Five ways Bitcoin can work for you

Coinbase recently introduced Bitcoin-backed loans, giving users the ability to borrow up to $100,000 without selling their holdings. This move highlights the growing ways Bitcoin is being used not just as an investment but as a tool for financial flexibility.

Whether it’s leveraging Bitcoin for loans, trading on market volatility, or mining new coins, there are numerous opportunities to earn with the world’s first cryptocurrency. Here are five strategies to help you make the most of Bitcoin’s potential.

1. HODL (Hold on for dear life)

What if you could make money just by being patient? That’s the essence of HODLing—a strategy where investors buy Bitcoin and hold onto it for the long term, banking on its value increasing over time.

HODLing is popular among those who believe in Bitcoin’s long-term potential as a store of value. Instead of panicking during market dips, HODLers focus on the bigger picture and resist selling during short-term volatility. For those who trust in Bitcoin’s future, it’s a simple yet effective approach.

2. Trading

For those seeking more dynamic ways to profit, trading Bitcoin is an exciting option.

There are two popular methods:

• Day trading: Buying and selling Bitcoin within a single day to capitalize on short-term price movements.
• Swing trading: Holding Bitcoin for several days or weeks before selling when the price peaks.

Both methods rely on technical analysis—studying price charts and market trends to make informed predictions. While trading can be lucrative, it’s not without risks. Market volatility means prices can swing unpredictably, so beginners should start small and learn the ropes before diving in.

3. Loaning

Why sell your Bitcoin when you can borrow against it? Crypto loans allow users to use their Bitcoin as collateral to access funds without losing ownership of their assets.

For instance, Coinbase recently launched Bitcoin-backed loans, enabling customers to borrow up to $100,000 USDC. Here’s how it works:

• Users lock their Bitcoin as collateral, which is converted into a wrapped token (cbBTC) on the blockchain.
• The cbBTC token is transferred to a lending protocol, and the borrowed USDC is sent to the user’s account.

This approach lets Bitcoin holders unlock liquidity without having to sell during market dips. However, borrowers should be cautious—if Bitcoin’s price falls too low, their collateral could be liquidated.

4. Staking

Staking involves earning rewards by helping secure a blockchain network. While Bitcoin’s Proof of Work system doesn’t support staking, platforms like Babylon have found ways to bridge the gap.

Through Babylon’s Bitcoin staking protocol, users can lock up their BTC and earn rewards. This innovative solution allows Bitcoin holders to participate in staking, even though the network itself operates differently.

For newcomers, it’s essential to research how such platforms work and assess the risks involved before committing funds.

5. Mining

Mining is one of the oldest and most iconic ways to earn Bitcoin. It’s the process of verifying transactions and securing the network by solving complex mathematical puzzles.

Here’s a quick look at how it works:

1. Miners use powerful hardware to solve these puzzles.
2. The first miner to find the solution earns Bitcoin as a reward.
3. Transactions are added to the blockchain, ensuring its security and transparency.

However, mining has become increasingly competitive. Large-scale operations, like MARA Holdings, dominate the space, running thousands of machines around the clock. Additionally, setting up a mining operation involves high upfront costs, including specialized hardware, software, and significant electricity consumption.

For smaller players, navigating regulations is another challenge. In some cases, illegal mining operations have led to police crackdowns, like the seizure of 111 mining machines in Thailand last November.

Bitcoin Opportunities

Bitcoin isn’t just a digital currency—it’s a gateway to innovation and wealth-building opportunities. Whether you choose to HODL, trade, stake, or mine, each strategy offers unique risks and rewards. By aligning your approach with your goals and expertise, you can unlock Bitcoin’s full potential in today’s evolving financial landscape.