Suppose you’re a long-term-oriented cryptocurrency investor and want to make sure that you think about earning interest in those digital investments. Utilizing the cryptocurrency market to generate interest can bring you passive income and boost your profits if the cryptocurrency market rises.
Numerous platforms such as KuCoin provide interest-bearing accounts to pay you with the currency you deposit into your account. The rates of interest differ depending on the kind of cryptocurrency you select. There are also decentralized apps built on Ethereum that allow you to get interest from your cryptocurrency without creating an account. Please find out how to begin earning interest in cryptocurrency now with our tutorial.
What is an interest account in crypto?
A popular and reliable method to earn interest on your savings is through the bank. Some lucky customers could make tens of euros on their deposits each year. However, unlucky customers might not earn enough to offset inflation.
That means that they may be able to lose the money! Incredibly, the old-fashioned banks don’t have any customers. But here’s the bright side cryptocurrency interest accounts are now a popular method of ensuring that your savings increase over time.
Interest accounts for cryptocurrency work as savings account at your bank, but with more benefits. The only thing you have to do is deposit your cryptocurrency into the account. The bank will reward you with interest in exchange for their services and attract others to join their customers.
The company that offers the interest account then lends your cryptocurrency to trusted investors. The investors are typically either corporate or institutional. Since cryptocurrencies such as Bitcoin offer excellent historical returns and are among the most popular investment options around the globe, Bitcoin interest accounts in cryptocurrency are more profitable than traditional interest-based accounts.
How to Earn Interest on Cryptocurrency
Open a crypto-account
First, it is necessary to create an account on a platform that allows you to earn interest on your crypto assets. One of the most impressive features offered by KuCoin crypto exchange is the Customer-to-Customer lending feature. Customers who require money are matched with the most suitable lender. After the transaction has been compared with the lender, the borrower receives the funds, which means the lender will earn the set interest. KuCoin lending is top of the line.
On KuCoin, the cryptocurrency KuCoin, more than 65 cryptos are accepted to lend money, as you can see in the below image. Rates of return are pretty high as well, with an APR of more than 40% currently for USDT. KuCoin can offer as high as 300 percent APR (yearly interest). However, interest rates typically range from 6-12%, and some cryptos even with a maximum of 50%-70%.
Compare the interest rates
You can check what interest rates you’ll earn from different cryptocurrencies directly on the website. If the company gets a share of the interest earned, the interest you make could be additional, even if you’re investing with a similar cryptocurrency.
The interest rates on the savings accounts are usually floating rates. That means the rate of interest changes constantly based on the availability and demand of crypto loans. Cryptocurrency loans are generally sought by leveraged investors and exchanges that allow the leverage of their platform.
A decent interest rate to earn from stable coins typically ranges from 6to 9 percent. Hodlnaut offers very high-interest rates for stable coins at 12percent annual interest. Specific interest rates in crypto are higher, sometimes even exceeding 100 percent.
But, these rates are a sign of high inflation rates in crypto and leveraged positions. If you’re not familiar with earning interest from cryptocurrency, you should be wary of cryptocurrency interest rates that exceed 25%.
Add cryptocurrency to your account
A variety of platforms that allow you to earn interest will enable you to pay your account. Certain websites, such as KuCoin and Coinbase, will allow you to buy cryptocurrency directly from your bank accounts. This will enable you to earn interest in cryptocurrency if you don’t own any.
If you open an account on an online platform that accepts only payments in cryptocurrency, you’ll require an account with a crypto exchange if you don’t have one already. Some of the most popular choices for exchanges that accept cryptocurrency are Coinbase, eToro, and Gemini. When you buy crypto using an exchange, you can transfer your money to your cryptocurrency wallet that you want to make money.
Earn interest
After you’ve added money to your account with interest, you’ll begin earning interest. Relax, sit back as you watch your bitcoin assets increase. Interest earned on cryptocurrency is particularly appealing for investors in crypto who believe that the value will rise for Bitcoin and other cryptocurrencies in the longer term.
This is due to the possibility of exponential growth for the crypto interest account. For instance, if you decided to invest in the equivalent of a $30,000 bitcoin at the start of this year amount of interest you earn at that time will be worth twice as much in a $60,000 bitcoin. In addition, the interest rate of 7% you get from a bitcoin worth $60,000 is twice the interest you earn from the initial investment. By frequently check the BTC price is a core action before the actual investment.
The most popular cryptocurrencies investors can earn interest in include Bitcoin, Ethereum, Litecoin, and Uniswap. The interest paid to these accounts is as a cryptocurrency that you have in your account that earns interest which means you have exposure to the market of any cryptocurrency you’re investing in.
Conclusion
The opportunity to earn an interest rate on the cryptocurrency you own is an excellent method to increase the value of your investment. Many platforms let you remove your balance anytime, which means it’s pretty easy to take off of cryptocurrency accounts in the event of need.
Particular companies require a minimum time to hold your crypto on your account for savings. This puts you at a greater chance of fluctuations in the cryptocurrency market. Even though you’d earn interest, your investment could be less if the currency lost value.