Investing in cryptocurrency is one way of attaining your financial freedom in the decentralized finance system. Most investors in the crypto space buy and sell coins on crypto marketing platforms to earn profit. With the right strategy, you can make good money trading actively, but this needs time. Does your daily schedule allow you time to trade? If not, here is the good news, if your daily schedule is tight and you still want to invest in crypto, there are many ways of investing and earning from virtual currencies without trading actively.
Investors call the passive earning method autopilot because your investment works for you and earns income even when absent from the trade platforms.Sounds great. Are you in India? If yes, you may be wondering: is investing in cryptocurrency legal in India? Yes, it has been legal since March 2020 when the Supreme Court reversed the ban on transacting with crypto by the Indian banks through a court order. Although the government is yet to put down regulatory measures on using virtual currency, you are free to trade and complete transactions using them.
Here are eight proven ways to invest and enjoy passive income in the crypto industry.
Provide Liquidity To Traders
If you have funds to invest but lack time to participate in buying and selling securities, you can deposit your funds in an account with core liquidity providers (brokers) who ensure the market has an adequate supply of securities to meet traders’ demands. Once you deposit your funds, the liquidity core provider will award you tokens and a percentage interest that your investment will earn and charge you a transaction fee.
When you invest in liquidity, you should choose a pair of currencies that your investment will trade on passively. Take time and study the previous market trends and choose a good coin pair. Whenever the currency pair you select buys or sells, you are awarded a transaction fee proportional to your investment.
Auto-Invest Your Savings
You can automate your crypto fund input under the dollar-cost averaging strategy (DCAS) offered by different platforms. When making your investment, you should choose the crypto coin you would like to purchase in a specified period, weekly, fortnightly, or monthly. The virtual currencies you buy automatically add to your flexible savings account and start earning profit.
Bitcoin and Ethereum are the common coins that allow you to auto-save in your flexible account and earn passive income. Before automating your savings, study the market trends and select the most profitable currency in the market with low volatility and non- bearishness.
The great thing about auto-investing is you don’t need in-depth knowledge about crypto to start earning. The percentage return on investment from auto-invest ranges between 5%-20%. If a company offers returns higher than 20%, do thorough research before you invest in a Ponzi scheme and lose your capital.
Stake Your Cryptocurrencies
Staking is a safe way of investing in cryptocurrency by holding your crypto coins and benefiting from their rewards. Ethereum, cosmos, and Tezo coins allow for staking. Here is how staking works: When you buy crypto coins and save them in a staking pool, they earn interest just like money does in a savings account. The coins in a staking pool are blockchain-enabled to record every transaction they undergo and the profit they should get. Staking your coins is free of risk and transparent because everything is recorded by blockchain technology.
Join a Yield Farm
A yield farm works as a money lending institution. In crypto investment, you can buy coins and tokens and put them on a trading platform. When traders borrow and trade with your coins and tokens, they pay interest which earns you profit. Unlike other investment methods, yield farming poses a great risk when you invest in it because of volatility.
One drawback of yield farming is that it is less profitable when more investors learn about it and venture into it, lowering the demand from borrowers and flooding the market with supply.
Invest in Digital Crypto Accounts That Earn Interest
BlockFi, Nexo, and SwissBorg are some crypto account providers that offer interest rates when you save with them. Instead of buying coins and adding them to your wallet, you can save with the digital accounts that provide a specified percentage interest periodically.
You can choose to receive daily, weekly or monthly interest on your investment at rates specified by the digital account owners. One merit of investing in digital asset accounts is that your interest is fixed and unaffected by the fluctuating market prices of different assets, which lowers the risk.
Do due diligence before you put your money in a digital wallet to avoid losing your investment to scammers posing as account owners.
Purchasing Dividend Earning Tokens
When you hold tokens from a company by depositing funds in their account, you are entitled to a fraction of their daily revenue. The number of tokens you hold determines the profit you earn from the company daily. This investment is friendly to investors with limited time to trade since all you do is hold the tokens and enjoy passive income daily.
If you choose to purchase and hold tokens in an entity, search for one that offers a reasonable fraction for dividends. Beware of fraudsters who pose attractive dividends to lure traders and steal the traders’ investment.
Invest In a Crypto Fund
Exchange-traded funds (ETFs) are crypto funds suitable for investors with low investment capital and limited time to trade. When investors buy coins and tokens together, they put them in baskets and track their price movement through the day using a synthetic chart. The ETF share price imitates the actual cost of the assets or securities. They lack transparency since the price on the chart is not real but an imitation of future prices that will fail to give investors accurate returns on investment.
Join a Crypto Guild
Do you know that you can play your favorite video game and earn from it? A crypto guild is a platform by crypto investors that offer gamers the requirements to earn titles in exchange for what they earn. If a game win attracts a monetary reward, the crypto guild supports players who are new in the game to earn winning titles, and the gamers pay the guild with their earnings after winning. Dao gaming and Axie are common examples of gaming guilds.
How Do You Invest In Cryptocurrency And Earn Passive Income?
Investing in cryptocurrency in India and other parts of the world is simple once you choose the suitable investment for your daily schedule. You need an account with a reputable trading company which you open by filling out a registration form online. After creating an account, you should activate it by adding funds. Some platforms accept fund transfers via debit cards, credit cards, and wireless transfers.
Investing in cryptocurrency is a risky venture like most ventures in the financial market. You should only invest what you can afford to lose and study the market trends before choosing a currency to invest in. Risk management strategies offered by trading experts will help you minimize the risk through frequent updates. Read more about how to start investing in cryptocurrency and earn passive income here.
Bottomline
Making passive income by investing in the crypto market is achievable. You only need to study the available investment options and select one that suits your daily routine and the capital you have. Read more on the tips for investing in cryptocurrency and start your investment when ready.
