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If you are looking to dive into the world of cryptocurrency as an investor and earn a living by making passive income through this valuable investment tool, we have got you covered in this article. We will talk about some of the most valuable income generation tricks and tools which will help you earn considerable passive income through cryptocurrency investments.
Cryptocurrency has become one of the major asset classes despite being a completely digital asset. Due to its decentralized nature, cryptocurrency has also changed the basic definition of value and money by removing third parties such as banks from transactions. However, the cryptocurrency did not enjoy this much trust from investors from the first day of its introduction.
For many years, the crypto industry remained under the shadows of uncertainty as investors are always cautious about trusting new types of assets. But with the passage of time, cryptocurrency has earned the trust of banks, governments and individuals around the globe. This has become possible only because of the potential of cryptocurrency is changing the financial landscape around the globe.
Although there are many other uses of cryptocurrency as well, people are mainly focusing on its financial aspect, and investors are always looking for ways to invest their money and earn passive income from this industry. But not every method is good enough to help you earn a decent passive income by investing in this market.
In this article, we will talk about some of the most trusted methods of investing in cryptocurrency, which will help you earn passive income through this medium.
Importance of Crypto Passive Income
If you let your crypto sit idle in one place, it won’t prove to be any good for you. Inflation and other factors force people to convert their money into something else that’s good at hedging inflation. Therefore, investing your crypto assets in something useful in order to earn passive income is also important.
Many people use stocks as their preferred investment option, but they come with lots of risks attached to them, and you need lots of knowledge in order to earn enough money to call it a living in the case of stocks. Real estate is another good option, but you’ll have to manage all the properties, and spend money on them from time to time, which isn’t desirable.
While cryptocurrency isn’t designed to heavily reward its idle investors, features like liquidity and others pave the way for passive income. Decentralized finance is one of the best things to happen to the cryptocurrency landscape in recent times. DeFi encourages passive income for every crypto investor. Therefore, you should take advantage of this lucrative market as well.
Earning Passive Income with Cryptocurrency
Many people holding cryptocurrency around the globe have finally found valuable and trustable methods of earning continuous passive income from their crypto holdings. However, by their very nature, cryptocurrency keeps fluctuating in value, and this presents a huge risk for any investor. You’ll also have to manage your crypto assets and shares of different coins in your portfolio according to the market in order to keep your account profitable in the long run.
By inspecting the nature of cryptocurrency, it is evident that earning passive income with this digital asset class is way more difficult as compared to other assets like real estate. The continuous risk of losing your crypto’s value is one of the most concerning factors. This field might also be too technical for a person who doesn’t know even a tiny bit about computers and blockchain. However, most of the passive income generation methods in the field of crypto are made to mitigate the risks attached to the conventional market and to maximize the continuity of passive income in the long run.
Whenever you plan to invest in crypto and earn some passive income, do it after making a good strategy, and always diversify your portfolio. With the help of a good passive income generation method, you can easily start generating passive income with your crypto investment. One of the easiest methods in this regard is “HODLing”, in which you basically buy and store a cryptocurrency unless its market value increases substantially. You basically make money by buying a cryptocurrency for less money and selling it high to make a profit.
Holding cryptocurrency for a long time and waiting for its value to increase is included in the long-term strategy. You might have to hold onto your crypto for anywhere between a few months to several years. So, we can’t qualify to hold as a way of making passive income.
Ways to Earn Crypto Passive Income
Just as financial instruments like stocks can make you passive income, cryptocurrency can do the same. While everyone knows about holding, trading and a few other methods, people want to know about more passive income-generating ideas that can be applied to crypto holding and trading in order to earn passive income.
Moreover, passive income means that you should not have to actively get involved in the trading process. The good news is that there are lots of methods which will allow you to earn passive income easily without getting involved with your cryptocurrency.
We have hand-picked a few of the most trusted passive income generation ideas which can be applied to the field of cryptocurrency.
Provide Liquidity on Exchanges
Providing liquidity on different cryptocurrency exchanges can also provide you with an easy way of generating passive income. This process is also called yield farming. Many decentralized cryptocurrency exchanges around the globe require a certain amount of cryptocurrency to ensure liquidity on their platform. You can become the liquidity provider for those exchanges and earn a specific amount of cryptocurrency in return as your profit or passive income.
In this method, you do not even have to manage your cryptocurrency and do any transactions by yourself. You can team up with other investors and use smart contracts to land your cryptocurrency to decentralized exchanges around the globe and earn passive income. This passive income comes from a share of the trading fees charged by the exchange.
Yield farming is one of the most reliable methods of earning passive income on your crypto investment. However, in order to lend your money, you will have to look for a trustable decentralized exchange. You can also diversify your portfolio and invest in a few different cryptocurrencies before starting yield farming.
After you start the process, you will be provided with the liquidity provider token from that exchange which will serve as proof that you have shares in the liquidity pool of that exchange. If you want to, you can stake your liquidity provider tokens on other exchanges to earn even more money. So, yield farming can help you earn passive income in two different ways at the same time.
Earn Dividends
By investing in different companies, you can earn tokens and earn a specific share of the company’s revenue with the help of those tokens. The revenue you earn depends on the number of tokens you possess.
You can do the same with crypto dividend tokens by investing in platforms which allow it. This will help increase your crypto assets, and you’ll be earning passive income this way.
Remote/ Cloud Mining
One of the most tried and tested methods to earn cryptocurrency as a reward is through traditional mining. However, this type of passive income tool requires you to invest a lot of money. You have to buy a mining rig and lots of other tools in order to start your own mining apparatus. This consumes a lot of electricity as well, and mining might be banned in your country for this very reason.
This is where cloud mining comes in. In this type of mining, instead of wasting your money on buying computers and mining apparatus, you basically rent running mining systems and pay them to rent for their services. Whatever comes out from mining is redirected to your digital wallet.
However, since cloud mining is totally anonymous and remote, it is not under your control, and the chances of you getting scammed are very high. Once someone runs away with your investment and cryptocurrency, there is almost no way of recovering your money. So, cloud mining is a great alternative to traditional mining; it is not recommended.
Lend Your Cryptocurrency
One of the most highly recommended methods to earn passive income through cryptocurrency is by lending it. Whether centralized or decentralized, most of the systems around the globe use cryptocurrency lending to provide passive income to their investors. There are a few different strategies through which you can lend your cryptocurrency to others and earn interest against it as passive income.
Let’s discuss some of the most successful crypto lending models.
Lending your cryptocurrency to centralized platforms is a great step you can take towards becoming financially stable by earning passive income. However, in this method, you will have to lock away your cryptocurrency for a specific period of time which you cannot change later on.
The second method is lending your cryptocurrency to traders who want to trade by borrowing your crypto. Your cryptocurrency is used by big traders to expand their position in the market, and they return your cryptocurrency later on with a specific interest attached to it. This method is also called margin trading, and you can try it by signing up with any of the popular cryptocurrency exchanges around the globe.
One of the most popular methods to lend your cryptocurrency is peer-to-peer lending. This type of investment enables you to set your own terms when giving away your cryptocurrency to someone as a loan. You can accurately control the amount of cryptocurrency you want to give away and the interest percentage without any interference. For this, you will have to sign up with a P2P lending platform which will then match you with the right borrower. Depending on the platform you sign up with, you can explore different features of their system first and give away loans on your own terms.
You can also give away your cryptocurrency as a loan through smart contracts in decentralized finance. Since the whole process is decentralized, no third party is present between you and the borrower. Once a smart contract is written, it won’t need any type of interference from your end, and you will be earning passive income through an automated system.
Crypto Savings Accounts
If you want to earn interest on your crypto assets by setting them idle in the long run, you can try interest-based crypto accounts. These accounts are able to provide you with continuous passive income for a long period of time. To make things simple, you can compare these accounts with traditional savings accounts in the banks.
To open an interest-based crypto account, you will first have to find a platform which offers such services. You can choose the duration after which you want to receive your passive income. It can be as soon as a day or as late as several years. If you do the due diligence, you will find lots of platforms which offer such services.
Proof of Stake
Proof of stake is another great way of earning passively with your crypto investment. Blockchain uses proof of stake to achieve consensus in every transaction. This feature can be used by every cryptocurrency investor in order to earn passive income with cryptocurrency. Proof of stake provides every crypto investor with governance privileges. This way, the whole community governs the whole system, and the concept of a central authority controlling everything is eradicated.
However, proof of stake changes depending on the type of blockchain you are on. Moreover, you will be required to stake a specific sum of the native cryptocurrency of that blockchain in order to participate in the process. This system eradicates most of the complications related to earning money with cryptocurrency, and you can keep earning passive income for a long period of time.
Affiliates and Airdrops
Since cryptocurrency is still a relatively new field, many startups are looking to attract investors and make themselves known in the market. These startups reward their early investors and also reward all those participants who make others sign up on their platform. You can use this system to earn lots of passive income in the long run. Although this system does not require lots of capital to start, you will have to do lots of research in order to find money-making projects ahead of everyone else.
Many companies are focusing on creating cryptocurrency-related services and products. So, in order to attract new customers, they introduce affiliate programs. You do the research and bring customers for them, and they will give you a good passive income source.
Moreover, you can get rewarded for free in the form of AirDrops. AirDrops happen when new coins are introduced on the blockchain. As the value of the newly introduced coin increases, you make more money with the free coins AirDropped to you at the beginning.
Although Airdrops and affiliate programs can act as a great source of passive income, they might not reward you immediately. While you get cryptocurrency for free, it might take a lot of time for this free cryptocurrency to become valuable enough. Companies give away free coins just to increase the market of their product. So, your success in crypto affiliate programs and airdrops highly depends on the success of the program you are attached to.
In order to become eligible for airdrops, you will have to interact with newly introduced platforms and exchanges. These exchanges and platforms give away their cryptocurrency for free to introduce their products in the market. This is just like receiving a free sample of a product from a newly introduced company.
However, you should learn to do research and find opportunities like these more often. That is because some of the biggest cryptocurrencies these days were ones worth nothing more than a few pennies. So, once you get free rewards, hold onto them for long enough and trust the process to earn passive income in the long run.
You can also earn some money with cryptocurrency forks. A cryptocurrency fork is when an existing coin is introduced on a new blockchain. For example, every person who had bitcoins in 2017 received the same amount of Bitcoin Bash in their wallets. These forks are designed to encourage and reward the already exhausting investors. If the new prong of a cryptocurrency becomes successful, you’ll be making free money.
Conclusion
Decentralized finance has paved the way for idle crypto investments and easy income through passive income in the field of cryptocurrency. Therefore, you should also take advantage of this opportunity to earn passive income with minimum involvement with your assets.
In order to earn a decent side income, you can choose any of the several passive income streams like crypto lending, staking, cloud mining, crypto savings, and others.
Crypto Comeback Pro is a crypto trading tool for investing in the crypto market with an %88 average win rate on trades and is the #1 trading software for crypto traders from all around the globe in 2022. Try it For FREE Today. (Ad)
