Make Money in Cryptocurrency: 5 Ways to Earn Passive Crypto Income

Image by Behnam Norouzi on Unsplash.

Earning passive crypto income is a dream for so many people. Given their decentralized nature and the big promise of high yields, cryptocurrency offers an exciting opportunity to make money with little effort.

However, if you're a newer investor, it might seem pretty scary diving into a market right now. But don't worry, we have the tips to help you earn a stable passive income in crypto.

What is Bitcoin Passive Income?

Bitcoin passive income involves maximizing returns on your Bitcoin holding. Bitcoin is the largest cryptocurrency in the market with a market capitalization of more than $800 billion - which also means it is the best crypto to earn money with.

You can earn passive income with Bitcoin through:

• Mining: This involves solving cryptographic puzzles and adding new blocks to the Bitcoin network. You can set up your own Bitcoin mining equipment or sign up for cloud mining. You only need to pay a one-time fee for the contract to receive your share of the mining rewards. Moreover, cloud mining does not require buying any software or hardware. However, it is sensible to always verify the credibility of the cloud mining company before investing your money.
• Buy and Hold (HODL): Involves buying Bitcoin and holding it for the price to increase. You simply buy some Bitcoins and hold them in your wallet. As soon as the price surges, sell the assets and enjoy the profit. However, you should know the right time to sell.
• Lend Bitcoins: If you can buy Bitcoins and hold them, why not let your Bitcoins make money for you? Simply lend your Bitcoins to other people and earn an interest in return. Top lending services include Coinbase, Binance, and Bitbond. These platforms allow you to earn up to 15% in interest annually.

Ways to Earn Passive Crypto Income

To find the best ways to make passive crypto income, you must start with clear goals and plans. You’ll need to know how much you can commit in terms of money and time. And you’ll need to be prepared to make short-term sacrifices to meet your long-term aims.

Here are some of the best passive crypto income ideas that almost anyone can use.

1. Stake Coins

Proof-of-stake (PoS) is a consensus mechanism that compels clients to stake their money instead of contributing to the network computing power (as is the case with Proof-of-Work chains like Bitcoin). Staking gifts holders cryptocurrency tokens in return for verifying transactions and securing the blockchain.

Staking cryptos is a great way to generate passive income. One can make between 10% to 20% interest each year on their assets by staking tokens. But it does take some specialized skills to make good profits.

Some projects have no or low thresholds for staking. For example, you can start staking Cosmos with a minimum of 0.05 ATOM, and Cardano with a minimum of 1 ADA (minimums vary by staking platform). Ethereum, however, requires a minimum of 32 ETH unless you join a staking pool.

Thus, staking PoS tokens is a common approach to earning passive crypto income. Lengthy "HODLers" (people who buy crypto to hold) are big fans of staking their cryptos. It boosts their trading portfolios' expected gains.

2.Participate in Yield Farming

Yield farming is depositing cryptocurrency in a trading and lending pool and then staking the protocol's coins to earn extra coins.

If you're yield farming on a decentralized exchange like PancakeSwap, you'll need to stash two coins into a liquidity pool to get revenue from transaction fees. In addition, you have to stake a group coin, named LP token, that you can invest to receive yield farming profits payable in the platform’s token - CAKE! You can then trade your earnings for ETH, BTC, or fiat currency.

3. Join Airdrops

Many crypto projects often use airdrops to promote their coins and gain traction within the crypto community. The project asks crypto investors to help perform specific tasks (such as sharing posts, signing up to the platform, etc.), and in exchange, users receive the project’s tokens. That’s how blockchain projects incentivize the use of their platform and coins. Once the project hits the market, those tokens can be traded for other coins or exchanged for cash.

4. Try Cloud Mining

Cloud mining is the leasing of Bitcoin mining equipment from specialized mining facilities. It allows one to earn regular passive crypto income without buying and maintaining the mining gear. Like Genesis Mining and HashNest, entities levy a daily service fee on their cloud drilling rights.

Cloud mining gives crypto investors a handy passive income possibility. However, it also carries a significant degree of volatility. This is due to shifting crypto rates and mining challenges.

5. Start Crypto Trading

Trading cryptocurrency is one technique to get passive income through trading. Cryptos are suitable for trading due to their pricing fluctuations and popularity. You can speculate on both increasing and decreasing prices (That is, go long and short, depending on the coin). This means you can make a profit regardless of how the market is moving.

How to Capitalize On Rising Crypto Prices (Bull Market)

• 1. DCA buying: Instead of buying assets in bulk, you can break purchases into multiple trades to reduce the average price. This is known as the Distributed Cost Average.
• 2. Leverage long positions: Take long positions on a margin account. This allows you to sustain a loss without exposing your whole portfolio to risks.
• Invest in obscure tokens: Buying less-known tokens for a low price is a good way of profiting from price increases across the board.

How to Navigate the Market When Prices Go Down (Bear Market)

• 1. Use delayed orders: Bearish trends can cause significant financial losses if you don’t use SL (stop loss) and TP (take profit) orders to limit risk.
• 2. Use technical indicators to identify trends: Pay attention to MACD, Moving Averages, and Directional Movement to determine the strength of the current trend.
• 3. Balance your profits: Add short positions to the portfolio to reduce the exposure of your long positions to risks associated with falling prices.

Investor Takeaway

It is critical to remain focused and follow your initial strategy to ensure long-term success. Also, you can use advanced automation tools like AI bots to boost your earnings. Refonte Infini allows you to run a complex scientific trading bot system and make money consistently. You also enjoy the unique risk mitigation features of an AI-driven automated trading system.