Many people are afraid of making money with cryptocurrencies because of untrustworthy investments such as the trend for NFTs, news about “hype” altcoins, or the risk of high-frequency trading. On the other hand, a cryptocurrency can be securely stored and generate a profit. Safer DeFi tools, which are unjustly underutilized, are ideal for this.
Earn the Highest Interest On Crypto
Crypto exchanges strive to have as many users as possible deposit funds with them. This allows exchanges to increase liquidity and use cryptocurrency for other purposes.
A savings account is the best way to earn high interest on cryptocurrency. This method is suitable for beginners because you don’t need to understand stock exchange quotes or know complex terms.
High Interest Crypto Savings Account
It functions similarly to a bank deposit in that an investor “rents out” a portion of his savings to an exchange or platform in order to return it later with interest. The percentage is determined by the exchange’s terms or the digital currency in which the investor deposits his assets.
The interest is charged because the bank uses the users’ digital assets to conduct other transactions, cryptocurrency loans, and blockchain operations.
Smart contracts, in general, include a guarantee of return on demand. For example, you can deposit $1,000 and receive up to 15% per year in USDT, or approximately $150.
A savings account has two types of contracts: flexible and locked. Flexible has a low-interest rate and allows you to withdraw money whenever possible. Locked has a higher interest rate because it’s set for a specific period (several days or months). There will be no way to withdraw funds before the expiration date.
You can use a calculator to determine which option will earn you the most money: several short-term placements or one long-term placement.
Pros: You can begin with a small investment and see how it goes. There is no requirement for equipment or investor qualifications. If you choose a trustworthy platform for placement, the risk of losing money is minimal.
Cons: The risk of joining a fraudulent platform remains. You won’t be able to earn a lot of money all at once. Offers with a high-interest rate are quickly weeded out.
Earn Crypto Passive Income
Of course, a savings account is not the only way to generate passive income, but it’s the most straightforward. How can you increase your income even more?
- Staking. This concept refers to a contribution to a digital project in order to keep its cryptocurrency network running. To participate in staking, the user transfers the savings to the wallet or exchange account, where they are frozen. The percentage is given to the person with the largest staking wallet. Learn more about staking crypto in our article.
- Yield farming. The user invests his digital savings in the exchange, distributing them as interest-bearing loans to other users. The owner of the coins is charged a percentage for this service. Investors are constantly moving funds between platforms in order to increase their income. They do it on their own, using specific strategies in order to profit from the difference in coin values.
Passive ways to make money with cryptocurrency can boost investment profitability or at least partially compensate for losses in a force majeure situation. However, if you want to increase your profits while also being willing to take on more risks, it makes sense to try your hand at crypto trading. Experienced traders earn more than 20% per month, and in some cases, per day.