How to Make Passive Income with Crypto in 2022
Most crypto investors now are making money from just buying and selling crypto. But there are many other ways to earn more money with crypto.
Such as in any other investment there are risks also in this one. But there are many ways for you to minimize the risk when investing in crypto. You can earn passive income with crypto, not just by selling and buying. The ultimate goal is to make your money work for you so that you don’t lose all of your money due to inflation.
Make passive income with crypto. How?
The banks don’t give much interest rate these days. In fact, the average interest rate in the US is 0.06%. With such low rates, people try to find other ways to earn some additional passive income. So in this article, we will show you a couple of methods on how you can earn a passive income with crypto.
Holding crypto in a high interest checking account – Onjuno
This is a passive method for increasing your income because all you need to do is put your money in some of these accounts and by default, you will going to get money by not doing anything. This is a really nice method because you can set up your account and just forget about it.
One of the accounts you can use for this is on Juno. This is a mobile checking account that has an interest rate of up to 6 percent, which is more than any other bank. A small bonus is that their platform is really good.
They are also one the, if not the easiest and safest way for you to manage your crypto or cash. The thing you need to do is just place your money in their FDIC insured checking account. Once you put your money you will start earning immediately.
If for any reason you decide to withdraw your money you can do it at any time right away. So it is similar to staking but better. In Onjuno there is no limit on how high your deposits can be and there are no hidden clauses.
Staking is a strategy of securing a crypto network that incentivizes users for keeping their crypto assets locked. This way you can earn staking rewards.
This process leads to the proof-of-stake model that many modern blockchain technology use. The measurement of how a network is successful is less about how quickly the network can mine coins, but how one can participate or stake in the network.
The model of proof-of-stake is all about having the assets in one hand and becoming a validator in the future. Due to this, no one earns more assets on top of assets that are already staked.
The main advantages of staking are very high earnings rewards and allowing the investors to learn more about the technicalities of cryptocurrencies.
The only downside of staking is that when you stake crypto it has to be locked for some period of time. The longer you stake your crypto the higher the interest rate will be. By locking your coins you will earn passive income.
Mining is the process in which computing power and work are used to solve complex problems that can mine tokens and bring new cryptocurrencies to the market. Crypto mining also helps the process of authorizing transactions.
This is a very nice form of earning passive income because it is a solid computing rig. Basically, you invest money into the assets you want to mine. Depending on what you will mine the profits can be very high. For example, if you mine Ethereum the profits can be more than $4 per day.
The biggest risk or disadvantage of mining is the high starting cost. The mining devices can be pretty expensive. If you want to earn more money you will probably need better mining technology.
Yield farming is the process when you use defi platforms to maximize rewards. This said in simple words is that you are swapping tokens with various pools or protocols with the hope of capitalizing on high-interest rates.
This method is something like dividend investing but in the crypto world. Of all the previous strategies we mentioned before this one is with the highest risk, but also with the highest reward,
Investors in yield farming can be paid dividend payments even a couple of times per day. Yield farming is all about generating a profit and doesn’t contribute to the blockchain. This is the main difference between yield farming and staking, but also the fact that staking is much more regulated than yield farming.
We don’t recommend yield farming if you don’t have enough knowledge about the technology and smart contracts and definitely don’t do it if you are a beginner crypto investor.
Also read: The Difference between Trading and Investing