As cryptocurrency is one of its most profound bear markets, earning passive income through trading and investing has never been more appealing to many traders and investors.
Buying crypto assets that generate passive income can help offset losses during market downturns and crashes. These passive income opportunities are also a more proactive way to grow your crypto capital than using the increasingly outdated HODL strategy.
Holding coins for the long term worked great in the earlier years of the crypto market, but it’s no longer an optimal strategy for earning passive income. You need to know about these strategies if you want passive crypto income in 2022 and years later.
Airdrops and Forks
Forks and airdrops are ways to get new coins into your wallet. For example, a fork is a way to launch a new blockchain-based on an existing chain with its own modified rules and functionality.
Staking is a way of helping to validate transactions on a proof of stake (PoS) crypto network by locking your funds there. In exchange, you get rewarded with the network’s native cryptocurrency.
You don’t have to use an entire node on many proofs of stake chains to join staking. On DPoS chains like EOS and TRX, you can vote for a delegate that will process your transactions and allot the prize with you. The DPoS model is affordable for any crypto user to generate lucrative gains from staking. Although highly scalable, TRX price has dropped by $0.01 in the last 24 hours.
Earning Dividend From Tokens
Dividend-earning tokens are cryptocurrencies that provide a steady income to their holders in the form of another coin on a related platform. For example, VeChain (VET) generates rewards in the form of another token on its sister platform, Thor (VTHO). At the same time, NEO and KuCoin Token (KCS Coin) do likewise through GAS and KCS, respectively.
Cloud mining is famous for earning cryptocurrencies without purchasing expensive mining equipment. In cloud mining, you pay a regular monthly or yearly fee to a service provider for the opportunity to “rent” their mining resources. Your fee entitles you to a particular share of the rewards from crypto mining operations.
Crypto Affiliate Program
Crypto affiliate programs are one of the most effective ways to earn passive income as a crypto blogger or social media influencer. By bit, Paxful and CoinLedger are some of the most popular platforms for making crypto through affiliate marketing.
As the name suggests, crypto lending is a way to make money by using your cryptocurrency as collateral for loans. The borrower can then use the loaned funds for any purpose, with interest charged in the form of either a fixed or variable percentage of the amount lent. Interest rates are typically higher than those offered by banks, and often fluctuate based on market conditions.
Crypto lending works like this: if you deposit a certain amount of bitcoins/altcoins (for now, only Bitcoin and Bitcoin Cash are accepted) into your account, you get a credit line in dollars/euros/yen/etc., which you can use to buy additional funds in crypto exchange platform.
- Decentralized lending protocols are platforms that allow you to lend your virtual money to groups of borrowers and earn interest on them. These agreements are an excellent way for experienced traders to increase their returns.
- Centralized lending is lending your digital money to private companies for interest. It’s an alternative for individuals who want to make money from their digital assets but don’t feel at ease or skilled enough to comply with this agreement.
- Peer-to-peer blockchain loaning networks let you lend cryptocurrency directly to other users. Based on past borrowing history, these networks requires credit scores for their users to help in determining the risk involved in loaning funds.
- Margin lending is a way for crypto investors to increase their trading power. Margin traders will make use of the available funds, while lenders can earn interest on their funds and enjoy the benefits of trading on Bitfinex.
Bybit Savings lets you earn interest on your crypto deposits. Shark Fin is a principal-protected short-term investment that can offer high yields in low-volatility markets. A dual Asset is a long-term investment option that offers flexible investment periods and the potential for higher returns in low-volatility markets. Launchpool is Bybit’s staking platform which allows you to earn passive income by delegating your coins to validator nodes.
Liquidity mining is a term used to describe providing liquidity to coin swap pools on decentralized exchanges (DEXs). You can be paid with tokens in exchange for providing your funds. These tokens are synthetic assets that may reinvest on the same or other platforms.
Yield farming is depositing your crypto funds into yield-generating pools on decentralized finance (DeFi) platforms to earn interest. DeFi protocols are like lending and borrowing protocols, but they’re built on top of blockchains. Some DeFi protocols let you earn interest on crypto holdings by lending them out. Other protocols reward investors for holding onto their tokens for a certain period. And some protocols allow you to earn interest by borrowing other people’s crypto assets.