Passive Investing Platforms are competing for your money
More options to incentivize Crypto investment emerge
While the price movement in the general Crypto market remains sluggish, the innovative spirit & inclusiveness in the Cryptoverse continues to rise. The recently launched Bakkt physical bitcoin futures are beginning to take off after a rather sluggish start. The platform recorded a business of 224 contracts on Oct. 9 — a mammoth 796% jump from the previous day (chart below).
The premier digital coin BTC has been consolidating in the narrow $7800-$8800 range since the launch of the Bakkt platform. Some analysts had predicted that the timing of the recent fall of bitcoin was conspicuous due to it's overlapping the Bakkt launch. If price manipulation was in play, it remains to be seen if the recent spike in Bakkt’s futures trade volume is going to affect the BTC price in any way.
I recently wrote about the launch of two new trading products — first was the launch of Bitcoin Options by CME in Q1 2020 & the other one was a dApp that enabled the users to trade BTC binary options. While these products suit the active traders a little better, we have seen other options emerge for passive Crypto investors recently. Companies are incentivizing you to park your money on their platforms in return for profits.
Binance was the first to take lead here with the announcement of the Crypto Lending platform followed by a Staking platform. With the former, Binance users will be able to earn interest income & grow their digital portfolio by lending their holdings at the exchange for specified terms, whereas the latter will let the users make money by simply holding their digital balance on the platform, for which they will receive monthly rewards & distributions.
Other platforms have taken the cue from Binance and devised their own passive investment products. Coinbase has recently announced the USDC Rewards where eligible US customers will be able to earn 1.25% APY rewards on every USD Coin — one of the fastest-growing stable coins out there with the 24th largest digital currency by market cap, created by CENTRE, a Coinbase backed consortium. Although not much in the way of return, at least your parked digital money is growing, albeit slowly.
Digital asset financial services company launched its own staking platform. The users of the service can earn passive income while their digital assets lie in a secure & insured cold storage. The proposed staking platform would include support for digital coins like Dash and Algorand with support for additional coins planned later this year. The investors can generate a variable return depending on the coin.
A ‘neo-bank’ style platform by the name of Juno is being launched by the founders of the Nuo protocol — where you can lend & borrow cryptocurrency. Juno will be based on the Ethereum blockchain and is expected to go live sometime in early 2020. The flagship product will be the USDC stable coin where the holders can earn a 5.5% annual interest rate. Also, digital wallets will offer no-fee solutions with peer-to-peer payment options.