Cryptocurrency has seen insane growth in the past couple of years. Many people have experienced triple-digit returns in just a few months as the world has been waking up to crypto as an asset class.
The FinTech industry is changing, in large part thanks to the technology that crypto provides.
But there’s far more to this digital currency than buying, holding, and praying for gains. There are active and passive ways to make additional gains on your crypto.
One of the easiest ways to do this is with a crypto interest account. One of the latest cryptocurrency trends to hit the scene, crypto banking offers passive and safe interest, compounding your portfolio.
Want to learn more about putting your crypto investments to work? Read on below to learn how to get started today.
Getting Started in Crypto
Before you can start earning interest on your crypto, you need to own crypto.
To get started, you just need a crypto wallet, and some crypto inside of it. One of the easiest ways to get your hand on bitcoin, Ethereum, and some other popular cryptocurrencies is to visit a crypto ATM. Visit bytefederal.com to find a location near you.
Once you buy your coins, you can create an account on any of the crypto platforms mentioned above. You’ll be able to send your crypto from your mobile wallet to your new crypto interest account.
Alternatively, you can buy crypto through an online exchange. You’ll need to perform some identity verification in order to get started.
What Is a Crypto Interest Account?
Crypto interest accounts are just like savings accounts at your bank, but 100x better. The banks that really care about their customers might offer around 0.5% interest on your savings.
And if you aren’t aware of our current inflation rates, it means your bank is scamming you and you are losing money every day.
A crypto interest account allows you to earn real interest rates on your holdings. You can earn up to 10% on your crypto holdings in a secure crypto account. Your interest compounds daily, and most platforms will dish out interest on a monthly basis.
For most people, the best crypto interest account is the one offered by BlockFi.
BlockFi is extremely reliable and pays out decent rates. As of January 2022, you can earn up to 4.5% on bitcoin, 5% on Ethereum, and up to 9.5% on stable coins like USDC and USDT.
Users of BlockFi like that there are already tax reporting features built into the platform. This makes it super simple to report any gains or losses on your tax return.
Other Ways to Earn More Crypto
Crypto interest accounts are the easier way for new crypto investors to earn money on their crypto holdings. It functions the same way as the savings accounts they are used to using. These should be the first place you park your crypto investments.
But they aren’t the only opportunities for earning additional crypto. For a slightly more advanced yield-bearing strategy, check out these options.
Staking
The process of staking your crypto is essentially the same as storing it in a crypto savings account. But when you stake funds, you are contributing to the overall security of the blockchain, promoting a safe and secure financial ecosystem.
For example, if you stake Polkadot, you are contributing to the network security of the Polkadot blockchain by helping to verify transactions on the network and prevent fraud.
As a reward for those who stake their funds, they receive the network transaction that comes from the users of the blockchain.
Depending on what coins you stake, and what platforms you use to stake them, you can earn upwards of 20% APY or more on your crypto.
Lending
From the user’s perspective, leading your crypto is a very similar process to staking. You simply lock your funds into a specific account and let the interest accrue and compound.
Most crypto platforms let users contribute as much or as little as they want to a lending pool, rather than making direct loans to individuals.
Borrowers then come along, offer up some of their cryptos as collateral, and take out a loan from the pool of funds. They pay interest and you earn interest. If they default on the loan, they forfeit their collateral, ensuring you never lose money.
It’s a low-risk, medium reward effort on your part. Interest rates you can earn by lending generally range from 4% to 14% APY.
Borrowing
Looking for some advanced crypto earning strategies. Rather than lending, you can be on the borrowing side of the equation.
To borrow crypto, you’ll need to put up collateral. Then, you can take out a loan, often up to 75% LTV, and put that crypto to work somewhere else to earn yield.
For example, you might have $10,000 worth of Ethereum collecting dust somewhere. You want to hold onto it because you anticipate long-term price appreciation. But you also want to start earning more now.
So you deposit your $10,000 in ETH as collateral, allowing you to retain ownership and ensure you get any price gains over time. But you take out a loan worth $5,000 (50% LTV).
You use that to acquire additional ETH. You stake that ETH for 5% APY.
If ETH increases in value by 10%, then your $10,000 is now worth $11,000, and your $5,000 is now worth $5,500. You could then pay back your $5,000 crypto loan for a cool profit of $500.
This is a common strategy for crypto users in the Defi space. There are definitely risks involved, so always do your own research before jumping into the latest yield maximizing strategy.
Crypto Credit Cards
Another simple option to earn more crypto without thinking about it is with a crypto rewards credit card. Rather than earning points from your bank, or miles from an airline, you earn cryptocurrency.
Your balance increases over time as you use your card for everyday purchases. If you’re buying stuff, you might as well be increasing your wealth at the same time.
Gains Now, Gains Tomorrow
As a new industry, the cryptocurrency market is ripe with opportunities to make some serious gains. You just need to know what the best options are.
Sure, you can just hold your crypto in a wallet for 10 years and hope to make some gains. But smart investors are looking for gains today, and a crypto interest account is one great way of benefiting from both price appreciation and compound interest.
Looking for more crypto-related ideas? Visit our blog now to find other helpful tips.
