The cryptocurrency market is known for its volatility as evidenced by Bitcoin’s extreme price swings. Earlier in the year, Bitcoin peaked at its all-time high of $63,729.50 but soon dipped to unprecedented levels, with the lowest price at $29,726 amidst the market crash in May. The price has recently seen bullish returns, which may be due to the increase in adoption worldwide, with companies like Amazon and Walmart seeking to hire cryptocurrency experts.
As such, investing in cryptocurrencies may be an emotional rollercoaster. However, there are a handful of ways to help investors make the most out of their crypto assets. Such methods are also great as they help mitigate the negative repercussions of market volatility and eventually capitalize on long-term gains.
If you have invested a portion of your assets into cryptocurrency and are looking for ways to maximize its productivity, we share three tips to help you do so.
3 Tips to Start Making the Most From Your Crypto Assets
1. Deposit your Crypto Assets in an Interest-Earning Account
Similar to depositing your cash into bank accounts to earn interest, parking your funds into crypto interest accounts is a great way to earn compound interest consistently. There are a number of such platforms that provide this service for crypto investors to earn passively. This includes Hodlnaut, which offers users up to 12.73% APY on any of its supported cryptocurrencies.
Moreover, it’s a great way to hedge against market decline since investors would still be earning interest from their crypto assets. The best part about such platforms is that they offer high-interest rates as compared to those of banks for your deposited currencies. And yes, this interest is compounded.
Here’s a quick breakdown to get a clearer understanding.
A user deposits $1,000 worth of crypto into an interest-earning account that offers 12% annual interest. In the first year, he would earn $120 in interest, giving him a new balance of $1,120. Since the interest is compounded, he would earn 12% on $1,120 in the second year. This larger balance includes both the amount deposited, as well as the additional 12% interest from the initial year.
The compounded interest will allow crypto investors to accelerate the growth of their crypto investment assets over time.
2. Become an Affiliate Partner
If you have parked some of your funds into a crypto interest or lending platform, chances are, they would have an affiliate program. In order for you to join an affiliate program, you would likely have to be an active user on their platform by depositing your funds.
Once you have joined the program, you would receive your unique referral link. You can then start to post about the products and services of the company on your social media accounts or personal websites to encourage your followers to sign up for an account. You will then receive commissions for users that sign up with your referral link. The amount of commission you receive varies depending on the company you are pegged to.
The upside here is that you don’t have to just be an affiliate partner for one platform. You can diversify your crypto assets and store them on multiple platforms to join the different affiliate programs. You will get the bonus of earning interest consistently while being able to earn commissions from the various affiliate programs.
Even if you don’t have a huge amount of followers on your social media accounts, you can always share your unique referral link with friends and family members. By sharing your link, you would be encouraging them to form a passive income stream by earning interest on their crypto assets. This allows them to maximize the productivity of their crypto earnings, which is a great way to earn without having to actively manage your portfolio.
If you have a huge number of followers and a decent network, this method is definitely ideal. All you would need to do is to share your link on your personal social media platforms and encourage your followers to sign up.
3. Staking and Lending
Staking refers to the process of validating crypto transactions on a Proof-of-Stake (PoS) network. On such blockchains, anyone who has a minimum-required balance of a specific cryptocurrency can help to validate transactions and earn staking rewards.
Staking coins would mean that you won’t actually be spending them. Instead, your coins are locked in a cryptocurrency wallet, where the PoS network uses them to validate transactions. This allows the network to maintain security and integrity when verifying transactions. And since individuals lend out their coins to the network, they get rewarded by it.
The Proof-of-Stake algorithm then chooses transaction validators based on the number of coins each individual staked. Moreover, most cryptocurrency exchanges allow users to stake their coins. Such exchanges include Coinbase, Binance, and Kraken.
Instead of just keeping your crypto assets untouched and waiting for prices to appreciate, it might be a smart move to find ways to help maximize – and monetize – your crypto holdings. This way, you know you’ll still be receiving consistent returns even during a market downturn. Plus, you don’t have to be actively involved in any of these processes and you would still be able to earn more while going about your day-to-day activities.