How to Earn Cryptocurrency in 2021: 5 Popular Ways Compared
Are you trying to earn cryptocurrency in 2021?
You are within the good place!
2020 has been a superb 12 months for crypto, and the trade has been booming in 2021 as effectively, reaching an virtually $1 trillion market cap by the tip of January.
Since the house has gone by way of main adjustments lately, customers can earn digital property in quite a few methods in 2021.
In this text, now we have chosen and in contrast the most effective strategies to earn bitcoin this 12 months and accomplished our calculations to find out probably the most worthwhile ones.
As a outcome, it is possible for you to to choose the appropriate technique by the point you attain the tip of this information.
Let’s dive in!
Disclaimer: All our exams are theoretical and based mostly on historic and projected market knowledge. For all our examples, we’ll use a $10,000 funding and calculate how a lot we are able to make off it with every technique.
What Is the Best Way to Earn Crypto in 2021?
Based on our exams, probably the most worthwhile strategies to earn crypto rank within the following order:
- Hodling: 1900% ROI with average dangers and simple problem
- Staking: 124.79% ROI with average dangers and simple problem
- Trading: 16.19% ROI with low dangers and average problem
- Lending: 6.98% ROI with low dangers and simple problem
- Mining: -11.11% ROI with average dangers and excessive problem
If you might be keen to take some dangers, holding cryptocurrency for longer intervals is a wonderful selection, together with staking. As it’s simple to get began, each staking and crypto hodling are beginner-friendly methods to earn digital property.
For these on the lookout for decreased dangers, cryptocurrency buying and selling – with out risking an excessive amount of capital and utilizing cease orders to guard their positions (like in our instance) – and lending are wonderful methods.
On the opposite hand, Bitcoin mining is just value contemplating for these with entry to low cost electrical energy or the mandatory capital to arrange a mining farm.
Based on our outcomes, we consider that holding cash, lending on DeFi platforms, in addition to digital asset buying and selling – with a shift to social- and copy-trading, and simplification – will expertise elevated reputation in 2021.
While staking will stay a positive choice to earn cryptocurrency amongst customers, we anticipate it to develop into much less well-liked sooner or later.
On the opposite hand, because of the unfavourable and very restricted potential for earnings in addition to the excessive problem to get began, cryptocurrency mining received’t be so well-liked as earlier than in 2021 and past.
In the meantime, we suggest looking at Nominex to get began with cryptocurrency buying and selling, holding NMX cash, and digital asset staking.
1. Bitcoin Mining
Risks: Medium
Earning Potential: Very low
Difficulty: Hard
Bitcoin mining is among the oldest methods to earn crypto.
Cryptocurrencies based mostly on the Proof-of-Work (PoW) consensus mechanism use decentralized blockchain networks by which miners leverage their computing energy to keep up the ecosystem.
In trade for verifying transactions and including new blocks to the chain, Bitcoin miners obtain block rewards and a share of switch charges.
Bitcoin mining has been a profitable enterprise mannequin to earn crypto up to now, however its profitability has decreased considerably in recent times.
The mining house has been dominated by giant farms which have entry to low cost electrical energy and loans to bulk-order new technology {hardware}.
Furthermore, the BTC hashrate has been hitting record-high ranges recently (which signifies an intense competitors between miners), whereas May’s halvening decreased the rewards from every newly mined block from 12.5 BTC to six.25 BTC.
For that cause, Bitcoin mining has average dangers whereas it may be troublesome to get began for brand new customers (as they must learn to arrange and function their tools).
With that mentioned, let’s see how a lot you’ll be able to earn from mining Bitcoin in a 12 months.
How to begin mining?
To begin out, we have to cowl some upfront prices to buy mining {hardware}. For our instance, we’ll use Bitmain’s Antminer S19 Pro ASIC miner, which has a 110 TH/s hashrate, consumes 3,250 W, and prices $2,684 on the present market value.
Based on our finances of $10,000, we may purchase almost 4 S19 Pro miners.
Since that may value $10,736, which exceeds our finances, we’ll alter the hashrate and the ability consumption to mirror the $10,000 funding (the final rig may have a hashrate of 80 TH/s whereas consuming 2,360 W for $1,948).
In addition to our rig, we additionally must take the next bills under consideration:
- Electricity prices: The prices of the electrical energy the mining tools makes use of when operating. We will use the world average of $0.14/kWh for our instance.
- Mining pool charges: The charges mining swimming pools cost for his or her service. We will use a 2% charge right here, which we’ll deduct from our complete income.
For our instance, we’ll use BTC.com’s mining calculator.
As a facet observe, we’ll make the most of the present Bitcoin value to calculate our projected earnings and an issue improve of two% each two weeks.
We used the common for all our rigs’ statistics and inputted them within the calculator (e.g., one miner prices $2,500 on common).
As you’ll be able to see, we solely made $16.95 in 365 days with out even deducting the mining pool’s charges, which is able to present us with a $-280.5 ($14,571.2 – $14851.70) outcome.
Furthermore, we didn’t take our mining rig’s prices under consideration. As new {hardware} fashions seem available on the market day by day, our tools’s worth will lower over time. Let’s say we’re fortunate and we are able to promote every for $1,500 ($6,000 in complete) after a 12 months of use.
As a outcome, our mining operation would offer us with a $2,572 loss and a Return on Investment (ROI) of -11.11% ($20,571 income vs. $23,143 expense).
However, if we may function our mining farm from a spot with low cost electrical energy costs, our enterprise may doubtlessly develop into worthwhile. For instance, with electrical energy costing $0.08/kWh, we may make a $3,793 revenue ($20,571 income vs. $16,778 expense) with a 22.6% ROI.
Earn crypto with Trading
Risks: Varies (low within the case of our instance)
Earning Potential: Medium
Difficulty: Medium
Cryptocurrency buying and selling refers back to the follow by which merchants enter into fast, short-term positions to revenue on digital asset value actions.
Crypto buying and selling has been round for the reason that trade’s early levels, with wonderful merchandise and companies constructed over time to profit merchants.
As a outcome, there are many cryptocurrency exchanges the place customers can commerce digital property.
With that mentioned, we suggest testing the cryptocurrency buying and selling platform Nominex that permits each newbie and veteran merchants to make (potential) earnings on the rising digital asset market.
The platform offers demo accounts the place customers can check their expertise and develop their data of the cryptocurrency market, whereas additionally offering 10 beginner-friendly video lessons within the Cryptotrading Camp.
Furthermore, customers can earn a complete of 1,120 USDT and 109 NMX tokens every day by taking part in demo trading tournaments with none dangers.
The threat stage for cryptocurrency buying and selling is predicated on the technique customers make the most of. In our check, we’ll use solely a small a part of our capital for every place with cease orders in place to restrict our dangers. Also, we’ll solely commerce on the spot market with none leverage.
Since it’s very exhausting to foretell the ROI of cryptocurrency buying and selling, we’ll use a hard and fast mannequin to calculate how a lot we are able to earn whereas buying and selling crypto. For that cause, now we have to take the next under consideration:
- Win/loss ratio: The proportion of trades we win. In this instance, we’ll win 50% and lose the opposite half of our trades.
- Risk/reward ratio: It reveals the potential rewards for each greenback we threat. Here, we’ll use a 3:1 ratio, that means that we’ll achieve $Three for each $1 we threat. With each profitable commerce, we’ll make 3% and lose 1% for each place the place our methods didn’t work out as anticipated (earlier than deducting trade charges).
- Exchange charges: The charges the cryptocurrency trade expenses for every commerce we make on the platform. It’s necessary to notice that service suppliers deduct this value immediately after coming into right into a place or exiting one.
- Trading frequency: This refers to how typically we make trades. Let’s place 30 trades a month (360 a 12 months).
- Average place dimension: The common quantity we use to enter right into a place. Let’s hold this at $500 (5% of our preliminary capital).
With the above components, we are able to calculate our common earnings and losses, in addition to our complete income, bills, and ROI.
Comparing buying and selling charges on exchanges
Compared all through three completely different crypto exchanges (Nominex, Binance, Huobi), you’ll be able to see the leads to the next desk:
| Nominex | Binance | Huobi | |
| Trading charges (taker) | 0.1% | 0.1% | 0.2% |
| Average buying and selling charges per profitable commerce | $1.015 | $1.015 | $2.03 |
| Average buying and selling charges per misplaced commerce | $0.995 | $0.995 | $1.99 |
| Average earnings per profitable commerce | $13.985 | $13.985 | $12.97 |
| Average losses per misplaced commerce | $5.995 | $5.995 | $6.99 |
| Total earnings | $2,517.3 | $2,517.3 | $2,334.6 |
| Total expense | $1,079.1 | $1,079.1 | $1,258.2 |
| Total revenue | $1,438.2 | $1,438.2 | $1,076.4 |
| ROI | 14.38% | 14.38% | 10.76% |
Trading the native tokens of exchanges
Now let’s see how a lot we’d make when holding the native tokens of every trade (NMX, BNB, HT) and utilizing them to cowl our buying and selling charges (for Huobi, we’ll maintain 500 HT).
| Nominex | Binance | Huobi | |
| Trading charges (taker) | 0.050% | 0.075% | 0.12% |
| Average buying and selling charges per profitable commerce | $0.5075 | $0.7612 | $1.218 |
| Average buying and selling charges per misplaced commerce | $0.4975 | $0.7462 | $1.194 |
| Average earnings per profitable commerce | $14.4925 | $14.2388 | $13.782 |
| Average losses per misplaced commerce | $5.4975 | $5.7462 | $6.194 |
| Total earnings | $2,608.65 | $2,562.98 | $2,480.76 |
| Total expense | $989.55 | $1,034.32 | $1,114.92 |
| Total revenue | $1,619.1 | $1,528.66 | $1,365.84 |
| ROI | 16.19% | 15.29% | 13.66% |
As you’ll be able to see, whereas Huobi supplied us probably the most reductions (since their charges are the best among the many three exchanges), we generated probably the most earnings and the most effective ROI on Nominex.
Also should you get hold of associate stage ‘MAX’, Nominex grants the chance to commerce with Zero fee, which signifies that ROI will improve even additional.
To predict future earnings extra exactly in addition to develop your expertise and data, we suggest testing and implementing a number of buying and selling methods with Nominex’s demo account.
Since you should use as much as 10,000 digital USDT to commerce cryptocurrencies, there are not any dangers concerned.
If you might be up for the problem, you’ll want to participate in either a demo or a real trading tournament to win USDT and NMX tokens day by day.
Hodling Crypto
Risks: Medium
Earning Potential: High
Difficulty: Easy
Similar to the earlier strategies, “holding” crypto is among the many oldest and hottest methods to earn digital property.
While cryptocurrency buying and selling refers to fast, frequent, and short-term buys and sells, holding or investing in digital property means an extended dedication for customers (starting from just a few months to a number of years).
With this technique, you buy a cryptocurrency and maintain it inside your pockets for average to longer intervals earlier than promoting it.
It’s necessary to say that digital property could be topic to intensive value swings, which may improve the volatility and the dangers for traders.
As we are able to’t present a exact prediction on future digital asset costs, we’ll take the historic values of the cryptocurrencies we analyze under consideration.
In this part, we’ll present potential earnings ($10,000 funding) for Bitcoin (BTC) and two trade tokens: Binance Coin (BNB) and Huobi Token (HT).
As a bonus, we may also present some instance calculations for Nominex’s native NMX token, which is being distributed to traders and merchants in the mean time.
| Bitcoin | Binance Coin | Huobi Token | |
| Initial value (December 2, 2019) | $7,303 | $15.23 | $2.88 |
| Final value (December 2, 2020) | $19,180 | $30.65 | $4.03 |
| ROI | 162.63% | 101.25% | 39.93% |
| Total earnings | $16,263 | $10,124 | $3,993 |
The desk above clearly reveals wonderful earnings for all three cash, with Bitcoin taking the lead and BNB and HT carefully following the cryptocurrency when it comes to earnings.
Now let’s see how NMX has carried out for early traders when it comes to value.
Nominex began the official distribution of NMX in February with an preliminary worth of 0.1 USDT. By now, the cryptocurrency’s value has elevated to round 2 USDT, which suggests a 1900% ROI and $190 000 in earnings for early adopters who invested $10,000 within the coin to start with.
As a outcome, NMX’s beneficial properties outrank the opposite three cryptocurrencies now we have analyzed earlier (when it comes to investing).
To study extra in regards to the rewards and potential earnings for holding NMX, we suggest taking a look at the following page on Nominex’s website.
Staking
Risks: Medium
Earning Potential: High
Difficulty: Easy
The Proof-of-Stake (PoS) consensus mechanism is changing into more and more well-liked amongst cryptocurrency initiatives, particularly with the launch of Ethereum 2.0.
Unlike the PoW mannequin, PoS and its variants don’t require validators to leverage their computational energy through mining rigs to keep up the blockchain.
Instead, validators lock up a certain quantity of their tokens to confirm transactions and add new blocks to the chain in a course of referred to as staking.
In trade, stakeholders get rewards on their cash, which permits them to make a passive earnings (just like DeFi lending) with the cryptocurrency they maintain.
To maximize their probabilities, stakeholders can be a part of staking swimming pools and companies the place customers mix their tokens to share the earnings.
However, opposite to lending stablecoins, staking comes with greater dangers for traders because the cryptocurrencies they lock up could be topic to elevated value swings and inflation.
For the identical cause, crypto fanatics have extra incomes potential with staking as their cash may improve in worth whereas they’re locked up.
In our instance, we’ll use TRX for staking, the native token of the highly-scalable, DPoS-based (Delegated Proof-of-Stake) TRON crypto challenge, which has been broadly well-liked amongst stakeholders.
Compare staking effectivity
We will examine earnings from TRX staking throughout three platforms: Nominex, Atomic Wallet, and Staked.
To calculate the projected earnings from staking, now we have to take the next components under consideration:
- APY: The annual curiosity stakeholders earn on the cash they lock up. This is 9% for Nominex (based mostly on our outcomes from the calculator on the crypto exchange’s website), 5% for Atomic, and 7.9% for Staked.
- Price actions: The improve or lower within the worth of the digital property customers stake. We will base this one on the TRON value adjustments between December 2, 2019 and December 2, 2020.
- Pool charges: Pools often cost a percentage-based charge, which they deduct from the earnings stakeholders earn. While there are not any charges for staking on Atomic, Staked expenses a 10% charge, and Nominex makes use of tiered commissions for its staking service based mostly on the variety of NMX cash customers maintain. For Nominex, we’ll examine three completely different charge charges, Starter (10%), Pro (6%), and VIP (3%).
Now let’s see the outcomes!
| Staked | Atomic | Nominex Starter | Nominex Pro | Nominex VIP | |
| Fees | 10% | 0% | 10% | 6% | 3% |
| APY | 7.9% | 5% | 9% | 9% | 9% |
| TRX value change (one 12 months) | +100% | +100% | +100% | +100% | +100% |
| Total revenue | $21,422 | $21,000 | $21,620 | $21,692 | $21,746 |
| Staking ROI | 114.22% | 110% | 116.2% | 116.92% | 117.46% |
As you’ll be able to see within the above desk, regardless of that it expenses no charges for staking TRX, Atomic ranks on the final place when it comes to profitability.
On the opposite hand, Staked secures a second place amongst service suppliers, whereas Nominex presents the most effective ROI for stakeholders, particularly for VIP customers.
In addition to all that, Nominex customers can get hold of rewards for workforce farming within the referral program and rewards for offering liquidity to the pool by staking NMX LP.
DeFi Lending
Risks: Low
Earning Potential: High
Difficulty: Easy
With the rise of the DeFi trade, cryptocurrency lending has develop into a actuality.
By lending digital property on DeFi companies, customers present liquidity to the platform. In trade, lenders generate a passive earnings on the cash they lend.
DeFi lending has gained widespread reputation within the crypto house as a consequence of the truth that it comes with minimal dangers (particularly if one lends stablecoins) whereas providing a lot better pursuits than conventional finance options (e.g., financial savings accounts, authorities bonds).
In our instance, we’ll examine crypto lending on Compound, Aave, and dYdX for the DAI and USDC stablecoins, utilizing the 30-day average of lending rates to foretell our earnings for a one-year funding.
To predict how a lot we are able to earn, now we have to have a look at the Annual Percentage Yield (APY) for every coin we lend, which signifies the true fee of return on our funding (ROI).
| Compound | Aave | dYdX | |
| APY/ROI (DAI) | 3.05% | 4.23% | 6.86% |
| APY/ROI (USDC) | 3.67% | 4.87% | 6.98% |
| Total earnings (DAI) | $305 | $423 | $686 |
| Total earnings (USDC) | $367 | $487 | $698 |
Providing a virtually 7% ROI to traders, dYdX is the clear winner for each DAI and USDC lending whereas Aave secures second place and Compound ranks third.
Disclaimer: We want to emphasize that our examples and exams included on this article are based mostly on easy predictions, and real-world methods would possibly present completely different outcomes. For that cause, we suggest everybody to do their very own diligence and hold their dangers at a minimal to earn crypto efficiently in 2021 and past.
Passive methods to earn cryptocurrency in 2021!
Cryptocurrency know-how invented a number of new roles and technical positions resembling grasp nodes, lightning nodes, and even mining nodes which can be able to incomes cryptocurrency passively and have an virtually common earnings. Additionally, in recent times a number of kinds of affiliate applications are launched that customers can be a part of to monetize their funds passively, like lending or staking, that are mentioned above.
In this part passive methods by which cryptocurrency traders can earn crypto and have an everyday earnings can be launched. These methods embody:
– Mining (mentioned above intimately)
– Staking (additionally mentioned above)
– Lending (additionally mentioned above)
– Running a Lightning Node
– Affiliate applications
– Running Masternode
– Taking benefits of forks
– Developing buying and selling bots
Running a lightning community
In latest years a number of options are launched for the issue of scalability in Bitcoin, Ethereum, and different main cryptocurrencies. Lightning networks embody networks of transactions that aren’t instantly utilized to the primary blockchain, so they’re method sooner than common transactions. These networks present bidirectional channels by which common day by day transactions could possibly be achieved sooner than extraordinary funds as a result of they’re saved on blockchain layer 2, and not mainnet.
However, it is a technical alternative for folks to run a community of transactions on one other layer of blockchain, which offers liquidity in addition to receiving transaction charges. What is superb about such a earn cryptocurrency is that you just don’t even want to have a look at market information to earn a living from cryptocurrencies by occupying this standing.
Affiliate Programs
Another technical occasion that provided new alternatives to earn cryptocurrency passively in recent times was the event of recent main cryptocurrency exchanges. These enterprises must handle to affix a extremely aggressive market by which their rivals provided a number of kinds of benefits and technical enhancements upfront. So new cryptocurrency exchanges attempt to provide affiliate applications by which they speed up their progress in varied areas of the world. People, social community influencers, and cryptocurrency content material networks and communities are potential companions of those exchanges that are focused by their affiliate applications.
While merchants and those that are taking part in with their funds within the cryptocurrency market ought to have an energetic state of affairs in opposition to market information and fall or peak of value, cryptocurrency exchanges and people joined to their affiliate applications can earn cryptocurrency with out instantly being underneath the consequences of value adjustments. Users in these applications are solely required so as to add some new customers to the trade community. However, in lots of circumstances, different necessities are having a community of cryptocurrency customers with greater than 2,000 customers and/or being an influencer on social media networks with a minimum of 5,000 followers/subscribers.
However, affiliate applications assist these people who find themselves energetic in varied crypto boards and teams to earn a living by including new members to a sure trade buyer database. Some of those applications, not like what you could find on main exchanges like Binance and OKEx, are designed to be simple. While OKEx requires a minimum of $100 buy from all 10 invited individuals to activate an associates program for a consumer, and Binance requires an already current subscribers channel, Nominex customers with solely 30USDT can get pleasure from its associates program and earn cryptocurrency passively.
Running Masternode
Decentralized networks require some nodes that act someway like a server: offering entry to the community. These nodes are often called masternodes and are incentivized by varied cryptocurrency networks to earn cryptocurrency passively solely by offering technical sources for the community’s exercise. However, to run a masternode customers must have a big technical funding.
However, with the event of cryptocurrency networks and the emergence of enormous technical services, the masternodes market is changing into more durable and more durable to affix. Since it requires giant technical funding and deep data about crypto networks, it isn’t really useful for all customers, significantly newcomers and newcomers.
Taking Advantage of Forks
When a tough fork happens in a conventional cryptocurrency community, customers of the outdated blockchain obtain equivalent quantities of cryptocurrency on the brand new blockchain. This passive earn cryptocurrency solely happens as soon as in just a few years however may present a comparatively great amount of passive earnings. As you would possibly know, in recent times Bitcoin Cash exhausting fork offers such a chance for Bitcoin customers.
To benefit from such a occasion, customers ought to have giant quantities of cryptocurrency on the outdated community earlier than the exhausting fork takes place. That means solely customers with sufficient funds in the appropriate time and place can take advantage of out of such a passive earn cryptocurrency. But simply think about these whales with hundreds of Bitcoins of their wallets once they realized that fortunately they personal the identical quantity of Bitcoin Cash to grasp how such a passive earnings could possibly be candy!
Developing Trading Bots
Another kind of offering passive earnings that’s utilized by giant corporations and monetary establishments consists of creating buying and selling bots that benefit from many occasions within the cryptocurrency market. However, it requires a deep data of each technical evaluation and monetary market mechanisms in addition to programming and laptop science, that are impossible to be present in a single individual. Trading bots are merely on-line software program that displays the market and finds buying and selling alternatives and executes trades based on worthwhile algorithms. While they sound identical to an incredible alternative for a lot of programmers and technical analysts to make use of such buying and selling bots, their technical particulars usually are not really easy and they continue to be virtually completely within the fingers of enormous corporations with skilled technical groups.
However, buying and selling bots are able to making frequent trades and algorithmic trades with low earnings, since they’re able to making greater than lots of and hundreds of worthwhile trades in a single day.
Closing Thoughts
The cryptocurrency market is a brand new monetary market that within the latest decade confirmed it isn’t a brief development and could possibly be thought-about as a technical growth that may develop in the midst of time. Like another market, the cryptocurrency market offers buying and selling alternatives by which customers can earn cryptocurrency and make earnings. But it isn’t the tip of the story as a number of kinds of roles and statuses are required to run cryptocurrency networks which can be incentivized by incomes cryptocurrency passively, with out the necessity to take part in market tradings.
In this text of Nominex varied kinds of incomes cryptocurrency are defined intimately and evaluated by their various factors. Nominex is a brand new cryptocurrency trade platform that gives many alternatives to earn cryptocurrency for its customers in numerous kinds. Users can be a part of several types of affiliate applications to get pleasure from incomes cryptocurrency passively.
Image by Miloslav Hamřík from Pixabay
