If you are looking for ways to create passive income from cryptocurrency, then this article is for you! As cryptocurrency has proliferated throughout the digital sphere, now more than ever, there are ways to monetise on your cryptocurrency holdings, earning passive income from your hard work and efforts. There are a few options available, and below we give you the top 3 ways to make a passive income on cryptocurrency.
1) HODL cryptocurrency
For those of you new to this, HODL is a term derived from the misspelling of “hold” that refers to buy-and-hold strategies in the context of cryptocurrencies. This might be the easiest and most obvious way to generate passive income with cryptocurrency. It’s also the most risky strategy, so rely on this only
IF you have an extremely high tolerance for risk.
IF you get lucky and 10x,100x or even 1000x on an alt.
IF you have strong hands, big balls and can handle 80–90% drops.
IF you believe we are in the early stages of a blockchain technology revolution.
In case you can say yes to all of the above, you simply just need to find the cryptocurrencies that pay dividends in the form of payoffs or appreciations. There are many cryptocurrencies that generate dividends but not all are worth buying and holding. In order for you to find the ones that fits your investment profile best, make sure to do your own research before you settle on the cryptocurrencies to HODL.
2) Earn interest on cryptocurrency
Now that you have cryptocurrency, perhaps it might interest you to lend those cryptocurrencies out to others and in return you get paid with interest. Some great options of earning interest from your cryptocurrency holdings are:
Celcius Network and Blockfi are a new kind of financial service. They offer loans backed by crypto as collateral and, what’s more interesting if you want to earn passive income, they pay interest if you have cryptocurrency to lend others. If you want to earn interest, you send them your coins. Celsius pays interest every week, Blockfi every month, both in the deposited currency.
But how do they earn the interest? They lend your crypto to margin or short traders and pass a part of the interest they earn that way to you. If you lend them stable coins, they will also lend these coins to other users who take a cash loans.
DeFi lending services
DeFi is the new crypto buzzword and stands for Decentralized Finance. More and more players like Compound and Dharma Lever or ETHlend come to the market and offer a decentralized way for lending your crypto and earning interest. These services offer a borrowing and lending market based on smart contracts running on Ethereum. The interest rate which is paid is determined by bid and ask.
If you want to earn interest, you send your crypto to their wallet, which issues a smart contract via their app interface making you a “lender on the blockchain”. On the other side there are borrowers which add collateral to the contract and are then allowed to borrow your crypto. Usually they do this for margin/short trading.
In the case of Compound, interest is paid after each Ethereum block (currently about 15 seconds) and is directly added to your funds using an internal tx, so no GAS is needed. Interest is paid in the same currency like the one you lent.
ETHlend is a peer to peer lending platform. You can lend out about 250 tokens. It uses Ethereum smart contracts to connect lenders and borrowers. Securing a loan within minutes using blockchain technology. You as the lender set your own terms so interest is dependent on your agreed upon terms.
Bot lending services
Lending bot services like Cryptolend or Coinlend are not really new, but still not that well-known. They offer automated lending to margin and short traders on exchanges like Bitfinex or Poloniex. You don’t need to have any technical knowledge to use the bots or know anything about lending to traders. You just send your crypto to the exchanges and the bot does the rest, generating an interest on your crypto deposits.
You need to create specific API keys on the exchanges which the bot uses then for lending. Sounds spooky in the first step, but as these keys are limited to lending only and don’t grant the right to exchange or withdraw, this seems to be a safe solution.
Both services offer a free plan, so you only have to pay the fees charged by the exchanges for earning interest by lending. Interest is paid in the same currency like the one you lent.
Exchange interest programs
If you want to earn interest with an exchange interest program, you send your coins to the exchange and add them manually to the interest programs. Interest is paid daily in the same currency like the deposited coins.
The way Bitrue generates this interest to the lender is by lending the coins to margin and short traders on their exchange, who ultimately end up paying the interest.
3) Trading bots for cryptocurrency
Instead of holding your crypto for a long period of time and sell them after the value has risen, you can get started with trading cryptocurrencies. Cryptocurrencies have been extremely volatile since the very beginning. They are arguably the only tradable assets whose value varies in double-digit percentages every single day. Cryptocurrency is available for trading 24/7 and never sleeps on exchanges all around the world. The price does not always go up either. Thus, timing the market is the key to becoming a successful cryptocurrency trader.
If you are someone who does not have the patience to HODL, then cryptocurrency trading provides you with the perfect opportunity to make some money. Many successful cryptocurrency traders do suggest you buy low and sell high. However, this is easier said than done. When trading cryptocurrency, you can trade manually or go with automatic crypto trading bots. While holding cryptocurrency for a longer duration has proven to be very rewarding, it takes a lot of time and patience for you to see the value of your investment grow.
At the moment, there are many crypto trading bots that have taken over the entire cryptocurrency trading ecosystem, and this is mainly due to the fact that they are often more efficient than humans, especially when it comes down to trading.
Now that you know that bots have taken over many crypto trading markets, you must have realised already that the odds of making money when stacked up against millions of bots are extremely slim.
You could master all the different technical analysis techniques and outdo the bots. However, not only is this tiresome but also very time-consuming. So instead of spending more time learning about technical analysis, you can set up the crypto trading bots on your own. Let’s go through some of the most profitable cryptocurrency trading bots out there, and help you be empowered with the knowledge of choosing your own trading bot in the future.
Cryptohopper a new bot in the crypto trading market. However, this newcomer has managed to turn heads due to the wide array of features that this bot provides. One of the downfalls of most trading bots is that they run on your local machine. This means that they run only when you have turned on your PC.
With the rise in interest for cloud-based technologies, Cryptohopper utilizes cloud technology to keep the bot running 24/7. By running the bot on a cloud, users will be able to place trade orders even during the night. Thus, no opportunity is missed
Another key reason that led to the rise in fame of Cryptohopper is its ease of usage, especially for the novice. The bot has integrated with an external trading signaller. This means that anyone can start using this bot by running it on autopilot. This is a boon to the new traders, who need not worry about setting trading signals for their bot. The bot also lets more experienced users mess around and set their own trading signals. Thus, satisfying the needs of both.
Apart from this, the bot is also equipped with features such as trailing stops, technical analysis, templates, and backtesting. Templates help you to configure a new setting for your bot quickly and technical analysis allows you to customise and configure your own settings.
It offers some plans, once you subscribe to any of the plans, you can start using the bot on popular exchanges like Binance, Huboi, Kucoin, Bittrex, Coinbase, Poloniex, Kraken, Cryptopia, and Bitfinex. If you are willing to spend the extra buck on a trading bot, then Cryptohopper is a great choice.
Gunbot is a popular trading bot with over 6000 active traders using its services on a daily basis. Compatible with several trading platforms including Binance and GDAX, it can be run on your local PC. This can run on Windows, Linus, and Mac platforms, so running on your local machine would not be a problem.
The bot has 32 different pre-configured trading strategies which give users a wide array of options to generate some passive income. Amongst these strategies, the three most popular ones are the Bollinger band, step gain, and ping pong. Many users have reported having made a lot of profits with the BB strategies.
Gunbot is not free to use and comes with a one-time flat rate ranging from 0.1BTC to 0.3BTC, depending on the features that you would like to see in the bot. Apart from this, the bot also comes in the form of a Lite version that has limited features but can be used to experiment around with the lesser amount of funds.
The post-purchase support provided by the company is truly amazing. Customers get their issues resolved in under a day. The only problem when it comes to this bot is that you should always keep an eye on the current market state. If the volatility of the crypto market is very high, then you should probably turn the bot off in order to avoid any loss.
Haasbot can be considered a veteran in the trading bot ecosystem. It was created way back in 2014 and is compatible with all popular exchanges such as Huboi, Bittrex, GDAX, etc. Designed by HaasOnline, it was initially designed to only analyze the market conditions. However, now you can completely automate your trades with the Haasbot.
The bot is available on a subscription basis, with prices ranging from 0.073BTC for 3 months to 0.127BTC for a year. Unlike other bots whose features are limited when it comes to the lower packages, Haasbot provides its users with the complete package for even the cheapest plan.
The bot is run on cloud and thus you will not miss out on any trading opportunity even when you are sleeping. Additionally, this also means that there is no need for you to keep your computer running at all times. The bot also allows you to customise it with your own trading strategy.
However, the pre-configured strategy is by itself pretty amazing to make some passive money. The only downside to this bot is it requires an input from the user to act upon. Thus, expecting you to have certain knowledge about the market conditions.
That aside, the easy to use interface, quality support and the array of features makes it a bot that is widely used by the trading community.
3Commas bot is very new to the trading bot scene, it has been able to provide its users considerable gains, even during the crypto bear market.
The unique feature that separates this bot from the other bots is its ability to trail any crypto market. This allows the bot to close the trade at the most profitable position even though the target gain set by the user had already been reached. This feature helps immensely during the crypto bull run.
Additionally, the bot also allows users to trade multiple cryptocurrencies at the same time. Thus, not missing out on any good trading opportunity that comes along the way.
The bot is set up on the cloud and is accessible through the website. This means that the bot runs 24/7. The bot can be configured with Binance and Bittrex right now and more reputable exchanges such as BitFinex, Poloniex, and KuCoin. The 3Commas does come with a price tag attached to it. If you want to give crypto bot trading a go, then you could use the 3Commas starter plan and later move to the more expensive plans.
Blockbasis – The best of three worlds on passive income
As you might know by now, Blockbasis allows users to do all of the above options to make passive income on cryptocurrency.
With Blockbasis you can HOLD your crypto safely and just wait for the cryptocurrency to appreciate.
Earn an interest on all their deposits
Blockbasis uses Bitshares and the corresponding DEX. When you deposit, what happens is that an IOU is issued to transfer and exchange with Blockbasis. And, the deposit is stored with a partner that specializes in generating a return on cryptocurrency deposits. Because of this setup, Blockbasis can offer a 2% interest rate on all deposits without a lock-in period or restrictions on any deposits.
Exchange at any point in time at no exchange fees
Using Blockbasis helps you to exchange your crypto anytime without any fee fast and simple. In addition, it is easy to send and receive cryptocurrency via just an email when using Blockbasis
We have gone over the 3 main ways to grow your crypto-wealth passively, and the good news is, all of these passive income methods are in their early stages. That means that there is likely a lot to gain by being an early adopter. However, it also means that we do not really know what will stick. All this is to say that before you go to town building your own mining pool, see what is a reasonable and feasible project for you.
Finally, your earnings are going to range proportionally based on what you are willing and able to invest, which methods and coins you choose, and your trading knowledge.
One of the major factors to successful passive income will be on how well you stay informed and keep your cool with the volatility of the crypto-market. This is a gold rush! Some will get rich, and some will find a few nuggets in the sand. But you can’t win if you don’t play!
Blockbasis is the most optimal platform for anyone who wants to enrich the passive income by HOLD, lending and exchanging safely, easily and fast. Sign up today to generate passive income on your cryptocurrency!