Most users of cryptocurrencies have started their investments in this environment through the generation of passive income, a desirable option for those who are part of the digital financial market.
Currently, many platforms worldwide allow their users to carry out what is known as trading not only traditional financial assets but also digital currency.
Everywhere we find information about cryptocurrency exchange platforms, what happens is that without them, cryptographic operations would be complicated; it is essential to manage the information regarding these and be able to make the decision that best suits the investor profile of each user.
Perhaps the excitement of investing in Bitcoin has subsided a bit due to the downward trend that has been going through throughout 2022, but this has not ruled out the idea of opening accounts in the Exchange to later improve the direction see how investments in this type increase.
The most significant interest of investors is to protect their capital from the effects of devaluation produced by inflation, which is why there are various strategies to invest in. Many people are using the passive income that they can generate, and not is none other than passive income.
What is crypto passive income?
Who would not like to generate income without having to work? Every day at a fixed time of more than 10 hours, since this is the central concept reflected through passive income, which for many is usually considered a kind of dividend obtained by investing in a particular financial asset.
Logically, a certain amount of money must be invested to obtain these profits, periodically getting a profit just by having them.
There are various ways to generate this type of income in the crypto environment, all thanks to the fact that it is based on a decentralized financial system.
One of the best-known forms is staking, in which investors or traders usually block their digital assets for a certain period to generate a profit known in the traditional financial system as interest.
This type of operation is usually compared to what would be the fixed term; the percentage may vary according to the exchange platform.
The functionality of passive income with cryptocurrencies
If an investor holds their assets like Bitcoin for 30 days, they can generate an annual rate of return of around 10%.
The period for which the capital is maintained depends entirely on the investor’s decision; it can vary from 15 to 120 days; the longer the blocking period, the greater the interest received.
These types of investments are considered by investors who take low risks in the face of the volatility of cryptocurrencies.
The way to guarantee this type of operation is through smart contracts in various protocols; the most significant risk to which these types of instruments are exposed is that they can be hacked, which is why the most common suggestion is to invest in crypto projects safe and verified.
Interest is generated daily from day 0, an aspect that is very attractive to novice investors, where the freedom to withdraw their profits and capital is done independently.
The best-known rates according to the type of digital financial instrument are the following: Stablecoins, 9.5%, and the most used or, from a certain point, the most established are Ethereum and Bitcoin, which manage a return rate of around 6%
When a cryptocurrency investor evaluates and compares the benefits of the crypto ecosystem with those granted by a traditional financial institution with the first option, it is possible to multiply the profits by more than 35% compared to the second option, which could generate a maximum of 1.75% of the rate of return.
Cryptocurrencies are compared to traditional jobs.
In addition to the option mentioned above to generate passive income, other opportunities are usually attractive for riskier people linked to cryptocurrency loans.
This type of investment, like staking, after the crypto assets are created and acquired, only needs to be supervised to execute the established plan, unlike everyday work that requires a lot of dedication.
Crypto investments are usually the perfect tool for workers who dedicate workloads of more than 8 hours a day, which represents exhausting time and energy.
Cryptocurrencies are usually considered an investment option, but it is clear that as any financial asset represents risks, all aspects must be evaluated before making a decision.