You don’t have to be a ﬁnancial guru to see the vast potential of the cryptocurrency market; there, I said it. So far, the crypto market income has surpassed a trillion dollars, thanks to recent price increases. Besides, the market is not showing any signs of slowing down anytime soon.
We expect cryptocurrency values to surge within the next few years. So, jumping into the rising crypto market and making your share of the wealth with it won’t be a wrong move right now.
You can earn cryptocurrencies in various ways. Yet, we’ve relieved you of the stress and compiled a list of the top ten legitimate ways to earn passive income using cryptocurrency in this post. So, keep reading.
Table of Contents
10 Sureﬁre Tips Generating Passive Income Using Cryptocurrency
1. Stake coins
Proof-of-Stake (PoS) is a consensus mechanism that compels clients to stake their money instead of contributing to the network computing power (as is the case in Proof-of-Work chains like Bitcoin). Staking gives holders cryptocurrency tokens in return for verifying transactions and securing the blockchain.
Staking cryptos is a great way to generate passive income. One can take between 10 to 20 percent interest each year on their assets by staking tokens. But, it does take some specialized skills to make good proﬁts.
Thus, staking PoS tokens (like hi Dollars) is a common approach to earning passive income on a blockchain platform. Lengthy “HODLers”(people who buy crypto to hold) are big fans of staking their cryptos. It boosts their trading portfolios’ expected gains. All you have to do is buy crypto, lock up your coins inside a staking pool and sit back to collect your rewards.
2. Yield Farming
Yield farming is depositing cryptocurrency in a trading and lending pool, then staking the protocol’s coins to earn extra coins.
If you’re yield farming on a decentralized exchange like PancakeSwap, you’ll need to stash two coins into a liquidity pool to get revenue from transaction fees. In addition, you have to stake a group coin, named LP token, that you can invest to receive yield farming proﬁts payable in the platform’s token – CAKE! You can then trade your earnings for ETH, BTC, or ﬁat currency.
3. Join airdrops
Many crypto projects engage in airdrops to promote their coins and gain traction within the crypto community. The project asks crypto investors to help perform a speciﬁc set of tasks (such as sharing posts, signing up to the platform, etc.), and in exchange, users receive the project’s tokens. That way, blockchain projects incentivize the use of their platform and coins. Once the project is launched and released into the market, those tokens can be traded for other coins or sold for cash on exchanges where they are listed.
4. Cloud Mining
Cloud mining is the leasing of bitcoin mining equipment from specialized mining facilities. It allows one to earn regular income without buying and maintaining the mining gear. Like Genesis Mining and HashNest, entities levy a daily service fee on their cloud drilling rights.
Cloud mining gives crypto investors a handy passive income possibility. However, it also carries a signiﬁcant degree of volatility. This is due to crypto rates and mining challenges.
5. Crypto Trading
Trading crypto CFDs is one technique to get passive income through trading. Cryptos are suitable for trading CFDs due to their variation and volatility. Crypto CFD trade allows you to speculate on both increasing and decreasing prices (Go long and short). This will enable traders to proﬁt regardless of how the economy is moving. Yet, ensure you have a solid trading technique. Besides, have a solid understanding of the fundamentals.
Alternatively, you can just buy the digital currencies in the hope they increase in value. Before you can start, you would need to create a cryptocurrency wallet to hold your funds.
6. Try dividend-earning tokens
Certain tokens provide investors with part of the income generated by the entity that made them. You will get a speciﬁc amount of the project’s proﬁts if you only hold the coin. The percentage of income you earn is dependent on the amount of your staked tokens.
7. Run a lightning network node
The Lightning Network is a second-tier system based on blockchain systems like Bitcoin. It is a web of billing systems not connected to the main blockchain. In other words, it is suitable for fast payments that don’t need submission to the core blockchain right away. You earn crypto by charging a small fee for allowing people to process transactions through your lightning channels.
8. Consider cryptocurrency lending
Crypto lending is like regular cash ﬁnancing in terms of its fundamentals. The lender receives interest from the debtor. It’s collateralized by higher virtual assets than what you are acquiring. Thus, you can deposit BTC and lend banknotes or cash. Several platforms offer crypto lending services, including exchanges and DeFi protocols. However, you should take key factors into consideration before selecting a crypto lending platform. Some of these include interest rate, cost, platform risks, minimum deposit, loan duration, and collateral amount.
9. Hold dividend-paying tokens
Holding dividend-paying assets is the most pleasing way to make passive income in the crypto space. Exchange-issued assets are the most common type of virtual currency that pays dividends.
You must keep them on the issuing platform or invest them using a private account to receive dividends on such assets. The more coins you own, the more passive income you will generate.
10. Earn crypto through referrals
Some cryptocurrency projects oﬀer sign-up or referral bonuses for bringing users to their services. hi, for instance, makes it very easy to participate in cryptocurrency. Unlike the traditional banking system that only wants to make money from you, hi has only one goal – to make money for you. Simply recommend your friends to join hi to get free hi Dollars. If they buy hi Dollars from the Web App or Mobile Apps, you’ll get a bonus of up to 10% of the value of their purchase.