen within the way that trading is conducted as well.
Look no further than new ways to trade such as the emergence of widespread margin trading, as well as more nuanced trading tools and instruments such as cryptocurrency derivatives, in order to see that the way that much of the market engages with cryptocurrencies is no longer simply buying or selling an asset.
What can be expected is that as more of the cryptocurrency market merges with more of the mainstream financial market, this will have a substantial impact on the kinds of training tools that are available to cryptocurrency traders.
As well as this, it is a predictable outcome of the coming few years that more often cryptocurrency traders will in fact be traders of cryptocurrencies as well as financial assets such as stocks and forex, being that those assets and markets are being integrated into platforms that traditionally traded cryptocurrency-only, and this presents new opportunities to generate profit for traders.
In Summary
The cryptocurrency market has evolved more in the past decade than the mainstream financial market has done over the course of the past 20 years.
What began as a small largely disconnected group of traders that were buying and selling a single cryptocurrency at the rate of hundreds of units for a single cent, has now grown to becoming a multi-hundred billion-dollar industry that is centred around hundreds of different trading platforms where the millions of users interact with each other on a daily basis.
But as well as growing, the cryptocurrency market has continually diversified the opportunities that are available to users, and in particular this has been through over the past 3 or 4 years, as we have seen the market maturing to a point where large-scale adoption and expansion has begun.
And while we’ve already seen a lot of innovation within the industry, we can expect to see a continuation of this trend over the coming years as a new generation of trading platforms, such as the ones which we have listed above, launch and begin to control a greater amount of global crypto market share.