How to choose a reliable crypto exchanger. In this guide, we will tell you how to earn from the exchange of cryptocurrencies and where you can profitably exchange cryptoassets for fiat currencies.
With the advent of cryptocurrencies, many things have changed: business, communication and financial relationships. Before the advent of decentralized blockchain technology, you had to set up your own business in order to make money on the exchange of currencies. Moreover, institutions had to obtain special licenses in order to conduct these and other currency transactions. Of course, nothing has changed in this regard, although with the advent of Internet technology, the registration process itself has become easier. But it was cryptocurrencies that gave impetus to the formation of a fundamentally new market. Now, users don’t even have to leave their computers to make money on the exchange. What’s to say: now all it takes is a smartphone with an Internet connection. Could you imagine this 10 years ago?
How to make money exchanging cryptocurrencies
Using your computer or cell phone, you can mine cryptocurrencies, become your own retailer and sell goods or offer services, and conduct cryptocurrency exchanges – all from the comfort of your couch. In this guide, you will learn how to make money from cryptocurrency exchange using different services, how much you can earn and where to start the path of an individual entrepreneur in this field. Let’s go over everything in order.
How cryptocurrency exchange is regulated
Before taking the plunge into this new kind of business, you need to know the key rules. Of course, you can use foreign sites and payment systems to bypass taxes. But let’s be frank: all that nerve and secrecy is not worth the money you can save by avoiding income tax.
To begin with, cryptocurrency exchange is not formally regulated in any way yet. Requirements for cryptocurrency transactions will be established by the law “On Digital Assets,” which has not yet entered into force, developed in 2017.
There is no strict guidance on how you must register to operate: as a sole proprietor (PE) or self-employed. If you’re worried about the consequences, it’s best to consult a knowledgeable lawyer who can tell you about all the pitfalls.
According to the chapter of the Tax Code, any income of an individual, with some exceptions, is subject to personal income tax. This document defines the procedure and rules for paying taxes, depending on the type of income. It is unlikely that the tax office will be interested in you if you conduct several transactions in small amounts per month. But the constant circulation of large sums may attract the attention of the Federal Tax Service and lead to the blocking of funds in your accounts. That’s why we urge you to act in accordance with the law.
How cryptocurrency exchangers work: what you can earn from
The principle of cryptocurrency exchangers is quite simple. There are two main types of exchangers:
- Centralized, in which users exchange cryptocurrency with the service itself;
- Decentralized or peer-to-peer, in which users exchange with each other, and the platform acts as an analogue of a broker and guarantees the security of transactions.
We will not describe the whole process, starting from registration, but explain only the principle of exchange. How centralized cryptocurrency exchangers work:
You transfer money to the details of the service and pay a commission (it can be taken into account when calculating the purchase rate);
After the money is credited to the account of the exchanger, you are sent a predetermined amount in cryptocurrency.
Exchange of currency and cryptocurrencies through P2P-platforms occurs as follows:
- You choose a seller and leave a purchase order;
- The seller sends you the details to transfer funds;
- At this time, the amount specified in the application is frozen in the seller’s account until he confirms the payment. In this way, the cryptocurrency exchanger ensures transaction security;
- You send money to the details of the seller;
- The seller confirms that he has received money from you;
- The cryptocurrency is automatically sent to your internal P2P exchanger account.
As you can see, there is nothing complicated about this. It remains to figure out how to become this very seller and make money from cryptocurrency exchange.
How cryptocurrencies are exchanged at online exchangers
You do not need to perform any specific actions to start earning from the exchange of digital assets. However, there are a number of rules and guidelines that will help you at the start. Keep in mind that when using P2P exchanges, you will need to go through full verification (mail, phone, passport and selfies). This will expand transaction limits and increase trust from users. Potential clients will be more willing to work with verified accounts than with anonymous ones.
To start earning from exchanging cryptocurrencies online, you must first get a good reputation. The better the reputation, the higher the chance that users will turn to you. To do this, you need to make several transactions, get reviews and a high rating. You need to respond quickly to customer requests and make no mistakes. The first transactions may bring you a small loss, but think of it as payment for your reputation as a reliable counterparty.
Is electronic cryptocurrency exchange in demand
Yes, very much so. And the demand continues to grow. Exchangers keep transparent user statistics and show reviews, ratings, and the number of transactions made by the user. You can easily check for yourself how many transactions a particular seller has made and calculate how much his earnings could be on electronic cryptocurrency exchange. On average, sellers can earn from 1% to 5% per crypto-asset transaction. And that’s not taking into account the fact that they buy just as cheaply.
Which card you can exchange cryptocurrency to
Exchangers do not have any restrictions on this account. You can use cards of any banks and any electronic payment systems. Focus on what you yourself use, and what is in demand in the market. But please keep in mind, that some companies can impose their own restrictions, and exchanging cryptocurrencies to your card may be difficult. For example, the payment system PayPal restricts work with cryptocurrency and can block accounts if it suspects that you exchanged bitcoins with them.
What are the cryptocurrency exchange services that allow you to earn
You can make money from the exchange only with the help of P2P exchangers. Or you can organize your own exchanger and earn with it. Listed below are popular exchangers for earning:
- LocalBitcoins;
- Binance (P2P section);
- Paxful;
- Bitzlato;
- LocalCoinSwap;
- Sky Crypto.
There is another way to earn on cryptocurrency exchange services: many cryptocurrency exchangers offer an affiliate program, which allows you to earn a percentage of commission on purchases/sales by invited users. For example, Changelly has a profitable affiliate program for cryptocurrency exchange.
Services for cryptocurrency exchange
The most profitable online cryptocurrency exchanger
It is impossible to answer this question unambiguously, because the market is dynamic and the supply/demand balance is constantly changing. Now the lowest rate to buy allows you to set one exchanger, and in a couple of hours – another. It is impossible to predict.
Therefore, in order to reach a wider audience, you can use several online cryptocurrency exchangers at once. In this case, you don’t even need to change your details – use the same cards and wallets for different cryptocurrency exchangers.
What is the best cryptocurrency exchange site to choose
You should be guided, first of all, by your own comfort. Evaluate how favorable conditions the service offers, what restrictions there are and how big the flow of applications is. It may turn out that the most popular site due to high competition brings the least buyers. At the same time, a less popular platform may bring a higher and more stable flow of customers. Try different cryptocurrency exchange sites and compare in the field where it works best.
Cryptocurrency exchanges from $10
Pay attention to the limits set by the exchangers. By the way, it is not easy to find exchangers that provide purchase for small amounts from 10$. On many services you can notice that the minimum limit can be from $50 to $100. This is another feature of peer-to-peer cryptocurrency exchangers: you can exchange from $10 or even less. Some exchangers even have no limits, i.e. you can make transactions for $1, but this can lead to a large flow of micro requests, and it is not profitable to exchange such amounts, so sellers themselves set a limit of $10 and more.
How much can you earn when exchanging money for cryptocurrency
Here, everything depends on several factors:
- The amount you dispose of. You may simply not have enough amount for full conversion;
- Coverage – whether you offer an exchange from just one bank card or multiple banks and payment systems;
- Application flow. Your competitors may be more reliable and offer better prices for exchanging money for cryptocurrency;
- Demand. Sometimes trading activity drops and people are reluctant to use cryptocurrencies.
These are just some of the factors that are most obvious. In fact, there are many more. You can make $10 in a month and you can make $10,000. A lot depends on you as well. If you have a small flow, analyze why this is the case. Come up with original (though not necessarily) ways to attract customers. For example, write that users receive cashback. In general, fantasize, and you can come to success.
Where is it possible to exchange cryptocurrency for fiat
You can exchange cryptocurrency to rubles at the sites that we listed above (internal link). By the way, it is also possible on Binance. They support ruble pairs, deposits in rubles and the cryptocurrency exchange has a section for P2P exchange.
Are there cryptocurrency exchangers without fees?
We wrote about this in our other articles about buying Bitcoin and Ethereum. Let’s not dwell on it for a long time and describe briefly: any business exists due to profit, so the phrase “cryptocurrency exchanger without commission” is nothing more than a marketing ploy. Yes, it is possible. Some exchangers really don’t charge commission, but simply sell at a higher rate and buy at a lower one.
But you shouldn’t get too hung up on that. The commission of cryptocurrency exchangers on average is only 0.5% – 1% for the exchange. And it will be factored into the price so that you will earn more than 1% – 3% or more anyway. Now imagine that with a two-way exchange, the margin would be around 2% – 6%. Not bad?
If you want to know which cryptocurrency exchanger with the lowest commission – that would be LocalCryptos. Unlike other platforms, here ad creators pay 0.25% for exchange, and respondents – 0.75%. On such platforms as LocalBitcoins and Paxful 1% commission is paid only by users who placed an order.
To summarize briefly: cryptocurrency exchange without commission is possible only when recalculating the rate.
Where is the best exchange rate for cryptocurrencies
Unfortunately, there are no sites that monitor P2P exchanges and allow you to compare prices at different sites for different payment methods. Perhaps this is due to the technical complexity of the organization or is not demanded. Cryptocurrency exchangers’ rates can be monitored by BestChange service. However, it only monitors exchange rates of centralized services, which can be used to make money on affiliate programs.
Here’s a little tip: you can sell cryptocurrency at one site and sell it at another, depending on where the rate is more profitable. That way, you can exchange cryptocurrencies at a favorable rate. However, first, calculate the commissions when transferring from one site to another to make sure it is worthwhile. This approach is called interchange arbitrage. It is often used by traders and existed long before the advent of the crypto market.
Profitable exchange of cryptocurrencies
If you just want to buy Bitcoin (link to the first article) or sell it (link to the second article), we wrote about how to do that in our previous articles, so let’s just briefly list the reliable cryptocurrency exchangers (not including peer-to-peer):
Coinbase (not available in all countries);
Mercuryo. Supports its own wallet, where you can exchange cryptocurrency (Mercuryo | Multicurrency Crypto Wallet) for rubles and other currencies;
Coinmama.
The list of exchangers is limited because most services offer a rather high rate, so they can hardly be called profitable. Profitable cryptocurrency exchanger you can find among such major exchangers as Binance, CEX.io, OKEx, Kraken and others. There is no need to look only for those platforms where it is cheapest to convert cryptoassets. Convenience and speed of conversion are equally important.
Which wallet to choose to exchange cryptocurrencies
Not all cryptocurrency wallets support buy/sell functionality. P2P-provide storage services, but this is not the safest way for holders. It’s much safer to use cryptocurrency wallets with private keys, such as Mercuryo, Coinbase or Trust Wallet. You can use them to securely exchange cryptocurrency right in your mobile app. These are convenient and fast cryptocurrency exchange wallets.
What’s the best cryptocurrency wallet with exchange capabilities
It depends on your individual preferences and other factors. Some wallets are quite safe, but they have other limitations. For example, Coinbase is considered one of the safest cryptocurrency exchange wallets, but it is not available in all countries. The other two wallets, Mercuryo and Trust Wallet, are safe and available in most countries. You can use them to buy cryptocurrency for rubles, euros and other fiat currencies.
Is it possible to earn money by exchanging cryptocurrencies
Yes. You can become a seller or just invest and sell cryptocurrencies at a higher price, or you can become a trader and earn from the difference in rates. The method you choose depends on your skills and goals. The more complex the method, the higher the potential profit, but the risks are also higher, so they require high skills. For example, earning on cryptocurrency exchange through P2P exchanges does not require crypto-trading skills: you just need to respond to users’ requests and transfer money. At the same time, the risks are quite low. Trading, on the other hand, is associated with high risks. You can lose your capital in just one month if you have no trading skills.
If you want to earn income without skills, then find a suitable cryptocurrency exchanger website and become a seller. At first, it will be hard to get bids and there won’t be many of them. But with the right persistence you will be able to reach a stable income.