Buying and selling digital assets is far from the only way to make money on the crypto market. Experts explained how to diversify your portfolio and get more profit
Over the past month, Bitcoin has risen in price by 1.5 times. The cost of the first cryptocurrency on the morning of August 23, for the first time since mid-May, exceeded $ 50 thousand. Investors who bought bitcoin at $ 30 thousand per coin in May, June and July have already managed to get almost 67% of the profit. But buying cryptocurrency isn't the only way to generate income from digital assets.
Landing page is a way of passive earnings, which involves the temporary transfer of cryptocurrency at interest. A crypto investor lends either to exchanges (and due to this they increase liquidity), or to individuals. The transferred funds are blocked in the smart contract.
For example, on Binance, the largest cryptocurrency exchange in terms of trading volume, there are two types of landing pages:
- Perpetual contract. It has a low interest rate, but funds from such a contract can be withdrawn or added at any time;
- Fixed contract. Usually set for a certain period of time (10, 15, 30 days, etc.). Has a higher interest rate. Funds from such a contract cannot be withdrawn before its expiration.
Binance users have the option to invest cryptocurrency in a perpetual contract using USDT stablecoins. The interest rate on such a deposit will be 1.2% per annum. Higher interest rate – 3.3% per annum for the 1Inch token perpetual contract.
Axie Infinity Fixed Token Contract (AXS) offers 15% per annum. But the funds invested in the contract will not be available for 14 days. Perpetual landing page in USDT stablecoins at 9.3% per annum is available on the BlockFI decentralized platform. The Celsius Landing Platform provides a fixed contract for Ethereum at 5.3%.
Staking is a way of passive earnings in which users store coins on the Proof of Stake (PoS) algorithm, ensuring the health of the blockchain. This gives the holders the right to profit. This option is only available to cryptocurrencies that run on PoS, such as EOS, Tezos, TRON and Cosmos.
The point of staking is to ensure all operations on the blockchain and support the network. For this, holders of digital coins receive a reward. The more tokens a holder has, the more likely he is to become the creator of a new block.
The use of staking depends on the investor's strategy, explained Nikita Zuborev, senior analyst at Bestchange.ru. According to him, if the holder of an asset is willing to put up with the inability to sell it for a long time, then staking will become an additional source of income.
“In medium and long-term strategies, you can receive additional funds for your open positions, which looks very interesting against the background of the traditional financial market. This strategy turns the purchase of altcoins into an alternative to bonds, with their accumulated coupon yield, ”the analyst noted.
According to Zuborev, staking can bring in from 3% to 15% per annum. The most promising for staking are tokens that have a medium-term trend towards an increase in the rate, otherwise the additional emission of coins will not even help cover the exchange rate difference, the expert says. Therefore, first of all, you need to pay attention not to the staking percentage, but to the stability of the growth trend in the value of the token, he added.
The most interesting tokens for staking can be: EOS (EOS), Stellar (XLM), Cardano (ADA), TRON (TRX) and Tezos (XTZ), Zuborev said.
“Staking can be called a full-fledged alternative to bank deposits or bonds. This is a conservative tool that, in some strategies, allows to reduce risks, ”the analyst emphasized.
According to him, the risk depends on the choice of the asset class and the type of blocking of funds. For example, staking volatile altcoins with a fixed lock for a long time will have the maximum risk, while staking stablecoins with a flexible lock will be minimal, the expert added.
EOS staking is available on the Binance exchange for 30, 60 and 90 days. Staking returns are 4.2%, 4.6% and 6.1%, respectively. Crypto exchange Huobi Global offers TRON (TRX) staking at 7% per annum. Cosmos (ATOM) staking is available on Coinbase with an interest rate of 5% per annum.
If an investor does not have experience in working with cryptoassets, but wants to start making money on them, then the best solution would be to use cryptocurrency funds, says Maria Stankevich, Development Director of the EXMO crypto exchange. According to her, when working with a fund, key risks are negotiated in advance and an investor can be more calm about his funds than if he buys cryptocurrency on his own.
“An interesting fact is that if a novice client says that he is ready to take the maximum risk and wants super profits, he is always offered a low-risk or medium-risk strategy, since such clients usually do not realize the full danger of high risks,” the expert explained.
Pantera Capital, Bitcoin Investments Trust and Blockchain Capital are considered the most promising cryptocurrency funds, Stankevich noted, but they are more focused on large investors. There are also reputable funds for retail investors, the expert added.
When choosing a crypto fund, Stankevich recommends that you study its reputation in the market and work history in order to protect yourself from scammers.