Passive income is what many people desire to have, with crypto one of the means to have it.
People what to make money work for them to gain financial freedom. This can be done by making streams of income that don’t need much of your time and effort.
Cryptocurrencies have made it possible to make passive income via several strategies, even though it is risky. With the price volatility and bankruptcy of some crypto exchanges and platforms like FTX, crypto remains the most dangerous form of investment. However, it is still a means of making money today if you have the technical know-how and can take risks.
This article will look at crypto’s top passive income strategies. Before then, let’s understand what passive income is all about.
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What is Passive Income?
Passive income is a means of earning money steadily with little effort. While many people want to be wealthy, making passive income is top on the list of things to do.
Many have described passive income as making money while you sleep. Although you need to do one or two things to make this possible, you’ll need to have money to create passive income for yourself.
Passive income can come in two ways; you can earn passive income by creating and investing. It can be reached via investment in real estate, dividend stocks, cryptocurrency, etc. In creation, you could sell digital products and music, write books or make other products that earn cash.
Crypto as a Means of Earning Passive Income
Cryptocurrencies are a means of making quick money today. There are a lot of people who have made a fortune via crypto, which can be through many of its endeavours.
Crypto assets such as Bitcoins, Ethereum, Solana, Dogecoin, and NFTs can be used to earn passive income. Although earning passive income through digital assets such as crypto is for the averse risk takers.
If you must make crypto a means of earning passive income, you should put what you can afford to lose.
Top 3 Passive Income Strategies in Crypto
With an internet connection and funds to invest, cryptocurrency can make anyone participate in its distributed economy. The best and most accessible ways of earning passive income in crypto are discussed below.
1. Earn By Participating in Crypto Lending
Some crypto coins give you a lot of benefits when you own them on exchanges. Holding some crypto assets makes you involved in its governance. However, earning with it when stored is quite top of it.
You could earn through decentralized finance (DeFi) platforms by participating directly in a crypto lending process. The crypto you purchased on an exchange can be loaned to a pool. This is used to lend to others for interest and fees. With this, you earn a passive income just for committing your coins/tokens to the course.
The amount you earn from this depends on the duration of the loan, the amount of your token given out to the pool, and the internet rate attached to it.
2. Earn Through Crypto Staking
Different from mining which is quite expensive and energy-consuming is staking. Mining (proof-of-work)is no doubt a means of earning passive income in crypto but staking (proof-of-stake) is far better.
Staking allows you to earn when you hold your coins/tokens in a wallet for some time. Here, validators work instead of miners, as seen in the PoW consensus mechanism.
Some exchanges allow you to stake automatically with your crypto coins. You can also hold the cash in a cryptocurrency wallet (software or hardware) to earn passive income via staking rewards. In this case, you don’t need to solve mathematical puzzles using powerful computers.
Ethereum, which has permanently moved from the PoW to the PoS consensus mechanism, is one of the best cryptos to stake. Other top crypto assets to stake are Solana (SOL) and Cardano (ADA).
3. Play-to-Earn Gaming
Play-to-earn gaming has been one of the raves of the moment, alongside selling NFTs in the crypto space. There are many crypto games available for you to earn. Axie Infinity, Sandbox, and Decentraland are top on the list.
Passive income via this strategy is popular in countries like the Philippines for those who are out of jobs or want additional income.
The Metaverse is one element of crypto that is developing in this regard. It is quite an excellent strategy to earn in crypto today.
Earning passive income is a step to becoming wealthy which can be provided by crypto, among other investment vehicles and creative means.
Crypto no doubt has a high risk in its activities/endeavours. As easy as it appears to be a source of earning passive income, it is essential to research before going into it. The issues with cryptocurrencies can be a means of losing all instead of getting rich if care is not taken.