With 2022 just around the corner, you may have set big goals for yourself in the new year. The dream for many is to earn passive income while working and even to stop working as a laborer if possible. Cryptocurrency would be a great opportunity to start building a passive income in 2022. In this article, we will give you some tips.
How to earn passive income through cryptocurrencies
Passive income is when you stop exchanging time for money and achieve money for money. There are many ways to make passive income, and investing in cryptocurrencies is a particularly attractive option.
In the cryptocurrency space, you can start your passive income in different ways. You can make money through price gains. You can get rich by gambling, making money through loans, or earning your own income through NFT. It is best to combine different methods to get the best results. Let’s discuss each method separately.
The easiest and most popular method is to invest in cryptocurrencies. You can get high returns by investing in Bitcoin, Ether, XRP, and other tokens. This strategy is similar to investing in the stock market. On average, the returns on cryptocurrencies are much higher. In contrast, cryptocurrencies are much riskier.
Whether you can build a regular passive income from cryptocurrency investments also depends on market conditions. In a bull market, you will get high returns, while in a bear market, this will become more difficult. On the other hand, there is no guarantee of a fixed income (e.g., monthly).
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If you are looking for a regular source of income, pledging may help. Proof of stake refers to the ability to reach a consensus on specific blockchain networks. It is considered a more efficient way to reach consensus on the blockchain than the classic proof of work used by Bitcoin. Through pledging, small investors can participate in this consensus process and thus earn interest.
Pledging is an excellent way to earn passive income using cryptocurrencies. The interest mentioned here is called a “pledge reward” and is paid to you as a reward in the form of a corresponding coin. This only applies to certain cryptocurrencies. For more information on pledging, you can refer to our previous article on the subject.
Crypto lending is also a way to earn passive income using cryptocurrencies. You lend cryptocurrency to other people and earn interest in it. However, it is important to do your research well in order to lend cryptocurrencies, as crypto loans carry a higher risk of loss than pledges.
A better option for making money from cryptocurrencies may be NFTs, which are “irreplaceable tokens,” a digital, unique, and unrepeatable piece of work. Most importantly, NFT revolutionized the art market in 2021. There is now a huge collection of NFT digital artwork that you can buy, sell, and trade on platforms like OpenSea.
You can create your own NFTs and then sell them on the NFT platform. The above platforms apply. Raible is an NFT platform designed for artists. Meanwhile, individual NFTs have achieved six-figure revenues.
The metaverse was the big topic in the crypto market in the fourth quarter of last year. It describes a virtual space in which people can communicate with each other. There are now many blockchain-based metaverses. In this metaverse, you can earn rewards in the form of cryptocurrency or NFT through P2E games.
Some of the best-known games include Axie Infinity, where you can raise digital pets (Axis) and fight with them, and Decentraland, where you can buy digital land and real estate. Digital land, in particular, can generate passive income for you in the future.
Building a passive income with cryptocurrencies is not that difficult. You have to realize that it will take a while and that your passive income may not be a lot at first. In addition, there is always some risk associated with cryptocurrencies.
You can buy cryptocurrencies on Binance, Coinbase, Kraken, and Bitfinex crypto exchanges.
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