THE DIFFERENT WAYS YOU CAN ACTUALY EARN YIELD ON YOUR CRYPTO HOLDINGS
There have been a number of influential individuals that have publicly stated that Bitcoin and other Cryptocurrencies produce nothing! Warren Buffet is one such individual who has made this claim. The truth be known, he couldn’t be more wrong, especially since the arrival of covid19! Many investors have always looked to the property market, in order to secure stable and consistent income generation. When the property market is operating as it should, an investor hopes to see between 8% and 10% per year.
By utilizing DeFi, investors can earn that type of return within a month. DeFi can be very risky though, so ensure that you study up on the risks involved. There are however less riskier options that generally yield anywhere between 4% and 12% per year, which is still pretty decent. Let’s dive in and take a look at some of these opportunities!
CEFI & THE OPTIONS ON OFFER
We will take a look at CeFi opportunities first, as many consider this avenue the least risky. Centralized finance (CeFi) platforms have been operating within the Crypto space for some time now. There are a number of companies that have really gained the respect and trust of the Crypto community.
CELSIUS – THE INDUSTRY LEADER (CAUTION: CELSIUS IS CURRENTLY UNDER RESTRUCTURING)
The most prominent being Celsius, which is headed up by CEO, Alex Mashinsky. Celsius has some really great interest bearing accounts on offer. Currently, the annual return on BTC deposits of 1 BTC or less is 6.2%! This is significantly higher than the market average of approximately 4.5%.
Interest is paid out weekly, which gives a bit of an edge to the compounding of earnings over time. Interest can also be received in the Celsius (CEL) token, or in the currency of deposit.
BLOCKFI & OTHER GREAT ALTERNATIVES
BlockFi is another similar service that is still fairly competitive. Interest is however paid monthly on the 1st of every month, unless the day falls on a weekend or public holiday. One feature that I really enjoy about BlockFi is the ability to set all interest earnings to BTC, or any other coin that they service. In other words, you could provide a stablecoin, which earns 8% and have that paid out in BTC!
This is a great way to passively earn some extra satoshis! Hodlnaut is another fairly popular option, however there are not that many assets available at this stage. The interest rates in general are very good and a lot of users are currently shifting over to explore their services.
It is important to note that all of these CeFi platforms will require KYC as they are financial institutions in the traditional sense. Another firm favorite is Nexo! A lot of Celsius and BlockFi users have migrated portions of their investments over to Nexo, largely due to the increased earnings available. Nexo is unique in that interest payments are paid out daily! It makes sense then that users will spread their Crypto between the best services available, in order to maximize benefits.
Another benefit to utilizing multiple platforms as apposed to only one, is the diversification of risk. This is always a good move and makes a lot of sense, especially if your holdings are rather significant.
Staking has become a very broad term when it comes to Crypto. The term was originally born out of a process associated with proof of stake (POS) coins. Proof of stake coins reward holders for “staking” their coins, as a way to secure the network. This is an alternative to the traditional proof of work technology that powers coins like Bitcoin and Litecoin.
Today, there are coins that can be staked to earn yield that are not necessarily proof of stake coins. In essence, this is more a case of lending, rather than staking. Proof of stake coins can sometimes be staked within your own wallet, while other times, a third party platform is required.
Mycointainer is one of the most well respected staking platforms, with an extensive list of staking options. Most top quality staking coins are available, as well as other smaller staking projects. StackOfStake is another platform that enables users to stake coins like UBX, which would usually require a minimum stake of 1 million UBX when staked via the official UBX staking protocol.
These platforms remove barriers of entry and simplify the staking process for users who would like to avoid the complexities of staking, or who simply are unaware of the procedures involved. Staking coins can be highly profitable, especially if you manage to acquire your coins prior to large price surges.
DEFI – NOT FOR THE FAINT OF HEART
DeFi is most definitely the most rewarding avenue when it comes to earning yield on your Crypto holdings. The risks are however much larger, in relation to the avenues previously mentioned. To learn more about DeFi, please visit the DEFI/DEX page.
As with any investment, diversification is key to protecting your assets. Please do your own research prior to any investment decisions. This is by no means investment advice.