What do you think, is there any crypto passive income strategy?
Well, You can earn profit from crypto not only by buying and selling it but also by using it to generate passive income, as you can with many other investments.
You can earn money on your assets without actively participating in them when you earn passive income. In the traditional financial world, the concept is similar to compounding interest or reinvesting dividends, or earning rent on investment properties.
You’ll learn how to earn passive cryptocurrency income in this blog.
Let’s first learn, What’s Compounding?
Compounding is the process of an asset’s value increasing as a result of interest earned on both the principal and accumulated interest. Compound interest is a phenomenon that is a direct manifestation of the time value of money (TMV) concept.
Benefits of the Power of Compounding
The value of time is one of the most significant advantages of compounding for investors. You may earn returns over time, and the yields on these returns may help you generate additional returns, allowing you to quickly increase your investments. It’s a good idea to save money and earn compound interest each year.
What if you invested a set amount each month, or better yet, divided the total amount into weeks?
This small step can help you earn more money in the long run. Your returns may accumulate at a much faster rate if you invest regularly over time.
Still, want to know more about compounding benefits? Connect with team Carret now.
Why Does Compounding Work so Well in Crypto?
For large annual yields, investors can easily stake and earn compounds on select coins. However, it is critical to remember that cryptocurrency, like any other investment asset, carries risks. More importantly, you cannot guarantee that the value of your coins will not depreciate. When it comes to diving into the crypto ecosystem, you must be aware of the market’s volatility and conduct your research.
One of the main reasons why compounding works so well for crypto assets is because of market volatility. If you put the passive income from your base investments in your wallet, that can become your set wallet balance for regular investing.
The best solution is to set up an automated crypto investing module. Consider Carret’s Crypto Investment Plan or CIP!
What’s Crypto Investment Plan or CIP?
CIP, or Crypto Investment Plan, is an automated investment strategy that eliminates the risk of making a bad decision. All you have to do now is decide how much you want to invest weekly in Bitcoin or other crypto tokens. Not only that, but you can buy multiple CIPs for a single coin!
The benefits of CIP are:
- Rupee-Cost Averaging: CIP reduces the risk of market volatility over time. You buy less of your crypto assets through CIP when the markets are high. You buy more quantities for the same price when the markets are down.
- Compounding: CIP instalments are designed to help you build wealth over time. Your earnings are re-invested, allowing you to reap the benefits of compounding.
- Discipline: CIP instalments are made on a set schedule, such as weekly on a set day.
- Convenience: CIP is a painless process because the funds are automatically deducted from an individual’s account and invested in the scheme of the investor’s choosing.
- No lock-in period: You can keep paying your CIP instalments for as long as you want and cancel whenever you want. But for best return plan for long term investment.
How Can You Make Passive Income with Crypto?
It is possible to make passive income with cryptocurrency, but the results will vary depending on the method used and the amount of cryptocurrency available, to begin with. There’s no guarantee that any crypto strategy will produce any returns due to the volatility.
Those with large amounts of cryptocurrency, however, have several options for generating income with it. It’s up to you to weigh the risks of attempting to earn a yield on their cryptocurrency, as well as the potential rewards, against the risk/reward ratio of simply holding for long-term gains, or cashing out some or all of your holdings.
Proof-of-stake (PoS) staking:
Staking is the process of lending tokens to a network in exchange for the network’s ability to validate transactions. This is more efficient than mining, but it has the potential to be dangerous. Before a person can start staking, most networks require a minimum investment.
Interest-Bearing Digital Asset Accounts:
Several services allow users to deposit their crypto and earn a return on it, similar to how they would with a savings account. Because traditional cash savings account yields have fallen so low in recent years, this has become an appealing product for investors.
Tokenized stocks are cryptocurrencies that are backed by a company’s stock. Occasionally, these tokens offer dividend payouts in the same way that shareholders do. Dividends are usually paid out every three months.
Mining proof-of-work cryptocurrencies necessitate a significant investment in computing hardware as well as technical expertise. Contracts for cloud mining provide an alternative.
Why Interest Is An Important Part Of Passive Income For Crypto Investors?
Crypto investments can now be used to earn passive income through centralised finance (CeFi) institutions. This is accomplished by paying interest on deposits held at the institution. The process of earning interest on cryptocurrency holdings is similar to earning interest on fiat currencies.
When you deposit money (in US dollars) into a high-yield savings account at a bank, you can expect to receive a yield of around 1% per year. Your money is put to good use by the bank, which lends it to qualified borrowers. On the money you earn, you earn a small amount of interest. The bank also profits from the spread.
On your crypto deposits, you can earn up to 17% annual percentage yield (APY) with 24Carret, India’s first crypto savings account. You can start investing right now with as low as 100INR. Hold your crypto and earn interest on it as passive income.