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Effortless Ways to Earn Passive Income with Cryptocurrencies

Moneymagpie Team 1st Aug 2024 No Comments

Reading Time: 5 minutes

The last couple of years have been tough for those who seek financial stability. Traditional jobs do not offer the same financial security as before because of the high inflation, rising living costs, and economic uncertainties, prompting many to explore alternative income sources and investment opportunities. But what showed, especially in the early months of COVID, was investment into cryptocurrencies can be a life changer. Thanks to the largest innovation in the past decade earning passive income has never been easier and more accessible. With sound strategy and careful market watch, cryptocurrencies offer plenty of opportunities for profits both in the short term and long term. Here is our list of the best possible ways of earning passive income by using cryptocurrency strategies that could potentially become your main source of revenue. 

Crypto’s Passive Income Potential

Passive income is the idea of making money while not being present, which is the total opposite of traditional jobs. And cryptocurrencies do have that power by putting out many opportunities to increase your income and build great wealth with less effort, all you need is a fast wifi connection. We would like to present to you the top strategies of earning passive income in the crypto world that can diversify your portfolio and increase your returns and those are staking, lending, mining, and supporting the network. Understanding each of these processes would make your experience much easier and more enjoyable. Make sure to not give up until you find what suits your style the most. Also keep in mind that the potential returns from passive crypto income vary significantly. Staking and lending offer regular interest payments, while mining provides rewards in newly minted coins. Returns are influenced by factors such as cryptocurrency price movements, network demand, and your level of involvement.

Staking: A Stable Path to Passive Earnings

Staking is our first pick, since it is a method with relatively low risk compared to other strategies. The main definition of staking is holding or locking crypto assets for a certain time frame in a wallet, to support the blockchain operations. It is an appealing option because of the regular rewards, if you prefer stability.  Longer staking periods can provide higher returns, but the extended duration might compromise liquidity.  The downside is that it requires higher amounts of assets invested in a predetermined period of time, making these assets less liquid. 

Steps to Begin Staking

The first step is to choose a cryptocurrency that supports staking such as  Ethereum 2.0 or Bitcoin. Then you need to create a wallet on one of the most popular crypto exchanges that is compatible with staking for either Bitcoin or ETH and move your cryptocurrency into it. Assign your tokens to a staking pool or stake them independently by adhering to the specific guidelines of the network. The next step is to lock the tokens and start staking. Rewards should be claimed from time to time, following the network guidelines. 

Yield Farming: High Returns with Higher Risks

Yield farming is a strategy desired by the ones who are up for taking risks. It involves high risk transactions that do earn higher returns. The strategy itself is defined as a process where the investor lends or locks assets on DeFi platforms, to earn interest or additional tokens, by supporting various protocols with providing liquidity. An individual approach defines the amount of income, since it offers flexibility to move assets to more profitable opportunities. As traditional finances, the same rules apply here, more stable assets provide secure returns.

Steps to Begin Yield Farming

Make sure to do proper research before choosing your DeFi platform, after all it is the most important step. Always look for a secure wallet in which you transfer your crypto and link it to the DeFi platform. Next, choose a liquidity pool considering the potential returns and the stability of the asset, and deposit your assets. Occasionally collect your rewards, and either reinvest them or diversify your possessions

Crypto Lending: Earning Interest without Selling Assets

Crypto lending is a simple strategy that helps you maintain your assets, and earn a passive income by lending them to borrowers through platforms. It is an attractive option, because you don’t have to sell your assets while earning returns.

Steps to Start Crypto Lending

The ideal crypto exchange platform for staking Bitcoin and other cryptocurrencies should provide the best interest rates, terms and security measures is the key to successful transactions. Which crypto exchange you choose is a personal choice, but it is always good to check a guide which will present the pros and cons of each one. Choose wisely, according to your preferred lending terms. After transferring your assets to the platform, you are ready for some lending and getting interest on your account.

Dividend-Paying Tokens: Earning from Project Profits

This strategy is the closest you could possibly get to traditional investing, as certain tokens offer dividends, providing a steady income stream. If the project goes well, these tokens provide a portion of the project’s profit.

Steps to Invest in Dividend-Paying Tokens

Purchase a token that offers dividends, and transfer them to your wallet. Make sure to follow the project instructions to meet the criteria for receiving dividend payouts. Regularly check the project status and keep up with updates on the process. The final step is to get your dividends and reinvest them for a long term profitability.

Cloud Mining: Mining Without the Hardware Hassle

Cloud mining allows you to participate in cryptocurrency mining without owning hardware. By renting mining power from a provider, you can mine cryptocurrencies remotely. Just make sure to do a check up on the provider, get to know if the provider is reliable, what are the fees etc. The profits are not as massive as many other strategies, but it doesn’ require expertise to do it, and it’s a really simple form of passive income, as long as you do your research.

Steps to Invest in Cloud Mining

As previously mentioned, choose the cloud mining company wisely, it has to be well known and reputable in crypto worlds. When making a decision on the provider take in consideration the hash rate, contract length, fees, and the cryptocurrencies supported. Next set up a profile and create a plan custom to your goals and budget. Take advantage of the company dashboard and stay on track by keeping an eye on your mining progress. From time to time withdraw your mined cryptocurrency to your digital wallet.

Crypto Savings Accounts: Simple and Predictable Returns

This one is probably the most simple strategy of making some money. We present to you the safest form of investing, but followed by the lowest returns compared to the other options we have mentioned before. Crypto savings accounts provide an easy method to passively increase your digital assets. Larger deposits are rewarded with higher returns. Also some platforms offer higher rates for new users or for specific cryptocurrencies. If you are a first time investor, make sure to use all of the benefits. 

Steps to Use Crypto Savings Account

The process is quite simple, after you choose your provider, sign up and complete the well known verification process. Make sure to read all of the terms and choose the best platform for your needs. The final step is to deposit your assets and keep the interest coming.

Final Thoughts

By taking advantage of these opportunities cryptocurrencies offer, you too could be enjoying your best life without worrying about finances. You don’t have to be a financial guru to use these strategies for extra income. So make sure to do additional research and don’t hesitate to give them a try, and see the money coming.

Disclaimer: MoneyMagpie is not a licensed financial advisor and therefore information found here including opinions, commentary, suggestions or strategies are for informational, entertainment or educational purposes only. This should not be considered as financial advice. Anyone thinking of investing should conduct their own due diligence.

Cryptoassets are highly volatile and unregulated in the UK. No consumer protection. Tax on profits may apply. Don’t invest in cryptocurrency unless you’re prepared to lose all the money you invest. Cryptocurrency is a high-risk investment, and you should not expect to be protected if something goes wrong.


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Jasmine Birtles

Your money-making expert. Financial journalist, TV and radio personality.

Jasmine Birtles

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