Initially seen as a fad for those with an interest in innovative tech, it’s safe to say that cryptocurrency has come to be a legitimate form of investment over the past couple of years.
And although it’s often touted as a particularly good option for long-term investment – as this allows you to ride out fluctuations in the market – it can absolutely be a way to earn a passive income as well.
A passive income is the holy grail for many: it means having money coming in on an ongoing basis without having to expend too much effort. Here are a few options to get you started.
‘Staking’ is quite a new addition to the world of cryptocurrency, but it’s already becoming very popular. It essentially just means earning rewards for holding your coins in a particular digital wallet. Currency exchanges such as Binance will offer staking opportunities, paying bonuses if their users hold coins on their platform, because it helps them to secure their network and ensure that the blockchain is functioning properly. Certain currencies also offer staking opportunities.
It’s a great best-of-both-worlds opportunity, since you get to earn a regular staking bonus, and can still ultimately sell your crypto for a profit further down the line. Locking your coins in can also encourage you to hold, making it easier to ride out dips in the market.
Mining cryptocurrency is lucrative, but it also requires a lot of specialist kit (and therefore a lot of cash upfront). For those of us who don’t own powerful computers and mining hardware, it’s still possible to get in on the action – by renting hardware that lives in specialist crypto mining farms.
This is what’s known as cloud mining, and it can be a great way to bring in passive income, if you time it right and get lucky. The important thing to realise is that, typically, you won’t start reaping rewards from your cloud mining contract until after 12 months. At this point, you’re only going to make money if the coin that you’re mining has held its value.
Lend crypto to businesses or traders that are in need of funds, earn interest in return. It’s as simple as that, which means peer-to-peer lending through platforms like BTCPop is a really good option if you already have a stack of cryptocurrency and you want to put it to work.
The risk here is the same as with any loan: there’s always a chance that your borrower will default on their payments if they’re not able to keep up. So make sure you cherry pick lending opportunities and lend to those with a good reputation.
Crypto traders make their money by making trades every day, looking for opportunities to benefit from the small daily market fluctuations by buying low and selling high. This requires a little input from you, however software such as bitcoin trader can be used to streamline the process, giving you a nudge so that you know when to trade, or even automating the process. Head over to the bitcoin trader login portal to find out more and get started.