The Four Ways People Actually Make Money With Crypto
Ask most people how to make money with crypto and you'll get one answer: buy low, sell high. That's real, but it's one method out of four. Each of the four approaches below has a different time commitment, a different skill requirement, and a completely different risk profile. Knowing which one fits your situation matters more than picking the "best" one.
1. Investing: Buying and Holding
The simplest method is buying an asset and holding it. Bitcoin and Ethereum remain the two largest and most widely held cryptocurrencies. Bitcoin is generally treated as a commodity and store of value — the gold comparison. Ethereum's value comes from smart contracts and programmability.
The long-term chart shows both the appeal and the cost. Bitcoin moved from roughly a dollar to near 18,000 in 2017–18, dropped to around 4,000, ran to about 60,000 in 2021, fell back to 18,000, then traded in the 50,000–70,000 range. Ethereum went from near a dollar to around 1,300, back to roughly 100, then through multiple cycles of its own. The returns existed. The waiting period was eight years or more.
Where you hold also affects your outcome. In the US and various other countries, crypto can be held inside a retirement account, meaning capital gains treatment differs depending on the account type and setup. If you already plan to hold for years, it's worth comparing a taxable brokerage approach against holding Bitcoin and Ethereum inside a crypto IRA. iTrustCapital is one of the providers built specifically for this, allowing crypto to sit inside a self-directed IRA structure rather than a standard exchange account.
How to Find Assets Worth Holding
Free tools like CoinMarketCap and CoinGecko list assets by market cap and let you sort by category — decentralized finance, layer 1s, AI infrastructure, and so on. This mirrors how stock investors think in sectors: pharmaceuticals, utilities, tech. Pick a category you understand, then drill into individual protocols. DeFi Llama is useful for deeper protocol stats, including total value locked over time, which helps compare similar projects apples to apples.
2. Trading: Shorter Timeframes, Active Involvement
Trading means buying and selling over days or weeks rather than years. Some traders work spot markets only. Others use leverage, subject to regional rules and exchange availability.
This method requires a process. Indicators like MACD, RSI, and OBV are standard starting points, and many traders layer custom scripts on top. What separates a trading plan from gambling is repeatability — the same entry rules, the same exit rules, the same position size every time. Learning how to read crypto charts with technical indicators is the prerequisite, not the optional extra.
3. DeFi and Yield: Earning on Assets You Already Own
The third method produces income from holdings rather than price appreciation.
Liquidity pools. Think of a currency exchange at an airport: it must hold both currencies to facilitate swaps, and it charges a fee. Providing liquidity makes you part of that exchange, earning a share of trading fees. Pools can be two-sided or single-sided, and impermanent loss — effectively an opportunity cost versus simply holding — needs to be modeled before you deposit.
Lending. Deposit assets into a lending protocol and earn interest from over-collateralized borrowers. If a borrower's collateral falls too far, they're liquidated, which is what protects lenders.
Staking. Several variations exist, and they differ in how your position grows — some issue a receipt token that appreciates, others pay rewards directly. Understanding the difference between staking and yield farming returns prevents a lot of expensive confusion.
Looping with leverage. Deposit $10,000 of Ethereum as collateral, borrow $3,000 in stablecoins, buy more Ethereum, redeposit. This is not passive income — it's leverage, similar to a stock margin loan, and loan-to-value ratios and liquidation thresholds govern whether it survives a drawdown.
4. Copy Trading: Outsourcing the Execution
If you don't have time to trade or don't yet trust your own execution, copy trading lets you mirror someone who does. You browse traders on a platform, review their statistics and copier counts, allocate an amount, and your account then replicates their entries and exits automatically. Performance fees typically range from 10% to 30% of profits.
The work shifts from trading to selection and allocation. Track record length, maximum drawdown, and position sizing discipline matter far more than a headline return percentage. Start by learning how to choose a copy trader using real metrics before funding a single follow.
Which Method Fits You?
Investing demands patience. Trading demands time and discipline. DeFi demands technical understanding. Copy trading demands judgment about other people. Most people eventually combine two or three, but starting with one and learning it properly beats spreading yourself thin across all four.
If you want structured courses on each of these four paths, plus weekday live sessions and a community where questions get answered daily, you can work through the full Crypto School training on all four methods at your own pace.
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