Are you wondering how to increase your passive income streams through Bitcoin and cryptocurrency? Would you want to know how to grow your cryptocurrency earnings without much stress?
If your answer is positive, you’re reading the right article.
As cryptocurrency is getting more mainstream, it opens creative ways for passive income. The idea of creating an income with cryptocurrency is to make money 24/7 without you being laboriously involved in the process. rather than taking unnecessary trading pitfalls, spending time doing domestic tasks, or letting your Bitcoin sit there and not earning a thing, you can now put your coins to work for you for as long as you want. Spend some time setting it up. Once they’re in place, they will continue to induce ongoing inflows for you with little or no trouble on your part.
To get you started, here are the top seven(7) possible ways on how to earn passively with Cryptocurrency.
- Cloud Mining
Cloud mining has been developed as a way to mine cryptocurrency by using rented cloud computing power without having the need to install or directly run any affiliated software or hardware.
People can even share in cryptocurrency mining by opening an account and paying a minimum cost. Therefore, cloud mining enterprises have made mining more accessible and profitable for a larger group of people.
Also Read: Free bitcoin mining sites 2023
- Affiliate Programs: Get Paid to refer a Friend
There are numerous crypto affiliate programs that pay you for referring new users to their platform.
Affiliate programs are free to join. Once you create an account, you’ll be given a special unique link. You can start participating in the link you’d like on social media, websites, blogs, and forums. Whenever a person signs up or makes a purchase using your link, you’ll get a commission.
The biggest advantage is that it’s quick to start and begin earning money. Plus, money would keep coming in days, weeks, and months, even years after you put in all that effort.
Still, chapter programs can be a great way to make some good income, If you formerly run a blog or website or have a huge following on social media.
There are numerous crypto accounts that pay interest, and the interest rates are frequently much more advanced than those in the traditional savings accounts. Unfortunately, these advanced rates come with high risks.
Generally, in a cryptocurrency loan agreement, the borrower and borrowee are individualities, not associations similar to banks. The bottom line is that cryptocurrencies are at the heart of loans that are used as collateral or as the primary source of borrowed value.
Numerous platforms that offer interest-bearing crypto accounts do so by advancing out your means and offering you a portion of the loan interest. The position of risk depends on who the platform lends your money to and what collateral they bear. Low-threat loans to large financial/fiscal institutions carry veritably different pitfalls than relaxed loans to people who may not be suitable to repay. But again, if you’re looking for a way to make your cryptocurrency work and earn extra money,lending it is one of the possible ways worth exploring.
- Traditional Buy and hodl
For those who are ready to take on the risks, the system of making money from cryptocurrencies is preferable. This means getting your crypto asset of choice from a cryptocurrency exchange and buying further of it when prices drop — traditionally known as “buying the dip”.
After many months or times, the asset may be sold if a substantial overall profit is made compared to the purchase price.
Well-established cryptocurrencies like Bitcoin, Ethereum, and Litecoin have their market ups and downs, but if we look at the maps, we see that these currencies have maintained an upward trend throughout the year.
- Liquidity pools and yield farming
Yield farming and adding liquidity to trading pairs on crypto exchanges are better suited to experienced investors. These are common options on decentralized exchanges, and essentially involve contributing your tokens to a trading pool. You’ll usually need an external crypto wallet to participate, and it’s important to pay attention to gas fees.
When you put a pair of tokens into a pool, it generates liquidity tokens that can be farmed to earn more rewards. Rewards are often paid in the platform’s utility token. You might find rewards of over 100% APY on certain crypto projects, especially new ones. That rate may sound tempting, but there are a lot of risks.
Risks of liquidity pools and yield farming
When you start to read about liquidity, the first risk you’ll learn about is impermanent loss. This stems from the way liquidity pools calculate the price of assets. It’s possible to reach a situation where the value of the tokens in the liquidity pool is different from the tokens outside the pool. If this happens, you might lose money when you trade your tokens.
Another significant risk is scams. Yield farms that promise sky-high returns may well turn out to be scams. In the recent Squid Game (SQUID) rug pull, the project’s developers drained over $3 million in funds from the liquidity pool, leaving investors with nothing.
Finally, be aware that DeFi tokens can devalue quickly. Let’s say you earn a 100% APY that gets paid in the platform’s utility token. If that platform is creating unlimited numbers of tokens to pay that high interest rate, the tokens you’ve earned may be losing value as fast as you earn them.
One of the easiest ways to earn interest on crypto because it carries less risk than other options and is relatively easy to do. If your crypto exchange offers staking, you can activate this option at the click of a button. You might need to commit to stake your coins for a set amount of time.
If you can’t stake coins with your crypto exchange, you might consider moving your assets to a wallet or platform that does offer this option. Staking can pay rewards of up to 15% APY or more, depending on various factors, such as the platform and the crypto. For example, I am earning around 10% APY on most of my stake-able assets.
Here’s how staking works and why you can’t stake every cryptocurrency.:
- Proof of stake (POS): Some cryptocurrencies use a proof-of-stake system to keep the network secure. Proof of stake is a popular and more sustainable model than the one Bitcoin uses — and you need a POS crypto for staking.
- Validating transactions: Validators earn rewards for checking that new transactions are legitimate. In the proof-of-stake model, validators need to own a certain amount of the currency to participate.
- Earning rewards: When you stake your coins, you’re usually contributing to a validator node, and you earn a percentage of the rewards from that validator.
There are risks involved in staking. If you choose to stake your assets from a centralized exchange rather than a crypto wallet, there might be an increased risk of hacking. Plus, some networks punish validators who break the rules, so in the unlikely situation that you choose an unscrupulous validator, this could impact you.
Airdrops are a great way to try out new altcoins, where fulfilling certain criteria entitles you to receive an airdrop. Airdrops are tied to various blockchain-based projects, where developers offer free tokens to the members of the crypto community to gain the public’s attention.
This is a marketing tactic, and you just need ownership of a specific wallet address to receive an airdrop. Some crypto exchanges also offer regular airdrops to their users.
Usually, airdrops are issued to users after completing a particular task. Some of these tasks include:
- Holding a specific smart contract wallet
- Signing up or creating an account for receiving regular updates
- Re-tweeting or sharing a post
- Receiving or sending crypto through a particular platform
The basic idea behind airdrops is to distribute newly minted coins or tokens to specific wallet addresses to keep the recipients engaged.
Generating passive income on your cryptocurrency assets can be a rewarding option. But as with many things in the cryptocurrency world, it is important to understand the risks before you jump in.
Disclaimer: The information posted in the article is for educational purposes only. By using this, you agree that the information does not constitute any investment or financial advice. Do conduct your own research and reach out to financial advisors before making any investment decisions.
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