How to Make Money Online With Bitcoin

When you first hear about Bitcoin you'll see lots of things saying you can earn money by HODLing, trading or mining Bitcoin. This guide gives an overview of all the ways you can earn money with Bitcoin, and gives the difficulty and risk of each method.


HODL

This term (rumoured to stand for 'Hold On for Dear Life') refers to people who just hold cryptocurrencies like Bitcoin. They don't trade it and they don't spend it on anything, they just buy it and store it in a wallet long-term. In the long-term this can pay out very well, assuming the price of cryptocurrencies will go up; but in the short term you'll have to resist the temptation to sell on large drops - something many people find very difficult.

If this is your first time with Bitcoin/cryptocurrency, you'll need an exchange that allows fiat (real-life money) deposits. We used to use Kraken for this, but this exchange has since become very slow. Here are some affiliate links to exchanges we use: CEX.IO and LocalBitcoins.

If you're interested in where the word HODL came from, this post on Medium explains it well (SPOILERS: it was a typo!).

Difficulty: Easy (if you have the nerve for it, Medium if not)
Risk: Medium


Trading

This is a very broad category, generally referring to buying and selling currencies to earn more money than you might by just HODLing. If you buy a coin when it's cheap, sell when it goes up a bit then buy back cheaper - you'll earn more money through this. But cryptocurrency prices can be very difficult to predict, making this very hard. See our guide on some common methods for predicting cryptocurrency prices here.

Within trading there are lots of different approaches; day trading, swing trading & arbitrage trading to name a few. All with different pros and cons.

Difficulty: Hard
Risk: High


Mining

Bitcoin mining is the process of verifying transactions on the Bitcoin network, something anyone with an internet connection and a computer can do. There are two ways to mine cryptocurrencies like Bitcoin:

  • Mine it yourself using something like an Antminer (a computer designed with the sole purpose of mining cryptocurrency). See our guide on the Best Bitcoin Mining Hardware for more info on this.
  • Cloud Mining is another option. There have been many scams in this area, where people investing in cloud mining haven't got their original investment back. One of the larger cloud mining providers, Genesis Mining, we still consider to be worthwhile for certain coins; see our guide on Genesis Mining profitability here.

There are pros and cons of each of these; owning hardware yourself requires supervision & high power bills, cloud mining is normally a single upfront payment but is considered more risky. An alternative is to just mine using your personal computer or GPU, although do lots of research here to make sure your particular computer will be profitable.

Difficulty: Easy
Risk: Medium


Affiliates

Affiliate marketing is a process where you're rewarded for promoting a service. For example if someone goes to an exchange via a special link that identifies you as an affiliate, the exchange will give you some money if this user spends any money on their website.

In the cryptocurrency ecosystem there are thousands of websites looking for new users, many willing to pay you a commission for promoting their services (there are literally hundreds of services offering this). We monetise this website through affiliates, and list all the sites we use in this guide - take a look at this for some ideas on where to start!

If you ever do use affiliate links, make sure you tell people! Content written with the intent to earn some money is always biased, so your users need to be aware of this fact. Even in this guide we'll likely have a few affiliate links, and disclose this fact each time we do.

Difficulty: Easy
Risk: Low


High Yield Investment Programs

These are programs that offer you a very high return on investment in a short time, for example offering a 5% return daily for several months. This is a very dangerous area, as many of these services are Ponzi schemes, where the only people making money are very early investors (as the site owners or regulators shut them down when they get larger).

We won't link any of these services as they're so risky and in many countries illegal, due to the associated Ponzi schemes; think twice before investing in or promoting one of these sites. Bitconnect is an example of one of these programs which has since shut down, and caused many people to lose money.

Difficulty: Easy
Risk: VERY HIGH!

DISCLAIMER: This site cannot substitute for professional investment or financial advice, or independent factual verification. This guide is provided for general informational purposes only. Bitcoin Kit is UK-based and not regulated by the FCA (Financial Conduct Authority). The group of individuals writing these guides are cryptocurrency enthusiasts and investors, not financial advisors. The ideas presented are our analysis, learning & opinions on a range of cryptocurrency topics. Trading or mining any form of cryptocurrency is very high risk, so never invest money you can't afford to lose - you should be prepared to sustain a total loss of all invested money.

This website is monetised through affiliate links. Where used, we will disclose this and make no attempt to hide it. We don't endorse any affiliate services we use - and will not be liable for any damage, expense or other loss you may suffer from using any of these. Don't rush into anything, do your own research. As we write new content, we will update this disclaimer to encompass it.

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All information on this website is for general informational purposes only, it is not intended to provide legal or financial advice. We encourage you to consult your own legal & financial advisors before making any cryptocurrency-related purchase.