5 types of passive income from cryptocurrencies

People’s interest in cryptocurrencies is growing every year, and the same goes for platforms where they can be traded. This is not surprising: experienced traders earn significant amounts of money from this every day. However, trading is a skilled job that requires specific knowledge and abilities. You need to analyse the market and its indicators and develop trading strategies — all of which can be quite complicated.

Fortunately, there are simpler options. We will explain passive ways to earn money from cryptocurrency that do not require special training and may be particularly appealing to novice investors.

The high volatility of this market creates opportunities for quick earnings for everyone, even inexperienced investors. They too can earn passive income from cryptocurrencies without making any special effort. Here are the tools that make this possible.

Trading bots

Trading bots are programs that monitor the market around the clock and automatically execute trades on behalf of the user. They scan the market using various indicators and make decisions about entering or exiting positions based on their configuration. Their goal is the same as that of any trader: to buy cryptocurrencies at a lower price and sell them at a higher one.

Bots come in different types. Some modern programs offer flexible settings that can be tailored to your own trading strategies. More complex options, such as scripted trading robot templates, are suitable for traders familiar with programming. These use open-source code that can be edited to meet individual needs. Such fine-tuning can bring you closer to the desired results, but it is generally not suitable for novice investors.

For beginners, there are easier-to-use yet effective trading bots with minimal settings. These allow all investors, regardless of experience, to earn money. An example is the trading grid bot built into the Bybit crypto exchange ecosystem, which uses a grid trading strategy. Its principle is simple: regularly buy an asset at predetermined prices and sell it once the price rises.

Here’s how it works. You can configure the bot to place buy orders for Litecoin, for instance, every $10 below its current price and sell orders every $10 above it. This creates a grid of orders with gradually increasing or decreasing prices. The bot automatically buys the coin whenever its price reaches the desired level and sells it when it rises. After a simple setup, the system handles the routine work of placing buy and sell orders, freeing the trader from this task. For those also exploring online platforms, logging in via Stay Casino login can provide access to crypto-related games and tools that complement trading strategies.

Copy trading

Copy trading allows you to replicate the trades of more experienced and successful traders, known as “masters.” In other words, beginners can earn money by leveraging the knowledge and skills of those who have already gained experience and proven themselves with consistent results.

This arrangement benefits all participants. Masters earn a percentage of the profits generated by each of their subscribers, in addition to their own trading profits. They also gain credibility on the exchange, which helps advertise their trading strategies. Therefore, it is in their interest to maximise earnings for both themselves and their subscribers to maintain satisfaction and trust.

Subscribers, aside from the financial benefits, gain the opportunity to learn by observing their more experienced peers. This motivates them and allows them to understand the intricacies of trading without “hitting their own bumps.”

Only verified and successful traders can become masters. For example, on Bybit, a trader must pass KYC verification before applying to become a master. The exchange also checks the percentage of successful trades — at least 60% over the past two weeks. This prevents unqualified individuals from becoming masters and potentially disappointing their subscribers.

All relevant information about masters is updated daily on Bybit (and some data hourly) and presented in a clear, easy-to-read format, including:

• Number of days trading as a master
• Number of profitable trades over the last 7 and 21 days
• Subscribers’ profits over the last 7 and 21 days
• Number of subscribers
• Total number of trades

This information is sufficient to choose a reliable master. While past success does not guarantee future profitability, the figures provide a clear indication of the master’s qualifications. Subscribers should still be aware of the risks involved, but these metrics help make informed decisions.

Staking

Staking is an alternative method of earning cryptocurrency, different from the well-known approach of mining. Mining is used for currencies that operate on the proof-of-work (PoW) protocol, where coins are generated through complex mathematical calculations using computer power — examples include Bitcoin, Ethereum, and many others. The main drawback of mining is the need to purchase expensive equipment and maintain mining farms, which require constant supervision, troubleshooting, and fire safety measures, as mining is an energy-intensive activity.

Staking, on the other hand, is used for currencies created on the proof-of-stake (PoS) protocol. Popular PoS coins include Solana and Cardano. With PoS, rewards are not earned by solving mathematical problems but by holding coins in a wallet. To receive staking rewards, assets are fully or partially locked in a liquidity pool, encouraging participants to engage in staking and helping to maintain the blockchain’s performance.

The main advantage of staking is that it does not require significant initial investments in computing power, which quickly becomes obsolete and illiquid. Staking is largely automated: users do not need to intervene in the process. Their only task is to monitor the accrual of income to their wallet.

Investors can join staking pools directly through the project, via crypto exchanges, or through market makers.

Of course, staking carries certain risks. The primary risk is a possible drop in the price of the staked currency. To reduce this risk, it is better to choose a coin with low volatility that demonstrates stable growth rather than dramatic fluctuations. Highly volatile coins can pose a problem during staking, as a sharp price decline could prevent the investor from selling even if the drop is noticed early.

Crypto lending

Crypto lending is another type of passive income from cryptocurrencies, similar to a bank deposit. The principle is simple: the cryptocurrency owner lends their funds and earns interest. This can be done through an intermediary, such as crypto exchanges or dedicated lending platforms, or directly via P2P platforms.

The safest option is considered to be lending to exchanges, which then lend these funds to users trading with leverage. The repayment is guaranteed by the trader’s deposit used as collateral, so the investor providing the crypto does not risk losing it.

All the investor needs to do is register on the platform and deposit their funds. After that, the coins work automatically, and the investor only needs to monitor income accrual.

The amount of interest earned depends on the platform. Centralised cryptocurrency exchanges typically offer the highest rates, up to 45% per year. Crypto lending platforms can provide returns of up to 20%. On P2P platforms, the borrower sets the rate and terms, allowing for flexible income opportunities.

Holding

The name of this passive income method speaks for itself. Holding involves purchasing an asset for the long term and keeping it until its value rises significantly compared to the purchase price. The key principle is not to be influenced by short-term or even medium-term fluctuations in the coin’s price.

A classic example of holding is investing in Bitcoin. For instance, between late November and early December 2021, when Bitcoin reached its peak of $67,800, many long-term investors sold coins they had held for 7–8 years, resulting in returns that increased their investments many times over.

The main risk of holding is selecting the wrong asset. If the chosen coin fails to grow in value relative to fiat currencies or other cryptocurrencies, the investor may incur a loss. This risk can be reduced by diversifying investments across several currencies — forming a portfolio. In this way, declines in some coins can be offset by gains in others.

Conclusion

Cryptocurrency offers virtually limitless earning opportunities for investors of all levels, regardless of knowledge, experience, or financial capacity. If you are a “trading guru” with a keen sense of the market, you can earn independently or offer your skills as a “master” on an exchange. For those still learning to trade or lacking the time for active trading, there are also passive ways to earn. These methods require no direct involvement from the investor while still allowing you to claim a share of the profits in this modern and dynamic market.

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