Passive earnings on cryptocurrency: 3 main ways

    Buying and selling digital assets is far from the only way to make money on the crypto market. Experts explained how to diversify your portfolio and get more profit.
    Over the past month, bitcoin has risen in price by 1.5 times. The cost of the first cryptocurrency on the morning of August 23 exceeded $50,000 for the first time since mid-May. Investors who bought bitcoin at $30,000 per coin in May, June, and July have already been able to get almost 67% of the profit. But buying crypto is not the only way to earn income from digital assets.

Landing

    
    Landing is a way of passive income, which involves the temporary transfer of cryptocurrency at a percentage. A crypto investor lends either to exchanges (and they increase liquidity due to this) or to individuals. The transferred funds are blocked in the smart contract.

    For example, on the largest cryptocurrency exchange in terms of trading volumes, Binance, there are two types of landings:

    Perpetual contract. It has a low-interest rate, but funds from such a contract can be withdrawn or added at any time;

    Fixed contract. Usually set for a certain period (10, 15, 30 days, etc.). Has a higher interest rate. Funds from such a contract cannot be withdrawn until its expiration date.

    Binance users have the option to invest cryptocurrency in a perpetual contract using USDT stable coins. The interest rate on such a deposit will be 1.2% per annum. A higher interest rate is 3.3% per annum for the perpetual contract of the 1Inch token.

    Axie Infinity (AXS) token fixed contract offers 15% per annum. But the funds invested in the contract will not be available for 14 days. On the decentralized platform BlockFI, an unlimited landing is available in USDT stable coins at 9.3% per annum. Landing platform Celsius provides a fixed contract on Ethereum at 5.3%.

Staking

    Staking is a way of passive income, in which users store coins on the Proof of Stake (PoS) algorithm, ensuring the health of the blockchain. This gives holders the right to profit. This feature is only available to cryptocurrencies that run on PoS, such as EOS, Tezos, TRON, and Cosmos.
    The meaning of staking is to ensure all operations on the blockchain and support the operation of the network. For this, digital coin holders are rewarded. The more tokens a holder has, the more likely it is that he will become the creator of a new block.

    The use of staking depends on the investor's strategy.According to him, if the holder of an asset is willing to put up with the inability to sell it for a long time, then staking will become an additional source of income.

    “In medium-term and long-term strategies, you can receive additional funds for your open positions, which looks very interesting against the backdrop of the traditional financial market. Such a strategy turns the purchase of altcoins into an alternative to bonds, with their accumulated coupon income,” the analyst noted.

    Staking can bring from 3% to 15% per annum. The most promising for staking are tokens that have a medium-term upward trend in the exchange rate, otherwise, the additional emission of coins will not even help to cover the exchange rate difference. Therefore, first of all, you need to pay attention, not to the percentage of staking, but the stability of the growth trend in the value of the token, he added.

    The most interesting tokens for staking could be: EOS (EOS), Stellar (XLM), Cardano (ADA), TRON (TRX), and Tezos (XTZ).

    “Staking can be called a full-fledged alternative to bank deposits or bonds. This is a conservative tool that, in some strategies, allows you to reduce risks,” the analyst emphasized.

    According to him, the risk depends on the choice of asset class and the type of blocking of funds. For example, staking fixed-locked volatile altcoins for the long term will have maximum risk, while staking flexible-locked stable coins will have minimal risk.

    EOS staking is available on Binance for 30, 60, and 90 days. Staking yields are 4.2%, 4.6%, and 6.1% respectively. Crypto exchange Huobi Global offers TRON (TRX) staking at 7% per annum. Staking Cosmos (ATOM) is available on Coinbase with an interest rate of 5% per annum.

Crypto funds

    If an investor does not have experience with crypto assets but wants to start earning money on them, then the best solution would be to use cryptocurrency funds. According to her, when working with the fund, the key risks are discussed in advance and the investor can be calmer about his funds than if he buys cryptocurrency on his own.

    “An interesting fact is that if a novice client says that he is ready to take the maximum risk and wants super profits, he is always offered a low-risk or medium-risk strategy since such clients usually do not realize the full danger of high risks.”

    The most promising cryptocurrency funds are Pantera Capital, Bitcoin Investments Trust, and Blockchain Capital, but they are more focused on large investors. For retail investors, there are also funds with a good reputation, the expert added.

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