How to Earn Passive Income With Cryptocurrencies in 2021

6 mins
26 March 2021, 13:07 GMT+0000
Updated by Ryan Glenn
9 January 2023, 18:19 GMT+0000

Want to earn passive income crypto? Many people use cryptocurrencies as an extension of their traditional investments. Historically, investors have diversified via the stock market, precious metals, and more; all of these investments are made with the intent to generate passive income. Now, cryptocurrencies are becoming a normal part of that batch.

Whether you’ve been in the investment game for a while now, or if you’re just getting started, know that there are many ways to earn passive income cryptocurrency. In this post, we’re going to break down each method to help you get started as soon as possible.


The number one way to get started earning passive income with cryptocurrencies is to simply invest. If you buy a cryptocurrency at a low price, and then it goes up over time, that’s passive income.

Some investors diversify into multiple cryptocurrencies, profiting off of Bitcoin as well as altcoins. This is the easiest way to get involved. Simply buy and plan for the best.

From here, many investors claim it’s best to hold. After all, the crypto space is considered by many to be quite nascent.

Experts and financiers claim there’s a long way to go before these assets hit their peak. If that logic is to be followed, now is a fantastic time to invest and hold for a while.


Binance Staking Masternode

Staking is a newer passive income method in the world of cryptocurrency, but it’s a pretty easy way to get started. Some blockchain networks are built on a proof-of-stake consensus method, meaning that blocks are verified by dedicated users of the network, rather than mining through proof-of-work.

To become one of these users, you must stake, or “lock-in” the network’s cryptocurrency.

Each blockchain has its own minimum threshold of staking as well. Meeting those requirements ensures you become a validator – the network is trusting you to verify transactions.

All you need to do from here is leave your computer on and connected to the network, as well as hold your staked funds in the network’s wallet. By doing so, you earn rewards.

The more you stake, the more you earn! On top of this, staking is much better for the environment than mining, so you’re doing good for the planet as well. Eventually, many blockchain networks will make the shift to proof-of-stake.


Aave LEND Token passive income crypto

Staking and lending platforms are part of the decentralized finance wave – the moving of traditional finance to blockchain networks.

With a traditional bank, your funds are lent out to others in the form of loans.

You earn interest as a result of this, but a small rate decided by the bank. On a DeFi lending platform, you can also stake your assets and earn interest in the form of the network’s token. Also, since there’s no need for a third party, you can see anywhere from a 5%-15% increase compared to traditional rates.

That, and you can make your own loans on the side, alongside your staked assets being loaned out automatically.

Essentially, you can profit on interest from the platform’s lending as well as with your own loans. In return, the platform sees an increase in value for their token. It’s a win-win situation!

Cloud Mining

mine one bitcoin

If you can’t or don’t want to commit to a physical mining setup, you can always participate in cloud mining. It is an excellent way to earn passive income with crypto.

Cloud mining is the act of putting money toward a cloud mining company. In turn, that company uses those funds toward their physical mining establishment.

When it earns rewards, you are provided with your fair share in whichever cryptocurrency they support.

The process is quite simple, and requires less of an upfront cost than traditional mining. However, it’s worth noting that you won’t get all of the rewards you normally would if you were mining yourself. For some investors, this isn’t a great deal. For others, it’s the only way to get involved.

One great cloud mining service is StormGain’s cloud mining platform. The platform allows you to mine without procuring any mining equipment, battery or CPU. It’s fast and risk-free.



This might sound weird, but it’s totally possible to earn passive cryptocurrency income by playing games on the Ethereum blockchain network, as well as other dApp supporting networks.

There are tons of collectible-style games that have you invest in a character, use it in-game so it inherits value, and sell it off later on.

While this does require some amount of effort, one could argue playing a game is fun and the income it would generate is passive. You’re not putting in more money to make money – it just requires that initial investment.

Some games you don’t have to put much time in at all, and the asset will grow by itself. Do some research and find the blockchain-based dApp that works for you. Maybe you could earn passive crypto income from your playtime!

What Other Factors Affect my Crypto Passive Income?

passive income crypto

While the above ways are all fantastic methods to earn passive income crypto, there are other factors that affect your earnings. Many of these are out of your control, but you can play it smart to maximize your returns regardless.

a.) Difficulty

As blockchain networks grow larger, and more assets are put into circulation, it becomes more difficult to mine blocks and earn rewards. This increase in challenge is by design, and it ensures a cryptocurrency’s value by making it hard to come by.

Remember, the value of cryptocurrency is based on the work put into it. Whether this is via mining or staking, that effort is what makes these assets worth something.

b.) Accessibility

Accessibility means a couple of things. For example, how easy is it for you to acquire mining equipment, or to stake a required amount of funds? Are you able to afford a cloud mining provider, or even support yourself with higher electricity bills?

There’s also the issue of time. You must commit a lot of time to earn passive income in cryptocurrency. Sometimes that simply involves waiting. Other times it means searching for the best platforms that fit your funds and investment personality.

c.) Reinvestment Policy

Are you willing to reinvest your earnings to make even more of a passive income? A large part of having your money make you money is reinvestment. It’s not pulling your profits right as you make them.

If you’re mining, for instance, you should reinvest your rewards into better mining equipment. Over time, this will ensure you can make even more of a passive income.

There’s certainly a time where you can withdraw your profits and enjoy the fruits of your passive labor, but that moment must be carefully considered. Otherwise, your attempt at passive income won’t go nearly as well as you’d hope.

d.) Risk

Finally, there’s the risk factor involved with cryptocurrencies. Depending on your method of generating passive income, you’ll definitely have to manage some sort of risk.

No matter which asset you pick, there’s always the risk of it crashing hard or losing some significant value – sometimes overnight! This is especially relevant in the investing and holding section of generating passive income.

There is always the possibility of you losing your entire investment. It’s important to do research and keep an eye on the markets you invest within, even if you’re not actively putting in money every day.

That way, you can try and get ahead of any crashes and keep your funds afloat. Remember, cryptocurrency investments are speculative. There’s never a guarantee of profit. The market is unemotional.

Get Started Earning Passive Income Crypto

Now you’re aware of many other ways to generate cryptocurrency passive income. Hopefully one or more of these ways works for you.

Getting started might not be the easiest thing in the world, but for most people, the effort is well-rewarded.

Take some time to look at your funds and understand which method works for you.

Maybe budget out your money to get a headstart on mining or staking, for example.

There’s no wrong way to get started, and the best passive income experts bring in money from more than one source. Good luck out there!

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How do you earn passive income from crypto?

Popular ways to earn passive income from crypto are staking, lending, and yield farming.

How do you earn crypto?

You can earn crypto from mining, staking, masternoding, liquidity providing, airdrops, affiliate programs, peer to peer lending, yield farming, learn-to-earn, and play-to-earn to name a few.

What is staking?

Staking is the act of locking up your cryptocurrency, typically for the privilege to perform a service, in order to gain more cryptocurrency. This can be done on-chain or through decentralized applications.

Can you earn passive income with airdrops and forks?

Earning crypto with airdrops and forks can be lucrative, pending the tokens and coins gain value. Furthermore, airdrops and forks are not a consistent way of making passive income.


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