Many people purchase cryptocurrency for their use, but others buy it as an investment. You should consider ways to earn interest in your cryptocurrency if you don’t plan on spending it. While you can actively participate in making interest, experts will deliver better results.
How can you earn interest on crypto?
There are many ways to earn interest in cryptocurrency. If you want to make it easy, lending cryptocurrency and charging interest to the borrower is the best option. This can be done via peer-to-peer transactions or through a website that facilitates them.
Trading cryptocurrency can earn you interest, but you must monitor the markets. Arbitrage is another option.
However, all of these require that you put in a lot of effort. It is best to use a platform that allows you to earn interest. You can do this via a managed cryptocurrency account or crypto savings account. These platforms will earn interest with your crypto and pass most of it onto you.
What are the current interest rates?
CoinMarketCap reports that the current interest rates on Bitcoin range from 0.50% to 10.0%. The rates for Ethereum range from 0.01% up to 10.40%.
How to earn interest on cryptocurrency
Register for a Crypto Account
You will need to open an account on a platform to start earning interest on your crypto holdings. You can get new and stable coins as you want by creating a KuCoin account. In the same way, miners earn crypto, and validators can stake KuCoin on its proof-of-stake network.
If you are new to cryptocurrency and want to earn interest, the KuCoin crypto exchange is the best option. To purchase cryptocurrency with cash, you can link your KuCoin account to your bank account. You can currently get the best annual interest, compounded monthly depending on your cryptocurrency.
Compare interest rates
The platform’s website lets you see the interest rates you will earn on various cryptocurrencies. The interest rate you earn on different cryptocurrencies will vary depending on whether the company takes a cut.
These savings accounts have floating interest rates. There is usually a floating interest rate on these savings accounts. This means they can change continuously according to the demand and supply of crypto loans. Leveraged investors and exchanges offering leverage on their platforms often demand cryptocurrency loans.
The best interest rate for stablecoins is usually between 6% and 9%. KuCoin offers a high rate of interest on stablecoins at 12% annually. Cryptocurrency interest rates can be much higher, sometimes exceeding 100%.
These high-interest rates are not a sign of high crypto inflation rates or highly leveraged positions. Crypto price rates higher than 25% are not recommended for anyone new to cryptocurrency.
You can add cryptocurrencies to your portfolio.
You can fund your account via many platforms that allow you to earn interest. Websites like KuCoin or Coinbase let you purchase crypto directly from your bank account. If you don’t have cryptocurrencies, earning interest is simple.
If you open an account on a platform that accepts cryptocurrency deposits, you must create an account with a cryptocurrency exchange. Coinbase, KuCoin, eToro, and Gemini are all popular options for cryptocurrency exchanges. After purchasing crypto via one of these exchanges, you can send your funds directly to the address you use to store crypto on the platform you are interested in.
Earn interest
After you have added funds to your interest-bearing bank account, you will start earning interest. Relax and watch your crypto holdings grow. Cryptocurrency investors who believe that Bitcoin and other cryptos will continue to rise in value are particularly attracted to investing in it.
Because of the potential for exponential growth on a crypto account, this is possible. If you invest $30,000 in bitcoin at the start of the year, you will earn twice as much interest on a $60,000 Bitcoin. This is in addition to the 7% interest you get on a $60,000 Bitcoin is twice the interest earned from your initial investment.
Investors can earn interest on Bitcoin, Ethereum, and Litecoin. These accounts pay interest in the form of the cryptocurrency you have in your interest-bearing account. This allows you to keep your exposure in any crypto market you choose.
Some interest-bearing cryptocurrency investments may be attractive to risk-averse investors. Some platforms offer stablecoin savings accounts — these cryptocurrencies can be pegged to another asset such as the U.S. Dollar.
There are pros and cons to earning interest on cryptocurrency
The crypto’s competitive interest rates are a clear advantage to earning interest. Savings accounts that yield 7% interest are rare in traditional finance, but companies can offer higher interest rates by cutting overhead costs using a blockchain.
Here are the main pros and cons of cryptocurrency investing:
Pros of earning interest on Crypto
- Crypto funds can be locked up for a very short time or at all
- With the appreciation of your crypto asset, interest grows
- There is no minimum balance required to open an interest-bearing bank account
Cons of Earning Interest in Crypto
- The long-term interest rate is not guaranteed to remain high at floating rates.
- Your earned interest and capital will also decrease if your cryptocurrency depreciates.
- Scams are more common because of this industry’s lack of regulatory oversight.
