Hello everyone 👋!!!
When we think about options to invest our money, one of the first things that may come to mind is passive income. But how does this investment type work in the cryptocurrency world? Why should we be interested in passive incomes using cryptocurrencies? Is it safe? where can we invest? We'll answer all these questions below, but remember:
This is the second post in a series focused on talking about some of the most important concepts in the world of cryptocurrencies. If you haven't read the first post yet and don't want to miss anything, I invite you to read A beginner's guide to crypto investment strategies first.
WARNING
The content that will be next shared is pure informative based on my analysis and opinion. If Passive income is of your interest, you should investigate them further.
Why should we be interested in passive incomes using cryptocurrencies?
One of the ways to generate passive income with traditional banking entities is the Certificate of Deposit (CD), this in countries like Colombia, this can generate profits between 6 and 7.25% interest, a little more than the inflation of 5.62% that this country had for 2021, so we could say that in this case, the traditional CD only serves to avoid losing money due to inflation. Passive income with cryptocurrencies can generate returns of more than 15%, which means that we can actually generate income with our savings.
Anything to keep in mind before investing passive income?
Passive income with cryptocurrencies can be attractive, however, we should at least consider the following information:
- The currency selected to make the investment: if we want to have a more controlled environment, the best thing we can do is invest using stablecoins, since the investments depend on the fluctuation of the selected currency.
- Find a reliable platform to invest in: in the crypto world there are many projects whose goal is to scam, before investing, we must verify that the platform that we select is reliable.
Some ways to generate passive income
Crypto lending
Also known as crypto loans, it is a type of financial relationship between two parts: the lender and the borrower (the debtor). It consists of the temporary delivery of money or properties to another person or entity in order to make a certain investment, with the commitment to get a reimbursement with their respective interest. Some platforms where we can do Crypto lending are Blockfi, Celsius Network, and Youhodler.
Staking
It is defined as "Guarantee Funds", it is a saving system in which the owner has his cryptocurrencies in a wallet or smart contract, obtaining a percentage of passive guarantees, just for keeping them stored there*.* One option for stacking is Binance Savings.
Trading Bot
It consists of computer programs created to define the purchase or sale of currencies at a given moment. Some of these are: Bitsgap y Pionex.
Copy trading
This investment method is based on copying the investments made by an experienced trader. Normally we have the chance to copy the operations automatically or manually.
When a trader allows others to copy their own investment strategies, they receive rewards for the profits generated.
⚠️ Remember that before starting with cryptocurrency investment, it is necessary to make a deep study of the projects that concern them.
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