How To Make Money With Bitcoin – Beginner’s Guide for 2023
Please note that we are not authorised to provide any investment advice. The content on this page is for information purposes only.
Can you make money with Bitcoin? In April of this year, Bitcoin reached an all-time high of $64,863.10 taking its ROI to 35,342.95%. As high-profile investors like Elon Musk and PayPal start to side with this digital currency, many are wondering if there’s more to Bitcoin (BTC) than meets the eye.
But just how do you make money with Bitcoin? Before you can even start investing or trading Bitcoin you will need to open an account with a regulated broker or a top-rated cryptocurrency exchange. So, let’s cover how to buy Bitcoin for as little as $25 and what trading strategies you could use.
Table of Contents
Make Money With Bitcoin – Quick Guide to Buying Bitcoin in 2023
With so many top-rated brokers and crypto exchanges out there, choosing the right one can be disorientating. With that said, we highly recommend the regulated broker XTB as it’s home to millions of traders and allows you to invest in Bitcoin with 0% commission and a typical spread of just 0.75%.
- Open a live trading account with XTB– Head over to XTB’s official site and click on the button marked ‘Join Now’. Provide your details and choose a username and password.
- Verify your account – As part of the KYC process, you will need to upload proof of identity and address. Examples include a copy of your valid passport and a recent bank statement.
- Deposit funds – The minimum deposit is just $50 and you can use a range of payment methods from bank transfers to e-wallets and debit cards.
- Buy Bitcoin – Search for Bitcoin, click ‘Trade’, enter your stake amount and place your order. It’s that simple!
Where to Make Money With Bitcoin
With Bitcoin putting up unprecedented gains this year, many cryptocurrency enthusiasts and investors are optimistic about this digital asset’s outlook. Read on to see where you can gain exposure to the largest cryptocurrency on the market right now.
1. Coinbase – Top-rated Cryptocurrency Exchange With a Convenient Mobile App
Coinbase is one of the leading cryptocurrency exchanges, according to coinmarketcap.com, with a market capitalization of over $47 billion and an average
Fees and Commissions
When you trade crypto assets on Coinbase, you’ll have to pay a standard commission of 1.49% per side. Coinbase also charges a fee when you convert one cryptocurrency to another. This 2% spread is slightly higher than the industry average when compared to other popular brokers and exchanges.
Payments
One of the main drawbacks of using Coinbase to buy Bitcoin is that it is rather expensive. For instance, while XTB charges a 0.5% conversion fee for non-USD deposits, Coinbase charges a commission of 3.99% on debit card transactions. Coinbase supports debit cards, cryptocurrencies, and bank transfers as payment methods. If you use bank transfers to fund your account you can avoid the 3.99 percent Coinbase fee on debit card deposits and transactions, but you will have to wait a couple of business days for the funds to be credited.
Is Coinbase safe?
In terms of regulations and security, Coinbase is registered with FinCEN as a Money Services Business, and is listed on the NASDAQ exchange and therefore discloses its financials publicly. Coinbase also holds an Authorized Payment license in the UK.
Pros
Cons
Cryptoassets are highly volatile unregulated investment products. Proceed at your own risk.
2. Binance – Leading Crypto Exchange With Low Trading Commissions
Binance is one of the largest cryptocurrency exchanges in the world, with a daily trading volume of more than $13 billion. Based in the
Fees and Payments
In contrast to most other exchanges, Binance’s trading fees are very competitive. For example, the spot trading fee is just 0.1%, and the instant buy/sell fee is just 0.5%. The Binance ecosystem’s native DeFi token is the BNB coin. Depending on your location, Binance offers both fiat and crypto deposits. Traders also have access to the following payment methods: cryptocurrencies, credit/debit cards, and bank transfers.
Is Binance safe?
When it comes to storage, Binance offers its native convenient Bitcoin wallet. Despite being less secure than withdrawing your Bitcoins to a private third-party crypto wallet, Binance does provide several security features. For example, you can use two-factor authentication and you can whitelist your IP and unique crypto wallet address.
Moreover, all client funds are held in cold wallets and you also have the Safe Asset Fund for Users (SAFU). The SAFU is an insurance pot that is funded through transaction fees and is designed to offer compensation when needed. The Binance ‘Trust Wallet’ can be downloaded as an app on your Apple or Android mobile device, and is very user-friendly and secure.
Pros
Cons
Cryptoassets are highly volatile unregulated investment products. Proceed at your own risk.
How to Make Money With Bitcoin – XTB Tutorial
In this section of our Make Money with Bitcoin beginner’s guide, we’ll show you how to buy Bitcoin with XTB in a few easy-to-follow steps.
Step 1: Open a Brokerage Account at XTB
First and foremost, head over to the XTB website and register for a live trading account. This takes just a few minutes and is fully digital.
Once you’ve clicked on the ‘Join Now’ button, provide your details and choose a username and password for your account.
Step 2: Verification
In keeping with standard practices for all regulated brokers, you will need to go through the KYC process. The Know Your Customer process is a regulation set by the financial authorities, such as the FCA, designed to combat money laundering and identity theft.
To verify your account, you will need to provide both proof of identity and proof of address. This can easily be done by uploading copies of your passport and a recent bank statement.
Step 3: Deposit funds
Funding your XTB live trading account is simple and easy. With heaps of payment options at your fingertips, you can deposit funds instantly with a debit or credit card, and e-wallets including PayPal and Neteller just to name a few. You can also use bank wire transfers but these typically take between four and seven working days to process.
Step 4: Search for Bitcoin (BTC)
Use the search bar at the top of the trading terminal to search for Bitcoin. From the list of relevant results click on the ‘Trade’ button.
Step 5: Buy Bitcoin
An order form, like the one shown in the image below, should then appear. From here all you need to do is enter the amount of BTC you want to purchase. The minimum amount you can invest is $25.
If you want to buy cryptocurrency CFDs, simply use leverage to maximize your purchasing power. However, with contracts for difference, you will be speculating on the price movements of the digital asset and will therefore not take ownership of the underlying asset.
Finally, click on the ‘Open Trade’ button at the bottom of the order ticket to complete your commission-free Bitcoin investment. To monitor your investment, you can do this anytime by navigating to the ‘Portfolio’ section of the XTB dashboard.
How to make money with Bitcoin – Strategize & Research
What trading strategies are the experts using? If you’re new to cryptocurrency trading then this guide is for you. Bitcoin remained under the radar until 2017.
After the BTC Bubble burst, Bitcoin became a household name with beginner and expert investors all trying to get their hands on a slice of this digital asset.
Bitcoin price prediction – what are market analysts saying?
According to Mike McGlone, Bloomberg’s Intelligence senior commodity strategist, Bitcoin has the potential to reach the $100,000 mark. The consensus amongst most market analysts and expert traders is that Bitcoin could stage a strong rally throughout the third and fourth quarter of 2021.
At the time of writing, the current price of Bitcoin is $48,707.87 with a 24-hour trading volume of more than $32 billion. Bitcoin’s current price and market value give it a market cap of $915,569,740,511.30 and a market dominance of 43.8%.
Can you make money with Bitcoin?
Now that you have a clear understanding of how to buy Bitcoin, let’s explore how you can make money with the number-one cryptocurrency right now. We’ve identified some of the best strategies that you can start using today.
Image source: coinmarketcap.com
Choose a trading strategy that suits your needs and is likely to help you hit your financial objectives. It’s a well-known fact that if you had invested $10,000 in Amazon stock (NASDAQ: AMZN) during its 1997 IPO, your investment would be worth more than $10 million nowadays. But what does this have to do with making money with Bitcoin? The key here is that you need to invest and take action while the iron is still hot. By investing early, you’ll have the edge over the masses and secure your position in the digital ecosystem of the future.
While most market analysts would argue that there is no “ideal” trading strategy, there are several methods that are perfect for beginner investors.
HODL
When retail investors consider buying into Bitcoin, they picture the huge gains they could make when selling the crypto for USD as the market price goes through the roof. This buying and holding strategy has been coined as HODL. HODL acts as an acronym for ‘Hold On For Dear Life’ and was started as a trading strategy to stop impulsive selling in the already volatile crypto market. HODL is a term that usually crops up in cryptocurrency forums and social media platforms. It’s a popular strategy that many commodity investors use, and it works as a hedge against volatile market movements.
Crypto enthusiasts that buy and hold for the long term label themselves as HODL’ers. However, Bitcoin is not yet a store of value, whereas other safe-haven assets like gold and the US dollar have a long history as tradable assets.
Crypto Market Crash – What happened?
Furthermore, some people are shocked when the market price surpasses the $60,000 mark, and then suddenly plummets by over 50% overnight. This happened as recently as the 19th of May, also dubbed the crypto market crash day, when China hit back at cryptocurrencies and Tesla’s CEO and founder, Elon Musk, scrapped plans to accept Bitcoin as payments for his electric vehicles. Consequently, from highs of around $42,909.4 on May 18th, the market price dropped to $37,002.44 overnight. This represents a 24-hour decline of -13.76612%.
Image source: TradingView.com
Then Bitcoin rode a sustained bearish wave before landing at $29,807.35 on Jul 20, 2021. It has since staged a strong rally and is currently hovering around the $50,000 mark. Therefore, for those who adopted the HODL strategy and did not sell their share of Bitcoin during the extreme market volatility, they’re seeing positive gains after a four-month rollercoaster of ups and downs. And with most market analysts forecasting Bitcoin to soon reach $100,000, buying and holding this popular digital money could prove to be a good long-term investment.
XTB is the best copy trading broker to buy Bitcoin using a bank transfer, debit or credit card, and e-wallets like PayPal and Neteller. Click here to visit the XTB website and find out more.
DCA – Dollar Cost Averaging
Dollar cost averaging is a trending and time-tested crypto trading strategy that works best as a long-term investment method. The DCA concept is straightforward. Rather than investing all your capital in a cryptocurrency at once, you divide your investing funds into smaller chunks, select a certain time and day of the week and only purchase at those times.
What is Dollar Cost Averaging?
Let’s say you have $20,000 and have decided to invest in Bitcoin. Rather than using the entire amount of money at once, you opt for the DCA strategy and divide the $20,000 into 40 lots of $500. Then you pick a certain day of the week and time of day to purchase Bitcoin – for example Tuesday at 10:00 AM GMT. During the next 40 weeks you regularly buy $500 worth of BTC every Tuesday at the specified time until you have invested the full $20,000.
So what effect does DCA have?
Investing relatively smaller amounts of money at regular intervals in the long term helps to minimize the effect of market volatility. Market volatility occurs every time the price movements start rising and falling dramatically in a short amount of time. In other words, using the DCA strategy typically allows investors to purchase more BTC than if they had invested the entire amount in one go.
What is a dcaBTC calculator?
dcaBTC is a dedicated DCA calculator that helps demonstrate the effectiveness of using dollar cost averaging to invest in Bitcoin over the long term.
Image source: dcabtc.com
According to dcabtc.com, had you purchased $50 of Bitcoin every week for six years starting in 2016, a total investment of $15,700 would have turned into $524,390.
Another great reason why the DCA strategy is great for beginner crypto traders is that the entire process can be fully automated using a range of trading bots. Using a trading bot means that you’ll just have to deposit funds and set the trading parameters. The trading bot then does all the work for you, hence why it’s called a passive trading method.
If you decide to take a DIY approach to the DCA trading strategy you can optimize your results by following one expert tip: only invest in the underlying asset at the set times when the market price is in the red zone. When prices are in red it simply means that the asset is trading lower than it was yesterday.
RSI divergence trading strategy
The RSI divergence trading strategy is more technical than the other strategies we’ve looked at so far, but it can be an effective tool for timing trend reversals before they occur. Trend reversals happen when market prices start shifting from an uptrend to a downtrend or vice versa.
