Price of bitcoin has been up by more than 100 per cent this year. You need to read this post to learn about the several legitimate ways to make money with bitcoin in Nigeria. Aside from investing, we have identified 5 other ways to earn bitcoin.
This practical guide will help anyone that wants to make money from bitcoin in Nigeria. More accurately, help you legitimately earn bitcoin with a reasonable amount of effort.
1. Investing in bitcoin
The world is increasingly reliant on the internet, and bitcoin, a secure digital currency, has piqued the interest of many investors. Some believe that bitcoin would eventually replace paper money as everyone in the world gets on the internet and desire a faster, transparent means to transfer value, while others believe bitcoin will be the digital gold existing side-by-side with paper money.
Regardless of the future of bitcoin, this digital currency has provided an exciting opportunity for everyone to have an entirely new asset class in their investment portfolio. Bitcoin is a high-profit investment vehicle albeit with high risk. Returns on bitcoin have performed better than the all-share index of most stock exchanges on the African continent.
2. Trading bitcoin
Another way to make money from bitcoin is by trying to benefit from the daily upward and downward movement of price. There are several methods traders use to make money in the market, but the two listed below are common and practicable:
It involves you buying a portion of bitcoin from an exchange and selling it in some hours/weeks/months when the prices go up. Although it sounds effortless, there are some important details to note about this approach.
First, there are about a thousand cryptocurrency exchanges around these days, and some of them are just pure scams. The critical thing you want to do is find the safest and most secure cryptocurrency exchange you want to use. International exchanges like Binance and Bittrex provide the opportunity to trade your bitcoin with several other profitable cryptoassets.
The second thing to know is that bitcoin is quite volatile, and it’s difficult to predict what the price will be in the future. In other words, its price could experience sharp fluctuations in a short period. For example, the price of bitcoin fell by about 35 per cent in November 2018 alone. So, to be able to make some nice profit you have to learn how to anticipate the market correctly through the use of historical data and learning from experienced traders.
A market maker is at both ends of a bitcoin trade. Market makers earn their profits by providing liquidity for the market. They do that by creating limit orders in both directions, their profit is the spread on the bid and ask (Bid is a buy order while Ask is a sell order).
For example, the price of bitcoin could be at N1, 300, 000. You create a buy order for N1, 299, 900 and a sell order for N1,300, 100. When both orders get filled, you earn N200 as profit. That seems small, but considering that you can keep doing this same thing over and over again and quickly get to 100 trades a day, it makes sense for many traders. (Note: professional traders make use of a trading bot to execute these transactions).
3. Bitcoin arbitrage between exchanges
The price of bitcoin at any moment depends upon which exchange you are using at that particular time. Bitcoin arbitrage is the act of taking advantage of the price difference between two or more exchanges. An arbitrage opportunity exists when there is the opportunity to buy something for a low price and sell it for a higher price on a different exchange.
How does this work? You register on different exchanges like Luno, Remitano and other cryptocurrency exchanges that are easy to use. You set up ready to buy on one exchange and transfer the bitcoin to another exchange to sell at a profit, taking advantage of the disparity in prices.
Of course, it’s not that easy to buy bitcoin on one exchange and then transfer and sell it on another exchange. You have to put into consideration fees and time delays between transferring the bitcoin from one wallet to another. Only if it would be profitable then should you embark on arbitrage.
4. Making money from Remittance
Nigerians living in the diaspora are often looking for a way to send money to their families or business partners in Nigeria while saving money on transfer fees. That is an opportunity for you.
You can help people transfer money by receiving what they intend to send in a specific bitcoin price, converting it to Naira, and handing the money over to the recipient here in the country. Of course, you have to ensure you have adjusted the agreed bitcoin rate to cover for any possible loss that could arise as a result of a decline in the price of bitcoin.
5. Freelancing – Writing for blogs
If you have a knack for words and you are interested in the blockchain industry, you should consider becoming a blockchain journalist or writer. The industry is evolving every day, and there’s a growing demand for the latest news and accurate information on blockchain and cryptoassets.
Also, as a freelancer or contractor in Nigeria working for international businesses, you could request for payment in bitcoin. Not every business would agree to that, but some technology companies might be willing to use that channel. With bitcoin, you receive payments instantly and at no extra charge to you.
6. Lend your bitcoins to traders for interest
Lending out your bitcoin via margin loans is relatively easy. The market consists of traders who want to borrow to increase their trading capital and potential returns. Cryptocurrency exchanges like BitMEX, Poloniex and Bitfinex allow leveraged trading financed by lenders.
The process for lending on each of these exchanges is simple. Deposit your bitcoin, then move funds to “lending”, and finally lend them out at your terms, and earn daily interest.