While we all want to jump in on the crypto train, it goes without saying that not everyone can be an active trader. That doesn't mean that you cannot earn some passive income with your BTC holdings. Thanks to the innovations brought about by DeFi, here are the top 5 ideas of how you can now earn passive income using your bitcoin.
Bitcoin Lending
Crypto lending was made popular by the rise of crypto derivatives. Several legit crypto lending platforms guarantee a daily interest on your BTC. That means you must deposit your bitcoin holding with them for a specified period. During this period, you'll earn daily, weekly, bi-weekly, or monthly interest.
Thanks to smart contracts, peer-to-peer lending platforms are also on the rise. Without the intervention of a third party, person A can borrow money directly from person B, and person B receives interest from person A. Since these are rather short-term loans and the borrowers have rather poor credit ratings, the interest paid is correspondingly high.
With bitcoin lending, you get to maintain your portfolio and earn passive income even when the markets are down. That means you can afford to wait until the markets recover. This is the primary reason why lending is better than HODLing.
Bitcoin Cloud Mining
Whenever the topic of bitcoin mining comes up, most of us would shy away due to the sheer cost involved in mining. Since mining BTC involves the proof of work consensus mechanism, setting up mining rigs and the electricity costs do not make mining worth it. However, with cloud mining, the associated bitcoin mining costs are significantly reduced.
If you do not want to invest in expensive computer equipment yourself, you can easily rent rental equipment for mining. Cloud mining is a practical method by which you buy computing power from specialised data centres and mine BTC.
You don't need any technical background knowledge about the required equipment, nor invest in equipment yourself that may quickly become obsolete. You are flexible and can rent or cancel a cloud mining provider as needed.
RoFx Expert Advisor
RoFx is one of the oldest and most reliable fintech companies catering for crypto investors. Founded in 2009, RoFx pioneered robot trading by offering expert advisor (EA) services to the public. Notably, the EA operates on a self-learning neural network. That means you can expect that your investment and trading strategies with RoFx will only get much better with time.
Between 2017 and 2020, RoFx has made over 379% returns. So far, in 2021, it has made over 43%. Note that RoFx doesn't use leverage when trading to mitigate unnecessary risks when trading clients' money. More so, your deposits with RoFx are 100% safe, and any negative results are secured with a reserve fund.
Earn Passive BTC income with RoFx
RoFx recently launched a superior V2.0 platform. Here, you can earn a Daily profit of up to 0.97%.
You can choose from three packages which have five plans each. The plans have a fixed minimum and maximum amount of BTC deposit. Trial (0.05 – 0.25 BTC), Easy Start (0.25 – 0.5 BTC), Moneymaker (0.05 – 2.5 BTC), Gold (2.5 – 5 BTC), and VIP (5 BTC – Unlimited). All packages have varying performance fees, with the highest set at 50% and the lowest 5%.
This offers the ultimate passive investment platform for beginner and experienced traders since all you need to do is deposit your BTC, sit back, and enjoy the profits.
BTC HODLing
HODLing is perhaps one of the oldest ways of earning passive income with bitcoin. It simply involves treating BTC as an asset. And as with any asset, the goal is to buy low and sell high.
This strategy means holding on to your BTC portfolio for a long period compared to short-term trading. Typically, crypto investors often prefer to capitalise on the inherent bitcoin volatility. This means they buy a short-term dip in the price and sell when BTC reaches the resistance level. In HODLing, one doesn't sell their portfolio even when there is a price dip.
BTC HODLers believe in the fundamental value of crypto. Typically, they believe that crypto will take over the functions of mainstream finance in the long term. Any short-term price fluctuation is just noise. Over the past two years, BTC HODLers have earned over 900% gain.
Invest in Wrapped Bitcoin (WBTC)
The DeFi platform was built on the Ethereum blockchain. That means that for one to participate in DeFi, they must have compatible crypto. And as we know, BTC isn't. That's where Wrapped Bitcoin comes in.
WBTC creates an interface between Ethereum and the Bitcoin network. For this purpose, WBTC is the first coin to be fully backed by BTC reserves. The new development aims to use bitcoin (BTC) for typical Ethereum services, such as dApps or smart contracts.
That means that BTC holders can participate in crypto staking and invest in staking pools.
Joining Liquidity Pools
Typically, crypto exchanges use the order book model like those used by traditional stock exchanges. That means there must be buyers and sellers in the market. However, given the rise in popularity of cryptos and the fact that most cryptos have a finite supply, there's an increasing need to provide continuous supply in the market.
Liquidity pools are smart contracts into which anyone can "deposit". If you are trading via a crypto exchange, the counterparty in a trade is not necessarily another buyer/seller but just a liquidity pool. Participants in a liquidity pool receive remuneration for the provision of liquidity or receive shares in the generated trading fees. It will require some knowledge for this method, but it can be an attractive option when building wealth with BTC.
We hope you find this article useful and educational. Consider trying these methods to make a steady flow of passive income using your cryptos in 2021 and years to come.
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