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How to Earn Passive Income With Cryptocurrencies in 2024

8 mins
Updated by Ish Bautista
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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 just getting started, know there are many ways to earn passive income with cryptocurrency. This post will break down each method to help you start immediately.

Why is passive income important?

Over the past decade, the rise of cryptocurrencies, including Bitcoin, Ethereum, and various altcoins, has captured widespread interest and acceptance. The growth of Decentralized Finance (DeFi) and the cryptocurrency market opens up numerous avenues for passive income generation.

Pursuing passive income through crypto can bolster your future investment plans or even contribute towards paying off educational or vehicle loans if you are currently studying. The benefits of securing passive income are extensive, offering a robust foundation for future financial stability and acting as a valuable addition to side hustles for individuals aiming to expand their income streams.

What are the top ways to earn passive income?

We’ve identified the best strategies for earning passive income from crypto to guide you on this path. Our recommendations encompass staking, cloud mining, and other lucrative options, providing a detailed roadmap for enhancing investment returns.

1. Start investing

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Starting to earn passive income with cryptocurrencies and DeFi is pretty straightforward: invest. Say you buy some crypto, like Bitcoin, Ethereum or altcoins, maybe throw in a few stablecoins to balance things out, and stash them in your crypto wallet. If the value goes up over time, that’s passive income right there. Many folks diversify across different cryptos to spread their risk and potential gains.

A common approach among investors, especially given that the crypto world is still evolving, is to hold onto their assets. Many believe that these digital currencies haven’t hit their peak yet. So, if you’re game for a bit of waiting, now might be a great time to invest and see how things unfold.

2. Try staking

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 network users 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 minimum threshold for staking, which, once met, qualifies you to become a validator. This role entails the network trusting you to verify transactions. To fulfill your validator duties, you must keep your computer on and connected to the network. Securely holding your crypto-staking funds in the network’s designated crypto wallet is crucial. By maintaining this setup, you can earn rewards for participating and contributing to the network.

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

3. Lending

Staking and lending platforms are part of the decentralized finance wave – moving traditional finance to blockchain networks. With a traditional bank, your funds are lent out to others through loans.

You earn interest due to this, but at a low rate the bank decides. 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.

You can make your loans on the side, and your staked assets are being loaned out automatically.

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

4. Cloud mining

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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 its physical mining establishment.

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

The process is quite simple and requires less upfront cost than traditional mining. However, it’s worth noting that you won’t get all 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.

5. Gaming

Though currently in its early stages, the play-to-earn blockchain gaming model is projected to expand significantly. It’s anticipated to grow at a compound annual growth rate (CAGR) of 21.3%, reaching a market size of $3618.4 million by 2028.

It’s possible to earn passive cryptocurrency income by playing video games on the Ethereum blockchain network and other DApp-supporting networks.

Many collectible-style games have you invest in a character, use it in-game so it inherits value, and sell it off later on. While this requires some effort, one could argue that playing a game is fun, and the income it would generate is passive. You’re not investing more money to make money – it just requires that initial investment.

In some games, you don’t have to put much time in, and the asset will grow by itself. We encourage you to research and find the blockchain-based DApp that works best for you.

Factors that affect passive income

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

  • 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.
  • Accessibility: How easy is it for you to acquire mining equipment or stake a required amount of funds? Can you 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 involves waiting. Other times, it means searching for the best platforms that fit your funds and investment personality.
  • 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. There’s certainly a time when 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 as well as you’d hoped.
  • Risk: Depending on your method of generating passive income, you’ll definitely have to manage some sort of risk. 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. Remember, cryptocurrency investments are speculative. There’s never a guarantee of profit. The market is unemotional.

Unlocking passive income opportunities in crypto

You now have insights into various methods for earning passive income with cryptocurrencies. With a bit of determination and effort, one or more of these strategies can be a fruitful venture for you. While initiating your journey into crypto income might seem daunting, it often leads to rewarding outcomes for many.

Take a moment to assess your financial situation and decide which approach aligns best with your goals. Consider allocating a portion of your budget to kickstart activities like mining or staking. Remember, there’s no incorrect way to start, and the most successful individuals in the realm of passive crypto income often diversify their sources. Wishing you all the best in this exciting venture!

Frequently asked questions

How do you earn passive income from crypto?

How do you earn crypto?

What is staking?

Can you earn passive income with airdrops and forks?

Can I earn passive income by playing games?

What is staking, and how does it generate passive income?

What is the concept of cloud mining in the cryptocurrency space?

How to earn money without trading?

How does one earn free crypto?

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Max Moeller
Max is a cryptocurrency journalist with an affinity for games and emerging technology. After leaving school to start a writing career, he wrote his first article on blockchain and fell down the rabbit hole. Since starting in 2017, Max has worked with multiple blockchain startups and crypto enthusiast spaces, doing his best to educate the world on the nascent technology. Max has been published in various blockchain and crypto related magazines before settling down at BeInCrypto to focus on...