Who Makes Money in Crypto and How? Market Players

The cryptocurrency market is an entire UNIVERSE, with a wide variety of users, each with their own METHOD OF PROFITING and influencing the cryptosystem. Let’s take a closer LOOK at the market participants and how they MAKE MONEY.

Venture Capital Funds: These are COMPANIES that invest cash into blockchain startups and crypto projects. They IDENTIFY young, promising ideas at an early stage and POUR in their own and investors' money. Venture capital funds MAKE HUGE RETURNS when the startups they’ve INVESTED IN TAKE OFF, and the price of their coins or tokens SKYROCKETS.

Institutional Investors are the REAL WHALES in the crypto ocean. These include LARGE financial entities like pension funds, hedge funds, and BIG BANKERS. These GIANTS invest ENORMOUS AMOUNTS in cryptocurrencies and blockchain projects. They BACK both NEW STARTUPS and ESTABLISHED COMPANIES.

The influence of these TITANS on the crypto market KEEPS GROWING. When they decide to INVEST or WITHDRAW FUNDS from an asset, its price either SOARS or PLUMMETS. Just a SLIGHT MOVE from an institutional investor can cause MASS PANIC in the market!

Hedge Funds are also major players, leveraging various strategies to profit from market fluctuations.

Startup Incubators (like Silicon Valley) are the players who PICK UP PROMISING PROJECTS from the GROUND and make them PROFITABLE. These incubators are the TRUE SUPPLIERS OF TOP CRYPTOCURRENCIES!

They TAKE young crypto ideas UNDER THEIR WING, INFUSING them with RESOURCES to help them develop. They CONNECT YOUNG IDEAS with WEALTHY VENTURE INVESTORS. Sometimes incubators also INVEST CASH into their protégés, sensing PROFITABLE POTENTIAL.

These smart people earn by receiving a SHARE of the coins from the projects in exchange for their financial and networking support, or by BUYING tokens at a BARGAIN before the project HITS THE MARKET. Then, when the price SHOOTS UP, they CASH OUT for several TIMES their investment!

Miners are the WORKHORSES who ensure the security and operation of the blockchain by solving mathematical problems and adding new blocks to the chain. They earn a COMMISSION from transactions and FRESHLY MINTED COINS. However, this work requires both technology and energy costs.

Traders are SPECULATORS who BUY and SELL CRYPTO on exchanges. They profit from PRICE FLUCTUATIONS and the market’s VOLATILITY. Their strategies can be short-term (day traders) or medium-term (position traders).

Hodlers are market participants who HOLD ONTO CRYPTO for YEARS. They BELIEVE that the coin WILL SKYROCKET, so they HOLD ON TIGHT, hoping to MAKE A KILLING in the future.

Market Makers are the primary MARKET REGULATORS. They CREATE SUPPLY AND DEMAND on exchanges and earn from the difference between buying and selling prices.
Crypto market makers play a key role in providing liquidity and stabilizing prices. Their profit mainly comes from the bid-ask spread and commissions charged by exchanges. In 2024, key players like Gotbit, FalconX, Wintermute, DWF Labs, GSR Markets, Antier, and Jane Street stand out with their diverse strategies and contributions to market growth.
Their roles range from handling large orders and algorithmic trading to offering risk management solutions. As cryptocurrencies GROW, these GIANTS will become EVEN MORE IMPORTANT. They’ve already BROUGHT INSTITUTIONAL INVESTORS and KEEP THE EXCHANGE ENVIRONMENT ACTIVE.

Each of these groups contributes to the functioning of the cryptocurrency market. Together, they create a dynamic and innovative space where different strategies and approaches can lead to successful investments.

How Do People Make Money in Crypto?

Trading – Earning on minimal price changes of cryptocurrencies. Traders buy cryptocurrencies, wait for them to increase in value by a few percent, and sell them. Most people make money on cryptocurrencies through trading.
For example, the price of Dogecoin fluctuates every minute. Traders can buy and sell it several times a day, earning around 1–10% of their invested funds on each transaction.

Portfolio – Long-term investments. Investors buy cryptocurrencies for a period of 1 year to several years to profit from their overall growth. Investing can yield as much or even more than trading, with less time commitment. However, the challenge is having the patience to wait, which suits some people but not others.
Not all cryptocurrencies grow, but if you find promising ones, you can multiply your capital. The most striking example is the rise of Bitcoin, which has increased by 670,625% since 2012.

Participating in Token Sales – Buying coins from new blockchain startups before they become available to the general public. There are different token sale mechanisms:

• ICO – CLASSIC INITIAL COIN OFFERING. The startup MINTS coins and sells them to anyone

interested. In 2017, there was a REAL BOOM of ICOs, but now they have become outdated.

• IEO – INITIAL EXCHANGE OFFERING. Here, the project PARTNERS with a CENTRALIZED exchange and sells tokens at minimal PRICES.
• IDO – Initial Decentralized Offering: the startup raises funds on a decentralized exchange, launching and selling tokens almost simultaneously.

The GOAL OF THE GAME is to GET TOKENS at LOW PRICES, and when they RISE, sell them as quickly as possible.
You can track token sales on startup websites, cryptocurrency exchanges, and special platforms like CoinList.

Airdrop – This is when a project GIVES AWAY FREE COINS to anyone willing to participate. You just need to COMPLETE A FEW SIMPLE TASKS, like subscribing, reposting, or even just BREATHING.

Crypto projects usually DISTRIBUTE such airdrops to PROMOTE themselves and ATTRACT NEW INVESTORS. You can track these FREE GIVEAWAYS through specialized services like Airdrops.io. However, remember that FREE CHEESE IS ONLY IN A MOUSETRAP. There are many projects, but very few drops, and the conditions for these projects are often not the most favorable!

A SEPARATE ASPECT is RETRODROPS. The main thing about them is that you DON'T NEED TO BUY COINS. You simply complete some EASY TASK, like subscribing, liking, or reposting. If you're LUCKY, you get a FEW FREE COINS.

Each airdrop has DIFFERENT TERMS. In some cases, the TOTAL REWARD POOL is DIVIDED among all participants. In others, EVERYONE RECEIVES A FIXED AMOUNT of coins. But DON’T EXPECT HUGE REWARDS.

Lending – This is when you LEND OUT YOUR CRYPTO. You give your coins to a cryptocurrency exchange, and they use them in their operations, paying you INTEREST. Different exchanges offer different RATES – ranging from 1% to 5% per year.
You can lend money not only to exchanges but also to other users and special lending platforms. However, working with crypto exchanges is the easiest since they usually support more cryptocurrencies and offer higher rates.

Staking – This is a COMPLETELY DIFFERENT STORY. Here, you LOCK YOUR COINS in a SPECIAL ACCOUNT to support the BLOCKCHAIN’S OPERATIONS. It’s like a BLOCKCHAIN DEPOSIT, if that makes more sense. For keeping your coins LOCKED UP, their number increases!

Staking can only be done with cryptocurrencies that operate on Proof-of-Stake (PoS). PoS is an algorithm where, to add new blocks to the blockchain and confirm transactions, you must own tokens of the network and lock them up for a certain period. Cryptocurrencies using PoS include EOS, Tezos, Tron, and Cosmos.

Staking is available on all exchanges, but each has its own rates. For example, Binance offers flexible staking starting from 0.79% and higher. You can also choose fixed staking terms for 30, 60, 90, or 120 days.

Trading ideas on the market