A Finance Gem for instilling healthy, financially literate wealthy minds
Didn’t Bitcoin just seem like a fad a few years ago? Like it felt like a passing phase where it was hyped for a while and then it would just die down.
Turns out, people have been able to make A FORTUNE out of it. Lives have turned around because of this pinnacle of an investment. Not just Bitcoin, there are several other coins that have offered umpteen returns as well.
Just in case you were feeling lost and wanted a piece of the cryptocurrency cake, make a little side income, this one is for you!
- Lending out Cryptocurrency
To begin lending Bitcoin, you must first create an account with a lending platform such as BlockFi, Gemini, or Celsius. BlockFi functions as a marketplace, paying crypto depositors a fixed interest rate similar to a high-yield savings account, then lending those assets to borrowers who can earn even larger returns.
Crypto lending is appealing because it provides passive income while avoiding the volatility of the cryptocurrency market and paying a high-interest rate.
You can utilize a Defi (decentralized finance) application such as Compound or Aave, which is linked to a crypto wallet such as Coinbase. These programs allow you to compare interest rates, choose the best one (some offer rates as high as 8% APR, but rates vary greatly), and invest your money. Then sit back and watch the passive revenue pile up in your bank account.
- Investing and Holding (or HOLDING in the crypto world)
Purchasing Bitcoin or Ethereum is a wonderful alternative investment since it acts as a hedge and complement to the traditional financial system and the value of the US dollar. When it comes to building a portfolio, knowing when to buy and which cryptos to buy is crucial.
This market has the potential to be exceedingly turbulent. Sharp climbs can bring significant payoffs at any time, and sudden decreases might allow anyone to buy in at a reasonable price.
Bitcoin prices, for instance, fell by 26% in early January 2021. The two-day decline was substantial. This decline, however, is merely a blip on the radar for long-term crypto investors and HODLers, who are expecting a 300% increase over the next year. Imagine the profit you would have made by the end of 2021 with the amount of unprecedented growth.
- Cryptocurrency Airdrops
No, we aren’t referring to Apple’s Bluetooth service, this is a technique by which cryptocurrency can be sent from wallet to wallet via airdrop.
It’s when current cryptocurrency investors are issued modest quantities of a new currency, either for free or in exchange for good publicity or positive social media mentions. Once these crypto startups take off, so does the value of the coin.
Essentially, you didn’t invest anything, and your income is just growing.
Cryptos pay dividends too.
Dividends are a well-known method of generating passive income from investments. Because not all cryptocurrencies offer dividends, it’s crucial to do your homework before investing. Tezos, Cosmos, VeChain, and NEO are some of the most popular dividend-paying cryptos, and they’re all available on Coinbase.
Dividends have a disadvantage in that their distributions are minimal in comparison to many of the other passive income options we’ve discussed. The advantage is that they are pretty consistent, and unlike airdrops, they do not dilute the coin’s total worth.
And these aren’t just the only ways to make yourself some passive income, there are other ways too! Cryptocurrency is just at the beginning of its time. There’s so much to explore and learn in this new realm of buying and selling.