Protecting Your Passive Income: Secure Options for Long-Term Success

People’s interest in cryptocurrencies is growing from year to year. As well as the platforms where they can be traded. It is not surprising. After all, experienced traders earn impressive sums on a daily basis. But trading is a skilled job, which requires certain knowledge and skills. You have to analyze the market and its indicators and develop trading strategies. All this is quite difficult. However, there are easier options.

Staking

Staking is as popular option of earning money on cryptocurrency as mining. The latter is applicable to currencies that function on the Proof-of-Work protocol, where coins are mined by complex mathematical calculations by computer power – Bitcoin, Ethereum, and many others. Mining disadvantage is that you need to buy expensive equipment and create farms that require constant supervision: troubleshooting and ensuring fire safety (after all, mining is an energy-consuming activity).

Staking is applicable for currencies created on a different protocol – Proof-of-Stake (PoS). The most popular coins are Solana and Cardano. With PoS, rewards come not for solving math problems but simply for storing coins in your wallet. In order to receive rewards in staking, your assets are blocked in whole or in part into a liquidity pool. This incentivizes participants in the system to get involved in the staking process and thus keep the blockchain running.

The advantage of this type of earning is that it does not require considerable initial investments in computing power, which, by the way, rather quickly become obsolete, cheap, and illiquid assets. Staking takes place in automatic mode. The user does not have to interfere in the process. His only task is to control the accrual of income to his wallet.

You can join such a pool of investors directly on the project through crypto exchanges or market makers. Or you can use Molecula – a platform that allocates USDT TRC-20 (TRON Network) or ERC-20 (Ethereum network) only to reliable and proven DeFi tools. It is an awesome solution for getting passive income without being constantly involved in assets.

If you opt for staking on your own, this also implies certain risks. The main one is a possible drop in the price of the selected currency. Here, it is better to choose a coin with a low level of volatility, demonstrating not dynamic but stable growth. A coin with a high level of volatility can become a problem when staking. After all, in case of a strong drawdown, the investor will not be able to sell it, even if he or she notices the very beginning of the price drop in time.

Trading bots

Trading bots are programs that monitor the market around the clock and automatically make trades on behalf of the user. They scan the market using various indicators and make their own decision to enter or exit based on how they are set up. Their goal is the same as any trader’s – to buy crypto coins cheaper and sell them more expensive.

Bots come in many forms. There are advanced programs with flexible settings that can be “adjusted” to your own strategies. Traders who are familiar with programming can use more complicated variants – scripted trading bots. Here, you take the open-source code and edit it for yourself. Such fine-tuning/development can bring you even closer to the desired result. However, this is hardly suitable for novice investors.

For them, there are easier options to use, but also quite effective trading bots with a minimal set of settings. They allow all investors to earn without exception.

Cryptocurrency holding

The name of this method of passive earning speaks for itself. The essence of holding is to enter the asset long-term and hold it until “better times”, until its value grows significantly compared to the purchase price. The challenge of holding is to avoid being influenced by short- and long-term fluctuations in the price of the coin.

A classic example of holding is investing in Bitcoin. The period of late November-early December 2021, when the “Bitcoin” was at its peak and cost $67,800, turned out to be a record in terms of the number of investors who “woke up”. People who held their coins for 7-8 years sold them, thanks to which the size of their investments increased thousands of times.

The main risk of holding is a mistake with the choice of the asset. Not guessing with the coin, instead of profit, the investor can get a loss. If its price is relative to fiat money or other cryptocurrencies, it will not grow, but it will fall. But this risk can be minimized if you invest not in one currency, but in several – to form a portfolio. In this case, the drawdown on some currencies will be compensated by profit on others.

Conclusion

As you can see, crypto offers almost limitless opportunities for investors to earn money, regardless of knowledge, experience, and financial capabilities. If you are a “trading guru” and have a keen sense of the market, you can earn on your own or sell your skills as a “master” on one of the exchanges. If you are just learning to trade or maybe you just don’t have enough time for it, there are passive types of earnings. They do not require the direct involvement of the investor but allow you to get your part of the profit in this market.