How business people use their cryptocurrency savings to make passive income

Cryptocurrencies are taking over the world, and many business people saw an opportunity to achieve additional profit by buying cryptos such as Bitcoin, Ethereum, Litecoin, and more.

However, it turns out that buying and holding your wealth in crypto won’t do the trick — it’s too risky. The value of cryptocurrencies might be skyrocketing at the moment, but there’s no guarantee it will continue to do so in the future. That’s why plenty of crypto owners actively seek opportunities to invest their cryptocurrency savings somehow and take profits in the process.

cryptocurrency savingsLet’s explore some of the most popular options that they have at the moment.

Staking cryptos

Ethereum has been transitioning from proof of work to proof of stake consensus mechanism, which means it will not use miners anymore. Instead, ETH owners will be able to stake their Ethereum to support the blockchain network and earn income from the fees charged for ETH transactions.

Ethereum is not the only platform where this type of “investing” is available. Many other options use the PoS mechanism and allow staking cryptocurrencies.

Moreover, some online cryptocurrency exchanges also allow their users to stake certain crypto pairs and create liquidity for traders. They also earn money by taking a cut from the fees that the exchange charges its users.

Lending cryptos

Lending is also a legit way to earn passive income. You can use one of the dedicated platforms to lend your funds and earn income from the interest rate that the borrower has to pay after a while. Some sites even allow you to deposit your crypto funds and let others borrow fiat money instead.

This type of passive income is attractive because it offers you a chance to avoid the volatility that comes with investing your savings in the cryptocurrency market. Moreover, the interest rates are relatively high, and some platforms offer up to 8% interest on BTC deposits.

Investing in various projects

Cryptocurrencies opened a wide array of opportunities for investors. More importantly, they allowed everyone to invest a small amount of money in specific projects, thanks to the convenient nature of digital currencies and the power behind distributed technologies.

A couple of years ago, people were all about ICOs (Initial Coin Offerings), where a project would offer investors to buy tokens that are part of its ecosystem and support it. It was an original way to crowdfund startups, except that most ICOs turned out to be either scams or unsuccessful.

Nowadays, there are still many ICOs, but they aren’t as popular as they used to be. Still, it’s up to you to separate the wheat from the chaff and find the ones that are trustworthy and worth investing in. Make sure to find industries that are closely related to cryptocurrencies and can create real value when combined with them.

For instance, iGaming is one of the most prosperous industries attracting many investors around the globe. However, before you check out the available investment opportunities, make sure to read more about the legality of Bitcoin casinos and get acquainted with the matter.

Mining

Mining is now considered a more traditional method compared to the ones we listed above. To mine Bitcoin (or other cryptocurrencies), you need to invest in equipment. There are several things you should check out before making such a move, as the prices of graphic cards and other equipment tend to go up if there are many miners. Moreover, you should check out your electricity costs and whether it pays off to mine BTC in the end.

Hodling or trading

Finally, you can opt to buy and hodl (a term that originated as a misspelling of the word “hold” and caught on in the crypto world), hoping that the price of cryptocurrencies will increase in the future so that you can make a profit. Alternatively, you can engage in crypto trading on one of the available platforms and create income by buying and selling cryptos at the right time.

Even though hodling could be considered passive income, it’s difficult to claim the same for trading, as crypto traders need to put in a lot of energy and time to make it work. That’s why some people become full-time cryptocurrency traders.

Final thoughts

Cryptocurrencies are here to stay, and if you want to make the most of them, you should consider some of the passive income options suggested in this article. Carefully examine each possibility of investing your cryptocurrency and research them further before investing your savings to avoid the pitfalls along the way.