3 Most Popular Ways to Grow Crypto Assets Passively in 2022
Make interest out of your idle crypto assets to add an extra income on top of your paychecks.
Bitcoin price is on a rollercoaster as it made its way up to $42,000 and then fell to $39,000 two days after. Also as the Fed may hike interest rates at any point, most cryptocurrency investors have entered a wait-and-see state. Buy or dump? Might as well HODL.
Whether you are a long-term HODLer or a short-term one, you surely want your idle funds to grow passively, like what happens when you deposit in a bank. Problem be, how to make passive income using cryptocurrencies instead of fiat? To answer this question, I’ve made the following cryptocurrency tips of three of the most popular ways to make passive income with your cryptos in 2022.
01. Cryptocurrency wealth management
Cryptocurrency wealth management is currently the most stable investment method among various blockchain investments. Consider it a cryptocurrency investment for dummies, since there is no need to Investors can earn fixed interest for their idle digital assets. Think of this as putting money in an interest-bearing bank account, and the only difference is that this service only supports cryptocurrency deposits.
Instead of holding cryptocurrencies in your hand and waiting for them to increase in values, you can deposit them into these accounts and earn daily, weekly, monthly, or yearly earnings based on predetermined interest rates. Platforms that provide cryptocurrency wealth management services include Binance, coinbase, FTX, LuckyHash, etc.
One thing to keep in mind is that interest rates vary from the types of tokens to service providers. Binance, Celsius, Matrixport’s USDT wealth management products’ APYs range from 6%-9.32%, while that of LuckyHash is as high as 60%.
Click m.luckyhash.com to browse other wealth management products whose APY can go up to 90%.
02. Crypto lending
Cryptocurrency lending has become one of the most popular cryptocurrency services in 2022. As an investor, you can lend your cryptos to and earn interest out of it. There are four ways to start:
P2P lending:
Platforms that offer this type of service usually allow users to create customized terms, decide the amount to lend and the interest to accrue on the loan. The platform matches lenders and borrowers, similar to how P2P trading platforms match buyers and sellers. This lending system provides users with a degree of control when it comes to cryptocurrency lending. Note that it’s mandatory to deposit your digital assets in the lending platform’s escrow wallet beforehand.
Centralized lending:
You are completely dependent on a third-party lending infrastructure, where the interest rate is fixed, as is the lock-in period. As with the former, you have to transfer your cryptocurrency to a lending platform in order to start earning interest.
Decentralized lending:
It allows you to perform lending services directly on a blockchain. Unlike the prior strategies, there are no intermediaries involved in DeFi lending. Instead, lenders and borrowers interact with programmable and self-executing contracts (also known as smart contracts) that autonomously and periodically set interest rates.
Margin Lending:
Finally, you can lend your crypto assets to traders who are interested in trading with borrowed funds. These traders use borrowed funds to enlarge their trading positions and repay the loans with interest. In this case, the cryptocurrency exchange does most of the work on your behalf. All you need to do is make your digital assets available.
03. Crypto cloud mining
We know that Bitcoin mining is essentially about competing to solve highly complex mathematical puzzles to prove their eligibility to become validators (more commonly known as miners). Due to the competitive nature of Bitcoin’s consensus mechanism, miners must invest in powerful mining equipment and pay pricey electricity bills.
Becoming an independent miner is a big investment — in order to generate enough hashrate, a decent investment in professional mining rigs is a must. Also, though there are tutorials on how to start mining as a beginner who knows nothing about programming, you’d still have to spend hours or days just to get your rigs up and running. And be aware that you are not going to recover all your money soon after starting.
So what can you do if you want to mine with a small amount of idle cryptos? Cloud mining can help you with it.
What is cloud mining?
Some companies put their hashrate on shelves, you can buy their hashrate and they will cover all the rest: technical issues, management, slot fee and etc. Some of them ask for daily maintenance fee, be sure to pay attention to that.
Cloud mining may sounds easy, but you need to spend some time DYOR because quite a few scam cases have emerged since cloud mining became prevalent.
The previously mentioned platform LuckyHash also provides cloud mining services. LuckyHash has a thorough long-term plan for the construction of distributed storage infrastructure. It has established IDC data centers in Seoul, Hong Kong, Bangkok, Malaysia, Singapore, Kazakhstan and other places. LuckyHash is in the leading position in mining resources, compliance and localized service quality.
If you are interested in cloud mining, feel free to register an account under my referral link and browse LuckyHash products. (An extra 5 dogecoins will be given to my referees)
In the trough of the market, using cryptos to earn cryptos is undoubtedly the safest and most effective investment method.
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