The market is going through a serious correction, but you can still make money with crypto – as long as you choose safe passive income tools. In this article, the Midas.Investments experts explain how to make a daily profit with crypto instruments like interest-yielding deposits, staking, and yield farming ⚡️⚡️⚡️
1. Earning Interest On Crypto Accounts
Of all the ways to make money investing in cryptocurrency, this is the easiest. All you need to do is deposit crypto on a trustful platform and let the platform’s portfolio managers allocate your funds towards the most secure and profitable instruments. You can relax and collect your regular reward payouts.
What are APY and APR?
In this article we’ll mention APY a lot, so it’s worth giving a definition first. APY stands for ‘annual percentage yield’ and means the total return on an investment over a period of one year with compound interest (i.e. if you don’t withdraw the interest but add it to the principal). You shouldn’t confuse APY with APR (annual percentage yield): the latter doesn’t take into account compound interest. The more frequently the interest accrues, the bigger the difference between the two. In general, the return rate you’ll see on crypto investment websites is the APY. Remember that if you withdraw the interest every time, you’ll end up earning less than the APY.
The three key assets: BTC, ETH, USDT
- BTC is the ultimate crypto investment vehicle; many believe its value will exceed $100k one day. One of the reasons is that it’s scarce: Bitcoin’s maximum supply is capped at 21M, and with time fewer and fewer BTC will be entering the market.
- ETH is the fuel for the world’s largest dApp ecosystem, and it should grow more valuable as Ehtereum evolves into the much more scalable Eth 2.0;
Platforms where you earn interest on crypto
Midas.Investments is one of the highest-yielding, stable, and diversified crypto investment platforms in the market. It serves over 15,000 investors worldwide and supports over 20 assets, including BTC, ETH, BNB, USDT, LTC, etc.
To achieve the best APY, Midas managers allocate investors’ funds towards a variety of instruments, from DeFi liquidity mining to masternodes and PoS staking. Midas’ proprietary risk management algorithms allow it to outperform the market and preserve investors’ wealth even during the sharpest corrections.
How much can you earn?
On Midas, the rewards are automatically reinvested to maximize the compound interest effect. Here are the current APY rates on the most popular products:
- Guaranteed returns: deposits in large cryptocurrencies like BTC (1.20% APY), ETH (0.87% APY), USDT (up to 7%), and BNB (up to 12.5%).
- High-yield: investments in DeFi instruments (advertised potential yields reach 60%) but with much higher risks. Note that in this case you are not investing in decentralized finance protocols directly but rather allow Binance to invest for you. For pure DeFi tools, see the Yield Farming section of this article.
Staking is possible in those networks that use the Proof-of-Stake (PoS) consensus algorithm. In PoS, users called validators earn rewards for confirming transactions (see Setting up a node). You can stake (delegate) your assets on an existing validator and receive a share of their earnings, usually on a daily basis.
Popular staking currencies and platforms
Ethereum 2.0 (ETH)
Some of the Eth 2.0 staking services. Source: Beaconcha.in
3. Initial cryptocurrency offerings: IEO and IDO
What is an IEO?
An IEO, or Initial Exchange Offering, is a token sale operated by a crypto exchange, rather than by the project itself. The exchange conducts due diligence and provides additional guarantees for investors, making IEOs safer than ICOs, which were plagued by scams.
To participate in an IEO, you need to register on the exchange that conducts it, complete the KYC (if required), and deposit crypto (usually ETH or USDT) to buy the tokens. An IEO can be held in several stages with different discounts relative to the eventual listing price.
After an IEO is finished, the token is listed on the exchange. Note that the price often collapses within days after listing as IEO investors rush to sell off the tokens purchased at a discount. This makes IEO a highly risky instrument: if you miss the short price pump right after the listing, you risk ending up in the red.
IDO: a decentralized alternative to an IEO
An IDO (Initial DEX Offering) is a token sale held on a decentralized launchpad, followed by a listing on a decentralized exchange like Uniswap or PancakeSwap. The most popular launchpads are Polkastarter, DuckStarter, DAO Maker, Balancer, BSCpad, Ignition, and Poolz.
To participate in an IDO, you need to get whitelisted and be ready to buy as soon as the sale opens: IDOs are usually oversubscribed and tokens get sold out within minutes. A DEX listing follows in a couple of hours. Just like with IEOs, the safest strategy is to sell right after the listing.
What is mining – and is it profitable?
Strictly speaking, mining is the process of confirming transactions and creating new blocks in Proof-of-Work chains like Bitcoin and Ethereum. Apart from transaction fees, miners earn block rewards for solving special cryptographic puzzles. The term is also used in many non-PoW networks as a synonym of minting or farming.
The profitability of mining depends on many factors, including the coin price, electricity costs, the type of equipment used, etc.
Examples of coins you can mine
BTC (ASIC mining)To mine Bitcoin, you’ll need special hardware called an ASIC. A single ASIC can cost between $400 and $20,000, and the average payback period is between 9 and 15 months even for regions with cheap electricity. This means that you’ll need to mine for almost a year before you earn any profit (you can use the CryptoCompare calculator to estimate the rewards).
Chia (HDD mining)Chia ‘mining’ (actually called farming) relies on the free storage space on users’ SSD and HDD drives, meaning that you don’t need to spend thousands on hardware and electricity to earn XCH. You will, however, need large high-end drives (at least 2TB each) that can sustain huge numbers of daily overwrites. Also, note that the profitability has gone down a lot in the past couple of months, so the payback period for a 2-3 TB drive is now around 10 months.
LTC (GPU mining)
Litecoin, Ethereum, Ethereum Classic, and many other coins can be mined using graphic cards (GPUs). The payback period is usually shorter than for ASICs; however, due to the popularity of GPU mining, second-hand graphic cards now cost two or three times more than they did when new. To avoid disappointment, make sure to calculate the expected mining income using a calculator like Crypto Compare before you invest in a GPU.
5. DeFi Yield Farming
What is DeFi?
DeFi, or decentralized finance, was the biggest crypto trend of 2020, and remains a solid way to earn money from cryptocurrency in 2021. DeFi instruments rely on smart contracts only and don’t require any centralized intermediaries, such as crypto exchanges. This is both good and bad: good, because virtually all of the profit goes to the users; bad, because smart contracts often contain vulnerabilities that can be exploited by hackers.
The main ways to earn with DeFi include lending, yield farming, and trading pools. We’ll focus on farming as the most profitable tool.
What is yield farming?
Popular yield aggregators and farming projectsThe APY of liquidity mining projects changes all the time, so to maximize the profit you’d need to keep shifting your crypto from one protocol to another. Doing it manually is difficult and costs a lot in gas fees, but there are aggregators that will do it for you.
Yield aggregators and farming on BSC
Why summer 2021 is a good time to invest in crypto
While crypto prices did fall sharply in the second half of May 2021, there is no reason to talk about a true bear market. The long-term trend continues to be bullish, and the next upward leg can turn out to be even more powerful than the previous one, which took BTC to an all-time high of $65k.
The correction down to $35k offers a rare opportunity to buy BTC, ETH, USDT, BNB and other cryptos cheaply and benefit fromt the rising yields. However, volatility will likely remain high in the coming months, meaning that asset holders should do their own research before investing in any tools.
CeFi or DeFi?
Until the market finds a new balance, independent investing in DeFi will remain highly risky due to the hyper volatile nature of many DeFi tokens and their relatively small trading volumes combined with the high blockchain fees. Less experienced investors might consider allocating a larger part of their portfolio towards managed products (CeFi – centralized finance) rather than smart contract-based protocols that don’t have any built-in risk mitigation tools.
Midas.Investments is a global crypto asset management platform offering an APY of up to 17% on Bitcoin, ether, and USDT deposits without a minimum entry threshold. For more information, visit the official investments page. Please note that none of the information in this article should be considered financial or investment advice.