As inflation is more present than ever, you might be looking for a way to prevent the rising prices from affecting you that much. So, searching for new ways to make money and earn a passive income can be a great idea, and cryptocurrencies can help you greatly in this process. Bitcoin is the first cryptocurrency ever created that has finally offered an option to fiat money, as digital currencies can prove very lucrative in time. However, Bitcoin is not the only cryptocurrency you should keep an eye on. For example, Ethereum is the second-largest cryptocurrency worldwide, and it has brought many innovations into the world, which has impacted the ETH price. Ethereum was developed in 2015 by Vitalik Buterin, and since then, it has captured the attention of individuals, being among the most preferred assets to add to a portfolio.
This is why you can use Ethereum to make money and earn a passive income. In this article, we will explore the best way in which you can do this. Keep reading to learn more.
Trading
Trading is among the most popular ways you can make money with Ethereum, and this process is very similar to selling and buying stocks. To earn a passive income with Ethereum, you need to open an account with a crypto exchange that allows you to buy and purchase Ether. Then, you should identify the best moment to invest in ETH when the prices are low. But, because Ether and all cryptocurrencies at large are volatile, the prices can fluctuate quite rapidly. So, when the prices rise again, you can sell your ETHs. And because you have sold it at a larger amount than the bought one, you will earn something as a result.
Even if most perceive crypto volatility as dangerous, you can still earn something from short-term price movements. This is particularly what investors who consider day trading crypto are after when they consider a short-term approach to investing in cryptocurrencies. However, if you want to try this, you must remember that you will also need to deal with commissions and fees, which can make you lose some of your profits. Now, trading has become even easier, as you can use automated trading bots to improve your experience and help you earn more profits.
Staking
Staking is also a good way to make money with Ethereum. Ethereum works with the help of a Proof-of-Stake (PoS) algorithm, where you need to stake an amount of Ether to be able to validate transactions and earn rewards in the form of ETH. Ethereum functioned with a Proof-of-Work (PoW) consensus mechanism when it was first launched. However, this process required miners to consume a large amount of energy, and it raised the attention of individuals who have witnessed the consequences of climate change and want to do something to reduce their carbon footprint.
So, staking has become a very popular way to earn an income with Ethereum, but you still need to take some matters into account. For example, you will need to have at least 32 ETH to become a validator and participate in staking.
HODling
HODling is also a popular way to earn more money, which is a term that stands for “hold,” but because of the crypto volatility, it has also derived to “hold on for dear life.” This is the best approach you can consider for a long-term investment, in the hope that the prices will grow more if they appreciate in time. This strategy has become a very popular option that will help you make a profit and earn a passive income. Even though this technique will not allow you to benefit from immediate profits, this can be the best option for you in the long run, as Ether’s prices can skyrocket. Ethereum has grown tremendously over the years, so this will likely occur in the future as well. However, you still must consider that the prices of cryptocurrencies are volatile, and they can fluctuate a lot in the short term, which means that you can also experience losses. This is why investors advise us to take a cautious approach and only put in the amount they are comfortable with losing.
Lending
Lending is also a popular way to make money with the help of an ETH investment. Investors profit best by lending their digital currencies to borrowers with a high interest rate. Lending can function both on a decentralized and centralized lending platform.
For example, on centralized networks, users won’t really need to worry about the most common technical issues, such as authentication, bandwidth usage, security, or data storage. Using a centralized platform comes with both advantages and disadvantages. The advantages are represented by the fact that the centralized options can have higher interest rates, but they are also more susceptible to data breaches and hacks.
Decentralized options are great because they offer users better transparency, security, and customizability, allowing them to maximize their profits. One downside of these platforms is that they are often complex, and individuals might need higher technical expertise.
The Bottom Line
Ethereum has improved greatly over the years, and it has become one of the best ways for people to make money and generate passive income. At the moment, Ethereum is the second-largest cryptocurrency by market cap, and it has become like this due to all the improvements it has added to the crypto sphere. Some say cryptocurrencies are the future of money, but it is important to learn the best ways to make money using cryptocurrencies, including Ethereum.
Do you think these are good ways to make money and have a passive income?
