6 of my Crypto Passive Income Strategies for 2022
Cryptocurrency is here to stay, but is it too late to get in the game?
We’ve all heard the tales of those HODLers who jumped into crypto early and stayed the course. Many early investors managed to rake in hundreds of thousands, or even millions of dollars for small investments. But at the outset, crypto was very uncertain and understood by few. Most investors either missed the boat or invested little into this opportunity.
Even if you missed out on the early rise, it’s not too late to make money on crypto. Today, we’re taking a look at investments and strategies that even newcomers to this tech can use to earn passive income with cryptocurrency in 2022.
Hello there, I know you want to learn about cryptocurrencies, blockchain, and cryptocurrency mining, but you don’t have the time or money to take classes on all of these topics, which I understand is difficult.
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Mining
Mining cryptocurrency is the original way to make passive income with Bitcoin and other cryptocurrencies. Mining involves using computing power to solve complex mathematical problems and verify transactions, requiring the cryptographic expert to share back “proof of work” demonstrating the solution. In exchange for this “work,” the fastest “miner” to solve the puzzle is rewarded with crypto coins or tokens. At scale, this distributed power means that no one entity holds 51% (or less in certain cases) of the network’s capacity, which could bring with it the ability to modify transactions and disrupt or attack its smooth function.
Staking Tokens
Mining Bitcoins requires expensive equipment and electricity costs that make it unsustainable even for many larger mining groups. As a result, proof of stake has become a popular alternative for confirming transactions and generating cryptocurrency. Staking is another way to generate passive income via cryptocurrency.
For people who hold cryptocurrencies which operate on proof-of-stake, they hold the option of staking their coins. When individuals stake their coins, they are essentially lending their coins to the network to validate transactions. In exchange for lending your coins and helping validate, the network rewards you with additional coins — effectively allowing you to earn interest. Similar to lending cash, coins that are staked are deposited into a special pool and thus available for everyday spending.
Hello there, I know you want to learn about cryptocurrencies, blockchain, and cryptocurrency mining, but you don’t have the time or money to take classes on all of these topics, which I understand is difficult.
But what if I told you that there is a free course that will teach you all of these things in 45 minutes and for free? Yes, it is correct. So, what exactly are you waiting for? Don’t miss out on your chance to learn, and get started right away.
Get started right now and take advantage of the free course by clicking here
Lending Cryptocurrency
The basic principles of lending crypto are the same as traditional cash loans — the borrower pays interest to the lender. In this case, the loan is secured by crypto assets in an amount higher than what is being borrowed. For example, you deposit your bitcoin and can borrow fiat currency (currencies issued by countries like a US Dollar, as opposed to cryptocurrencies backed by decentralized networks). Certain platforms like BlockFi act as marketplaces, where they pay a fixed interest rate to crypto depositors, like a high-yield savings account, then turn around and lend those assets out to borrowers who can make even higher returns.
The borrower provides crypto as collateral, ensuring the investor is compensated if there is a problem. In exchange, they are lent fiat.
Investments
Buying cryptocurrency is a great alternative investment in that it provides a hedge and a complement to the mainstream financial system and the value of USD. Finding the right time and cryptos to buy is important for growing a portfolio. This market can be extremely volatile. Sudden drops can allow anyone to get in at a decent rate, and sharp rises can mean big payoffs at any time.
However, because of this volatility, and the inherent regulatory risks in what is essentially a parallel financial system out of the control of governments and regulators, it’s best to only invest assets that you may be comfortable treating as illiquid for a long time. For example, an allocation of 1–5% of total invested dollars, depending on your time horizon and risk tolerance, may suit you in your early crypto explorations. The value of cryptos has been continually increasing since its inception, and there is a lot more potential upside as investors join in, but occasional drops can mean big losses if you are forced to sell. So long as you’re able to wait these out, you stand to make big gains.
Special Events
Of course, buying high and selling low is hardly advice the savvy investor needs to be told. If you really want to maximize your crypto investments, consider some of the following events and opportunities.
- Airdrops: Where small amounts of a new currency are sent to current cryptocurrency investors, either for free or in exchange for good publicity or positive mentions on social media. Republic tends to bring these to market regularly.
- Forks: A situation where a regulatory body forces an update to the software running a cryptocurrency, resulting in a new currency.
- Burns: When a company sends some of their cryptocurrency into an unusable wallet or account, rendering it obsolete and consequently increasing its scarcity and value.
- Buybacks: Where a company buys back its own crypto assets, limiting the supply and increasing its overall value.
- Rewards: Earn crypto in the course of doing your other business, like shopping. Lolli lets you earn Bitcoin as you shop at top merchants.
Dividends
Dividends are a classic way to earn passive income on investments. Not all types of cryptocurrencies pay dividends, so it’s important to do your research. Some popular dividend-paying cryptos include Tezos, Cosmos, VeChain, and NEO, which are all available through Coinbase.
The downside of dividends is that they have small payouts in comparison to many of the other passive income opportunities we’ve mentioned. The benefit is that they are fairly steady and, unlike airdrops, they do not dilute the overall value of the coin.
While dividend-paying cryptos are worth incorporating into your cryptocurrency portfolio, it’s still smart to apply multiple passive income streams.
Hello there, I know you want to learn about cryptocurrencies, blockchain, and cryptocurrency mining, but you don’t have the time or money to take classes on all of these topics, which I understand is difficult.
But what if I told you that there is a free course that will teach you all of these things in 45 minutes and for free? Yes, it is correct. So, what exactly are you waiting for? Don’t miss out on your chance to learn, and get started right away.
Get started right now and take advantage of the free course by clicking here
