As the awareness around cryptocurrencies keeps growing, so do the passive money-making opportunities around them. We have come a long way from traditional mining of Bitcoin through Proof of Work and today there are newer ways to earn income. Investors who jumped on the crypto bandwagon early and held on to their assets managed to multiply their fortunes but is it too late today to make money from cryptocurrency? The answer is no.
If you have already invested in cryptocurrencies or are planning to, we bring to you strategies that will let you add extra income to your crypto investment.
Investors must remember that the crypto market is volatile and they must tread carefully to avoid losing their initial investment. It is crucial to do your own research (DYOR) before making any moves.
Let us dive in to find more –
1. HODL
This one is an absolute no-brainer but just like investing in stocks, investors can buy the coins they are interested in and wait for their value to rise. Once the market moves, you can sell at a profit. Few exchanges offer interest for holding crypto assets in their digital wallets. We shall explore these options in the points below.
2. Staking
Staking is a mechanism where users lock their coins in a crypto wallet to help secure a blockchain in exchange for being rewarded in cryptocurrencies. Staking helps in securing and processing transactions on the network. Instead of letting their crypto assets lie idle, long-term investors are keen to stake their coins to earn potential returns.
Platforms like Crypto.com, Celsius and BlockFi offer between options to stake from flexible, one, two or three months with an interest ranging between 5% to 15% on different cryptocurrencies. For instance, Binance staking offers up to 32.34% APY for staking few assets.
Ethereum-based iOWN Token will be available for staking in the future. The token’s core utility is to enable users to participate in equity crowdfunding campaigns on the iOWNX platform.
3. Crypto Lending
Each cryptocurrency exchange operates differently and not everyone lets the investor lend out their crypto. The interest rates that investors can earn vary depending on the currency they loan out and the type of loan.
There are flexible and fixed types of loans. While the fixed exchange allows investors to deposit for a predetermined interest typically for seven days to 90 days, you can withdraw your crypto anytime in a flexi arrangement. Obviously, the rate for locking for a longer period in fixed pays higher interest than flexible. Some exchanges or platforms pay a daily APR allowing you to earn compound interest on the crypto investments. For instance, rewards on Celsius network are calculated every Friday and distributed every Monday.
4. Mining
Years back, miners invested in different types of hardware like ASICs to mine Bitcoin but today a mining software can handle the process. A cryptocurrency mining software will connect your machine to the blockchain to transform it into a mining node.
The software delivers the mining hardware’s work to the entire network and transfers the completed work from other miners on the network. Users can view stats like hash rate, temperature, speed of the fan, etc. For example, to mine Ethereum, many users opt for Ethminer, which supports GPU hardware like AMD and Nvidia.
5. Yield Farming