Curious about how to trade bitcoin and make profit? Over recent market cycles, turning BTC into gains has grown more complex: prices can swing sharply, “free bitcoin” pitches often mask a scam, and small, at‑home bitcoin mining setups rarely cover costs as competition intensifies.
Even so, pathways to earn still exist with this digital asset. People buy and sell on an exchange, lend holdings, hold long term, or accept BTC as income. Because cryptocurrency is volatile, outcomes vary — rising prices can help you, while a downturn can quickly reduce account value.
History keeps some investors optimistic about the currency’s future. Around 2010, a single coin traded near nine cents. By December 2024, the price first topped the six‑figure mark, and for long stretches in 2025, BTC hovered above that threshold.
Holding Bitcoin for Long‑Range Crypto Investing
Difficulty: Low.
Return: Variable; driven by allocation size and price swings.
Choosing a buy‑and‑hold approach — often nicknamed “HODL” in crypto circles — aims for long‑term gains if your eventual sale happens above your entry price. This strategy requires patience through volatility on the blockchain and the discipline to avoid frequent trading.
Originally designed for peer‑to‑peer transactions, Bitcoin evolved into a store‑of‑value play for many. If you hold bitcoin, consider diversification: avoid concentrating too much in one token or asset, and never deploy money you cannot afford to lose. A common rule of thumb is keeping exposure to higher‑risk cryptocurrencies, including BTC, to roughly a tenth of a portfolio.
What About Bitcoin Exchange‑Traded Funds?
In early 2024, U.S. regulators cleared several spot funds tied directly to BTC’s market price. That decision opened a door for retirement savers — including certain 401(k) participants — to gain BTC exposure without owning coins in a wallet.
For fund‑focused investors, these vehicles can slot into a diversified mix of assets. However, unlike holding cryptocurrency itself, you cannot spend fund shares, self‑custody them in a cold wallet, or interact with the decentralized network. Price turbulence can still mirror bitcoin’s volatility.
Want a primer on access points and platforms? Learn where and how to buy these bitcoin‑linked funds.
Earning BTC via Credit Card Rewards
Difficulty: Low.
Return: Typically up to about three percent in select categories; around one percent elsewhere.
Certain issuers let cardholders collect rewards denominated in cryptocurrency. Similar to cash‑back programs, a slice of each transaction can be converted into BTC or other cryptocurrencies and credited to your account. Some products also provide intro bonuses for meeting spend thresholds.
Note that fees or a pricing spread may reduce rewards. A spread — the gap between market rate and the rate a provider uses — can affect both accumulation and redemption, yielding a less favorable conversion into or out of bitcoin.
Explore top crypto rewards cards if you prefer earning digital assets instead of traditional points.
Lending Bitcoin for Passive Income
Difficulty: Moderate.
Return: Roughly 4.5% to 7.25% annually, based on recent listings.
Owners of BTC sometimes lend coins to other users or institutions to earn interest in crypto. Aggregator snapshots as of March 26, 2025, show offers in the mid‑single‑digit range, though rates and terms change frequently.
Scrutinize risk before you fund your account: borrower defaults can lead to partial or total loss, and the category remains young within cryptocurrency trading. Several platforms paused or exited lending in 2022. One well‑known example involved a program where withdrawals were halted for more than a year; by February 2024, state authorities announced a plan for over $1.1 billion to be returned to affected customers, underscoring both recovery efforts and the hazards of the space.
Accepting Payments or Tips in Bitcoin
Difficulty: Moderate.
Return: Depends on how much you receive in BTC and future price action.
Freelancers and business owners can add a “pay with bitcoin” option to collect income in cryptocurrency. Payment processors — including services associated with brands like Coinbase or BitPay — can help you generate invoices or checkout flows that settle in BTC.
Implementation is usually straightforward, but taxes and risk management add complexity. Some providers enable immediate setup, while others require verification over several days and support multiple cryptocurrencies. If your aim is to keep coins, choose a service that settles in BTC rather than automatically converting into fiat currency.
Day Trading Bitcoin and Other Cryptocurrency Trading
Difficulty: High.
Return: Uncertain; depends on trade size, frequency, and price motion.
Short‑term speculation — jumping in and out of positions as the market moves — can generate profits, yet the odds often favor losses. Even seasoned stock traders armed with decades of market data struggle to beat simple, broad‑index strategies; in crypto, with far less historical context, the challenge grows.
Frequent trading also adds tax complexity. Accurate records of each transaction, including cost basis and proceeds for BTC or other coins, are crucial at filing time. Before attempting active strategies, consider consulting a tax professional and organizing a system to track trades across your exchange accounts.
Volatility provides opportunity but also amplifies risk. Timing entries and exits in a market as erratic as bitcoin makes the classic “buy low, sell high” ideal hard to execute. If you still pursue it, start with small amounts and apply strict risk limits.
What About Bitcoin Mining?
Bitcoin mining can, in theory, generate coins as income, but for most individuals the math doesn’t pencil out. Specialized ASIC hardware is expensive, electricity costs can be substantial, and rewards are not guaranteed.
Under Bitcoin’s proof‑of‑work design, miners validate transactions on a distributed ledger to secure the network. Approximately every ten minutes, a new block is added, and the successful miner receives 3.125 BTC plus user‑paid transaction fees, which can add thousands of dollars per block. This peer‑to‑peer system remains decentralized by relying on competing miners worldwide.
To compete, an ASIC often costs well above $10,000, and ongoing power usage can run into the thousands per year. Mining pools let participants combine hash power and share rewards, but pools charge fees, and more participants dilute each member’s payout.
Neither the author nor the editor held positions in the investments mentioned at the time of publication.
Frequently Asked Questions
- Staking and Bitcoin: BTC uses proof‑of‑work, so native staking is not available. Passive income options that resemble staking’s “earn while you hold” idea typically involve lending or other yield programs. By contrast, proof‑of‑stake networks such as Ethereum allow validators to stake the network’s token.
- Claiming Tax Relief on BTC Losses: If you sell bitcoins for less than your cost basis, U.S. rules generally allow up to $3,000 of net capital losses to offset ordinary income each year, with the remainder carried forward to future years. Many investors also consider tax‑loss harvesting strategies for cryptocurrency where appropriate.
