Over the past few years I’ve become very passionate about both passive income and crypto. Although blogging was something I was interested in for years, I didn’t start building blogs until I became interested in building additional income streams. If you’re an artist or deal with mental health issues, like me, having money coming in from more sources than just your paycheck can make a huge difference. Passive income can free up more of your time so you can focus on your passion projects, or if you need to take some time off to focus on your health you’ll have a cushion to do so. You never know when you might lose your job or simply want to travel and take time off.
That being said, passive income isn’t really passive. Whether you’re starting up a rental property, building a blog, or investing in dividend paying stocks, you will need to spend some time (and probably some money) on your passive income streams. Passive income simply means that you aren’t trading your time for money.
I started learning about Bitcoin in 2014 and was instantly hooked. It’s so exciting to watch an entirely new financial system being built before our eyes! The crypto-world is in the midst of a Cambrian explosion. Capital, tech, and brainy people are jumping into the market left and right. I now do writing and marketing for crypto and blockchain projects and also teach my friends and family how to start using Bitcoin and other cryptocurrencies. In the past few years, investors’ options for returns have gone from the age-old HODL (hold on for dear life) strategy to a veritable smorgasbord of choices. With more choices come more options for earning money online. When I found out that I could earn passive income on the cryptocurrencies I already owned, I was very excited to explore the option. Remember, though, that the cryptocurrency market is quite volatile. The dollar value of your cryptocurrency holdings will still go up and down, but with these passive income methods you will increase the amount of each crypto you hold.
I’ve counted at least 13 ways that you can start earning passive income on your cryptos.
Disclaimer: This information should not be interpreted as an endorsement of cryptocurrency or any specific provider, service or offering. It is not a recommendation to trade.
What is Passive Income?
The passive income approach creates revenue streams that pay out over time. This is usually low-effort work with a long-term focus that generates returns.
Not all forms of passive income are created equal. When you’re deciding which to invest in, consider these six characteristics:
- Upfront costs
- Ongoing costs
- Time to setup
- Average hours per week
- Ease of implementation
Let’s dig into just what passive income opportunities are available in the crypto space. Remember: more revenue streams mean more opportunity.
The simplest way to start earning passive income in crypto is to download Brave web browser and enable Ad rewards. You can do this on both your desktop and your phone. Brave is a free browser which is faster, more secure and private than other browsers. It doesn’t allow websites to track you, and it disables ads. However, Brave will pay you in Basic Attention Tokens (BAT) if you allow ads to show up. You can change the settings to allow fewer or more ads. They are paying out 70% of ad revenues to users, and BAT is one of the top cryptocurrencies in the market.
My favorite way to earn interest on my cryptos is through lending platforms. They are really easy to set up and keep track of. Put your crypto to work and earn money online. Many popular cryptocurrencies like BTC, ETH, and DASH can be lent for profit. You give up your coins for a set amount of time and make a specified return, which is much like the interest rate a bank pays for using your money. Like any lending platform, there is some risk associated with this method.
There are a range of lending options available:
MORE ABOUT CELSIUS NETWORK
Celsius is a phone app where you can easily send your cryptos and earn interest on them. Each week they send you a notification about how much interest you earned that week. You can also borrow against your crypto. There are zero fees to use the app. You can earn up to 10% on more than 15 different cryptos, including Bitcoin, Litecoin, Ethereum, Ripple, OmiseGo, and Ox.
MORE ABOUT CRYPTO.COM
Crypto.com is a wallet phone app which allows you to easily send and receive cryptos. You can also earn interest on Crypto.com’s coin, MCO, as well as BTC, ETH, XRP, and other popular cryptos by staking them for a set amount of time. You can earn up to 6% on your cryptos just by leaving them in your wallet. The feature of Crypto.com that I’m most excited about is crypto VISA cards. These physical cards are going to be sent out soon and come with some awesome rewards, such as airport lounge access and rebates on your Spotify subscription.
These methods can get a bit technical so it’s best if you already have some experience with cryptos. Passive income strategies in this category require some amount of trading and market knowledge.
Staking requires buying certain cryptocurrencies that run on a proof of staking, or PoS, consensus algorithm. Unlike mining, those who hold coins can lend coins to the network, which it uses to validate transactions. The more coins you lend, the more the network rewards you.
Popular staking coins include:
Staking is a true way to generate passive income. Hold the coins in an e-wallet, stake to the network, and earn dividends or interest. Be warned though: returns can vary and you may not be paid in the same coin you staked.
Similar to staking, a crypto-dividend is a reward given for lending a token. Tokens are cryptocurrencies that power the exchanges. Exchanges usually have their own tokens. Token owners can stake tokens that the exchange uses, which like a real-world dividend, entitles the holder to a portion of the exchange’s profits.
Popular exchanges and their token:
- BitMax exchange & BTMX token
- KuCoin exchange & KuCoin Share (KCS)
- CryptoBridge exchange & BridgeCoin (BCO)
Naturally, investing in early-stage exchanges can be very risky. Furthermore, the value of the exchange tokens could easily fall to nil.
While not a passive investment strategy necessarily, Salt Lending will let you borrow against your crypto assets. Take the cash and reinvest elsewhere. This is high-risk and requires some serious commitment, as your investment could get liquidated.
For those of you who are more technically inclined, this is the section for you. Earn passive income by putting your tech skills (and hardware) to work. Some assembly required.
Since the beginning of BTC, miners have been hard at work earning a (relatively) passive income. Sure, it takes a lot of hardware, copious amounts of energy, and some serious technical know-how.
In short, miners power the network of cryptos like bitcoin. Miners verify the blocks of the network and are sporadically rewarded for solving complex mathematical equations. Not all coins can be mined and some are more valuable than others. Learn what to mine here.
While cheaper than mining, masternodes are difficult to set up, costly, and require a good deal of work. That said, a masternode can be a way of earning passive income if you have the chops. Discover more about masternodes at masternodes.online.
A crypto trading bot like Gunbot can be used to buy and sell cryptocurrencies automatically, based on price or other market indicators.
Generally more time-intensive than normal trading, a trading bot has the potential to be a passive source of income, that is if you can set it up correctly. Not for the faint of heart, as a mistake with the bot’s parameters could spell trouble for a portfolio.
A combination of financial know-how and technical chops, arbitrage bots exploit the difference in the bid-ask spread between exchanges. While you could do this yourself, it would require a lot of hands-on work and isn’t exactly passive.
The passive income strategies so far have required some effort or investment. You need to get out there and put in a little work. Not so for these next ones. They happen more as the result of luck, of being in the right place at the right time. The best thing: they’re free.
Airdrops, Forks, Burns and Buybacks
- Coins are dropped into your wallet by an exchange. Used as a way to get new coins out into the market. Be on the lookout for airdrops.
- These happen when a cryptocurrency needs a software upgrade that creates two versions of the currency. Bitcoin Cash is one such example. Owners of the coin get equal holdings on the new version and the old.
- Burns and buybacks. This happens when the creator of the crypto wants to create scarcity. They purchase the coin and burn it in an unaccessible wallet.
Who doesn’t like getting something for nothing? Some cryptos pay tokens for just holding. These include:
Odds and Ends Options
This last section is a grab-bag of unusual goodies. They might take more work and might not be profitable, but certainly represent some exciting opportunities should they take hold.
That’s right, you can breed digital crypto-cats to save or sell at a later date. What might be the next collectible fad, Cryptokitties and the KittyVerse continue to gain in popularity. You can start right meow.
Just Plain Rewards
Don’t have any crypto and want to earn crypto online? You might try Lolli. Created to spread bitcoin to the world, Lolli allows you to receive bitcoin every time you shop online at designated retailers.
Dinner is Served
If you can’t feel the FOMO now, then I don’t when you will. The crypto-market has a slew of options for those looking to make a bitcoin buck of passive income.