Buying low and selling high usually is the way to make money within crypto. But did you know investors are making thousands of dollars every month passively as well with these few strategies?
In the latest video, Brian Jung, a famous crypto YouTube channel, has revealed the top 3 crypto passive income strategies.
Interest Bearing
The easiest way to earn passive income on your crypto is by utilizing interest-bearing accounts. In terms of the risk versus reward ratio, this has the lowest amount of risk but will yield the lowest amount of returns.
Similar to a traditional savings account, where you deposit money into a bank. And that bank lends out the money in order for you to earn interest. You can do the exact same thing with crypto but in this instance, the bank would be an exchange and you can find yourself making way more money than you could in a traditional savings account.
BlockFi offered rates of up to 9.5% on their website due to regulations. The interest yield earning program did get discontinued, but there are still a number of alternatives such as Gemini. You can even earn up to 8% APY on your crypto including stablecoins.
Exchanges such as Gemini are considered one of the safest exchanges where you can buy sell stores and earn interest on your crypto and that’s because they’re heavily regulated by the New York state department of financial services and offer industry-leading security on your account.
Gemini even has its own stablecoin called the Gemini dollar that is backed one-to-one undergoing serious accounting audits every month to ensure its reserve funds are always met just in case of any security issues.
Staking
The next passive income strategy on my list is going to be staking cryptocurrency. Staking has been growing rapidly in its popularity because of its ease of use and the ability to earn even more additional income on various amounts.
When it comes to staking your crypto oftentimes, you do have to lock it up for a predetermined period of time. Although the duration of how long you lock up the crypto is up to you. If you needed to cash it out immediately in between your lock-up period you would not be able to withdraw it until the lock-up period has been fully completed.
The idea behind staking is that it’s a democratic way to secure a crypto network and gives users incentives to keep their crypto locked up in order to earn staking rewards.
There are some additional good reasons why you may even want to consider staking your crypto, it’s because you’re directly contributing to the security of the network staking helps to give a long-term approach which generally pays off in crypto. And you don’t need any equipment and it’s also a great way to educate yourself on how the technicality of crypto works now the top coins that are currently offered to stake are going to be Solana (SOL), Cardano (ADA), Avalanche (AVAX), Terra (LUNA), Cosmos (ATOM), EOS (EOS), Binance Coin (BNB) and eventually Ethereum 2.0 (ETH).
The more you lock it up the higher interest, you’ll have and the less short-term lock-up period you go through, the smaller bit of interest you’ll earn.
Yield Farming
The third strategy we have is yield farming. So yield farming has the highest risk but it also has the highest upside in earning passive income if you know how to do it right.
Yield farming is the process of token holders maximizing rewards across various DeFi platforms. This dividend investing yield farm gives you high annual dividend payouts and the frequency can occur multiple times a day.
Essentially, yield farming is a process of trying to maximize the return of capital through leveraging various decentralized finance protocols individuals who partake in yield farming will attempt to seek out the highest yield or rates of return, which are the rates that revolve around various protocol strategies by moving the funds around between these different protocols or swap tokens for higher generating yield. These high yields range anywhere from 500% to even over 1 million percent APY.
Yield farming is a bit of a complicated process and exposes both borrowers and lenders to financial risk. This industry has also been known for rug pulls high volatility and even a lot more regulatory risk.
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