Can you make money from Bitcoin?
Bitcoin was born of noble intentions (some of which are still valid!). However, these days, it’s mostly looked upon as an alternative investment opportunity and a chance to make money.
But what is Bitcoin?
Bitcoin is a virtual currency. It exists purely in the digital domain and acts as a “store of value” and as a digital currency. It’s not centralised and is independent of Government control (even if the people who use it aren’t!).
Part of its monetary value is based on its scarcity. There will only ever be 21 million Bitcoins that are built into the rules of the coin itself (onto its “blockchain”). Another part of its value is based on the amount of electricity required to “mine” one. The first way you can make money from Bitcoin is by “mining” new ones: at the time of writing, they’re worth $44,000 each. It’s lucky they’re subdivided into a unit called “Satoshis” (SATs for short) so that you can own less than one Bitcoin.
Bitcoin is “mined” by being the first to solve a mathematical puzzle by brute force. In the old days, way back in 2009, you could let your laptop run collecting Bitcoin. Then you’d probably have lost interest (because it wasn’t worth anything then) and lost the wallet. It happened a lot more often than you’d think.
As with most things in life, there’s a hard way to mine Bitcoin, a less hard way, and an easy way.
The hard way is to buy the equipment needed and set it up to run 24/7. One problem is that the level of difficulty is much higher than it was, so the chances of one person running one piece of equipment and finding a Bitcoin are pretty much zero. Plus, the equipment drinks electricity. There’s a reason why 70% of Bitcoin is mined with renewable energy: it’s much cheaper!
The less hard way is the same as the hard way, except you join forces with others to mine Bitcoin together in a “pool”. When one finds a Bitcoin, the pooling software divides it according to how much everyone contributes to the pool. This still requires you to run an expensive electricity-sapping box 24/7.
The easy way is to join a cloud mining company. For a flat fee or subscription (depending on the company), you can rent computing power, and benefit from the Bitcoins mined by it.
While the return can be as high as 40%, there are some caveats. A UK-based cloud mining company, Shamining, is one way you can get involved in this.
There are quite a few warnings though. Substantial investment is required to rent enough computing power. Unlike earning interest on Crypto, you never get your initial stake given back: you just hope that it will earn enough Bitcoin to make you a profit or income. You also don’t know how difficult Bitcoin is going to get to find, or what price it will be.
Equally, the companies are unregulated because they’re offering a service for a fee, though the reputable ones will do Know Your Customer (KYC) and Anti Money Laundering (AML) checking of customers. They can easily disappear overnight or just stop paying out. It has happened.
Maybe you’re not a “set and forget” type and you like the thrill of victory and the agony of defeat? In which case, trading may be an option for you.
Trading is rather like the lottery: your chances of making money are a lot less than you would instinctively believe, though, of course, it’s possible to make money if you successfully buy low and sell high. There are a number of things not working in your favour, though. There’s no safety net, your capital is most definitely at risk. The price can vary quite wildly, and you can find your investment worth 10% less in a matter of minutes. If you panic sell, and that’s locked in. Much of the time the Crypto moves sideways providing no profit whatsoever. Then it can move 10% up and back down again while you’re not looking…
The point is: trading is stressful and risky. If you must buy something at an exchange, then use the one with the least fees, an example is INX Crypto. Exchanges like Coinbase are well-known, but with much higher fees.
Buy and HODL
Or perhaps you want to just buy and not sell? “HODL” is reputed to stand for “Hold on for dear life”, though some think it’s just a typo.
If you buy Bitcoin, your sole profit on that comes when you sell it again, hopefully for more dollars than you paid for it. Bitcoin generally goes up in the long-term (say, five years), but swings wildly in the short- and medium- terms (anything up to five years).
The cheapest way to buy Bitcoin would also be an exchange: you have much more control over the price you buy at, and the fees are cheaper. However, some of this cost advantage is lost if you need to send it anywhere else (such as to a wallet or lending app) because of transmission fees. Sometimes it’s cheaper to buy Bitcoin “nearer” to where you want to use it.
As a strategy, HODL is missing one thing: it doesn’t make your assets work. They just sit there. That’s where you can combine a HODL strategy with something more useful.
Earning interest on your Bitcoin with AQRU
If there’s such a thing as a passively active approach, AQRU is it. Our job (via app and website, free sign-up) is to do a similar thing in decentralised finance that banks do in the “real” financial system. That means borrowing resources from people like you (deposits), and then using our expertise behind the scenes to make more money: lending to businesses, providing liquidity to markets, etc. In return, we pay you a fee in the form of interest or yield.
The AQRU difference is that working in Crypto markets means there’s less cash floating about, and thus there’s more opportunity to charge a premium for lending it. Our promise of a 2.5% yield per year on Bitcoin (and Ethereum) is sizeable compared to what’s currently on offer in the high street.
So, at AQRU, we are an Authorised Digital Assets Provider that can look after your Bitcoin and pay you an interest/yield of 2.5% per year without you having to do a thing.
We don’t lock up your money, charge a deposit fee, or charge a fee for withdrawing to a “fiat” currency. You can also see the interest being added in real-time, which is kind of fun! There is a $20 fee for withdrawing to a Cryptocurrency, which is our only fee.
If you invest in stablecoins (that is: coins that track assets such as the US Dollar and aren’t as volatile as regular Crypto), you can get up to a 7% yield, which compares astonishingly with the equivalent savings accounts in current markets.
You can even buy tokens in the app through our partnership with trusted provider MoonPay, and save some transmission fees.
We hope that you will consider the benefits of HODL+AQRU. To help you decide, you can sign up for free and get a $10 USDC stablecoin investment made automatically. Once you’re verified, you can deposit using a debit card or bank transfer, use MoonPay or send in external Crypto. The minimum deposit is 100 Euro or equivalent. Don’t miss out, get started and start earning interest on your Bitcoin today!