A weekly newsletter decoding crypto, blockchain and the entire ecosystem.
By Rohas Nagpal
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10 ways to profit from crypto
In this edition, we are going to see 10 ways in which you can profit from crypto. But let's start with some positive crypto news -
A new law now enables many German investment funds to invest in crypto. They can hold up to 20% in digital assets. This is expected to bring in a ton of new money into the crypto markets.
The American Bankers’ Association (ABA) has published a report listing many useful use cases for banks and crypto. Increased partnerships between banks and crypto startups would be highly beneficial for the ecosystem.
NFT volumes are booming and OpenSea, an NFT marketplace, had a record-breaking weekend with almost US$ 85 million in volumes.
In not-so-good news, the legal troubles at Binance are increasing. The Malaysia Securities Commission (SC) has said that Binance is operating illegally as a Digital Asset Exchange. Binance has been ordered to disable its website and mobile applications within 14 business days. It must immediately cease media and marketing activities, and immediately restrict Malaysian investors from accessing its Telegram group.
Now let's see some ways in which you can profit from crypto:
An airdrop is a marketing activity by a new crypto project. A small amount of crypto is sent out for "free" to increase awareness. It's not entirely "free" as you may need to do some promotional work like retweeting a post, sharing a link with your network, etc. If you want to bypass this work, you can signup for automated services.
2. Crypto Affiliate Programs
Most crypto exchanges, trading platforms, and wallet services offer commissions if you refer new customers to them. All you need to do is signup for a referral code and then share links to your social networks.
3. Bug bounties
Many projects pay serious money if you find bugs in their platform/code. This requires a ton of "hacking" talent.
4. Learn Crypto - Earn Crypto
Some cryptos pay you to learn about them. This is great because you are getting paid to learn interesting stuff! All you need to do is watch some videos, take a quiz, and get rewarded in the crypto you have just learned about. A great place to start is coinmarket.cap.com.
HODL is an acronym for "Hold on for Dear Life". Most bitcoin investors I know fall under this category. So, while they don't "book" profits, their net worth has been skyrocketing. You really need to be a "believer" and a long-term player for this.
Some crypto assets pay dividends similar to how companies pay dividends to shareholders. An example is KuCoin, a crypto exchange that pays 50% of all trading fees as dividends to Kucoin Shares (KCS) holders.
Bitcoin uses "mining" to validate transactions. This costs a huge amount of electricity and computational power. Many other cryptos (e.g. TRX, XTZ, ATOM, VET, ALGO) use a more eco-friendly way of validating transactions - proof of stake. This requires you to temporarily "lock" your crypto in a wallet or exchange.
The annualized reward rates can go all the way up to 96%. The top 5 crypto assets by staked value are:
People gamble on a lot of things - horse races, dog races, lotteries, and even cockroach races! In fact, there are many "prediction markets" out there for gamblers. Well, day traders gamble on cryptos. This is probably the riskiest way to try to make money. Most day traders I know barely break even.
9. Lend cryptos
You can lend your crypto and earn interest. Some of the latest interest rates are:
Providing liquidity on Decentralised Finance (DeFi) platforms is an excellent, though slightly complex, way of profiting from crypto. You can get started with Uniswap, an automated liquidity protocol. Each liquidity pool has a smart contract to enable swapping tokens and adding liquidity. Savvy investors can provide liquidity and earn trading fees with protocols like Uniswap.