The 5 Best Ways To Earn Passive Crypto Income Safely
Mike Harry
Mar 2024
10 min read
Fact checked
The allure of cryptocurrencies isn't just their potential for quick gains but also the myriad of ways they can generate passive income. This is similar to how one earns interest on a savings account but often with higher yields. In this article, we delve into 5 of the best strategies to ensure that you earn passive income while you snooze!
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How to earn money from cryptocurrency
Cryptocurrency, once on the fringes of the financial world has boldly made its way into the mainstream. One of its most attractive propositions is the potential for passive income, earning without the constant need for active effort.
The traditional financial system has long offered interest as an incentive for saving money. Savers deposit their money in banks, and in return, they earn interest.
Cryptocurrency being the vanguard of financial innovation has adopted this concept, amplifying its potential and offering higher interest rates compared to traditional banks.
There are two main avenues to earn yield in crypto, via a centralised exchange like Coinbase or a decentralised exchanges like Thorchain.
Coinbase Exchange
These platforms lend out these assets to institutional and retail borrowers, charging them interest. A portion of this interest is then passed back to the depositors.
When it comes to earning yield on your digital assets via centralised providers, we recommend only using US/EU regulated exchanges.
Since you have to deposit and store your assets on the exchange, it's vital that you use exchanges that are safe, regulated and trusted.
1. Best Crypto Interest Accounts For Stablecoins
Today, several cryptocurrency exchanges offer crypto interest accounts where users can earn interest on their fiat currencies like USD and EUR and stablecoins like USDT and USDC.
Below we have outlined the safest and most rewarding exchanges on the market for those that want to earn interest on stablecoins like USDC and USDT.
Fiat-backed stablecoins like USDC issued by Circle are backed by high-quality reserves and with transparent, monthly attestation's. Every USDC is 100% backed by cash and short-dated U.S. Treasuries held in regulated U.S. financial institutions.
Circle USDC
Note that while USDT issued by Tether has a larger market cap, it has not gone through the same scrutiny as Circle nor provided the same kind of transparency.
Tether website
The first platform that we recommend using is Kraken which was founded in founded in 2011 by Jesse Powell and headquartered in San Francisco.
With a global presence in 190 countries and a workforce of over 2,000, it offers services including spot, margin, and futures trading, as well as earning and staking.
Kraken Exchange
Kraken supports trading in 190+ cryptocurrencies and is registered with regulatory bodies like FinCEN, FSP, FCA, VASP, and APAC in various regions.
Users that want to earn up to 4.75% on USD stablecoins can simply signup to Kraken, deposit fiat currencies and then convert them to USDT or USDC.
Kraken: Earn 4.75% interest on your USDT and 3.75% on your USDC with weekly interest paid into your account.
Earn 4.75% interest on USDT on Kraken
The second exchange that we recommend is Coinbase that was founded in 2012 by Brian Armstrong and backed by Y Combinator. With over 5,000 employees and available in 100 countries, it supports various cryptocurrencies and fiat currencies.
With over 100 million users primarily in the US and Europe, it's one of the biggest exchanges in the world. Coinbase offers 200+ cryptocurrencies, conducts quarterly audits, and is a public company licensed by FinCEN & FCA.
Coinbase: Earn 5% interest on your USDC with weekly payments into your account.
Earn 5% APY on USDC on Coinbase
We recommend these two exchanges in particular both because they offer high APY on USDC and USDT but also because they are two of the safest and most trustworthy exchanges on the market.
This means that both companies regularly go through audits to ensure full accountability and transparency of their finances and assets.
2. Best Crypto Savings Accounts For Fiat Currencies
For those that are more interested to earn interest using their fiat currencies directly, the best crypto savings account in the market today are found below.
The first exchange that we recommend using is Bitpanda which was founded in 2014 and is an Austria-based cryptocurrency broker headquartered in Vienna.
Bitpanda Exchange
With over 600 employees, it specializes in trading cryptocurrencies, stocks, ETFs, commodities, and offers fractional share trading.
The platform serves primarily European countries where it serves over 100 cryptocurrencies to its over 4 million users.
The company undergoes continuous reviews by KPMG, ensuring customer assets are secured, and holds 10 European licenses, including VASP, MiFID, E-Money, and PSD, complying with European regulations.
Bitpanda: Earn yields of 3.10% on EUR, 4.20% on GBP, or 4.37% on USD and more with Bitpanda Cash Plus.
Bitpanda Cash Plus
The second exchange we recommend using is once again Kraken, that offers up to 4.75% yield on USD. Simply deposit USD on Kraken or deposit other fiat currencies like EUR and GBP and convert them to USD to start earning.
Kraken: Earn yields of 4.75% on USD when you deposit US dollar onto Krake and placing them in the staking vault.
3. Best Crypto DeFi Yield
DeFi represents a set of blockchain-based financial services that aim to replicate or innovate upon traditional financial systems, such as lending and borrowing, but without intermediaries like banks or brokers.
Yield farming, also known as liquidity mining, is a method used by cryptocurrency holders to earn rewards by lending or providing their tokens as liquidity to a DeFi protocol.
Below we have outlined some of the most lucrative ways to earn interest on your stablecoins in DeFi.
Nolus: Earn 6% APY (Low Risk) on your USDC in addition to 14% in NLS when depositing USDC on the Nolus money market on Cosmos.
Nolus Protocol is a decentralized finance (DeFi) platform that pioneered an innovative approach to money markets that allows borrowers up to 150% financing on investments while retaining asset ownership.
Earn 6% USDC Yield on Nolus Protocol
Built on a PoS Layer-1 blockchain using the Cosmos SDK, the team has secured $2.5 million in funding and joined the Cointelegraph Accelerator program to broaden its reach. To get started, download Keplr Wallet and buy USDC in the wallet via Kado, MoonPay or Transak.
Levana: Earn 19% APY (Med Risk) on your USDC when depositing USDC on the Levana Perpetual Protocol on Osmosis.
Levana Protocol is a DAO-operated, leveraged decentralized exchange (DEX) built on the Osmosis blockchain.
Earn 19% APY on USDC on Levana Protocol
Operating on a PoS Layer-1 blockchain using the Cosmos SDK, Levana enables users to trade native tokens with up to 30x leverage at minimal fees and boasts a zero insolvency risk. To get started, download Keplr Wallet and buy USDC in the wallet via Kado, MoonPay or Transak.
Aave: Earn 2.85% APY (Low Risk) on your USDC and 5% on your USDT when lending out on Aave Protocol on Ethereum.
Aave Protocol is a leading DeFi platform that facilitates the lending and borrowing of cryptocurrencies. Built on Ethereum, it employs smart contracts to automate transactions, allowing users to deposit cryptocurrency as collateral and borrow up to 80% of its value.
Earn 5% USDT on Aave Protocol
The platform operates with both variable and stable interest rates. Users connect their digital wallets to the Aave web app to deposit and choose their desired borrowing cryptocurrency.
With over $3 billion in total value locked, Aave ranks among the top crypto lending protocols. To get started, download MetaMask and buy USDC in the wallet.
Thorswap: Earn 13% APY (Med Risk) on your USDC and 19% on your USDT when lending out on Thorswap Protocol on Thorchain. To get started, download Xdefi Wallet and buy or deposit USDC or USDT in the wallet.
THORSwap Finance, built on THORChain's protocol, is a multi-chain decentralized exchange (DEX) aggregator offering true self-custodial cross-chain exchange of native assets.
4. Highest APY Crypto Staking
For those of you who have invested in digital assets like Ethereum (ETH), Solana (SOL), Polkadot (DOT), Cosmos (ATOM), Tezos (XTZ) and so forth, you can earn staking rewards on your assets.
For those that want to maximise the APY that you can receive on your assets, the best way is to simply download a non-custodial wallet and stake your assets directly via the wallet.
This comes with a bit more work but for those of you who do not mind getting your hands dirty, this is the way to earn the highest rewards.
Below you find the best wallets that you can use to stake some of the most popular crypto assets.
Phantom: Download the Phantom Wallet if you want to stake Solana (SOL) and earn up to 7% in APY. MetaMask: Download the MetaMask Wallet if you want to stake Ethereum (ETH) and earn up to 4% in APY. Keplr: Download the Keplr Wallet if you want to stake Cosmos (ATOM) and earn up to 19% in APY. Trust Wallet: Download Trust Wallet if you want to stake Polkadot (DOT) and earn up to 15% in APY. Exodus: Download Exodus if you want to stake Tezos (XTZ) and earn up to 5.7% in APY.
For those of you that don't mind sacrificing some APY and privacy for some added convenience, you can simply staking your assets on cryptocurrency exchange.
5. Earning with Bitcoin
For those that are Bitcoin HODLers that want to earn interest on their assets, they will have to lend out their BTC either in a custodial or non-custodial in order to earn interest.
The best place to earn interest on BTC at the time of writing is by using frontends that connect to Thorchain.
THORChain is a decentralized cross-chain liquidity protocol that allows for native asset exchanges between major blockchain networks like Bitcoin, Ethereum, Binance Chain, and more.
Thorchain Protocol
To access Bitcoin (BTC) yield, we recommend downloading the Xdefi wallet and clicking on portfolio view to get access to all available earn opportunities.
Xdefi: Earn 3% on native Bitcoin (BTC) via liquidity sourced on Thorchain
XDEFI Wallet is a decentralized finance (DeFi) platform that enables users to securely store, swap, and send cryptocurrencies and NFTs across 34 blockchains.
Xdefi Earn 3% on BTC Via Thorchain
It prominently supports assets from chains such as Ethereum, Bitcoin, Solana, and Cosmos. Being non-custodial, XDEFI ensures that users have complete control over their funds and personal data.
Additionally, the wallet integrates with hardware solutions like Ledger and Trezor for enhanced security and offers instant cryptocurrency swaps through leading DEXs.
eToro is a multi-asset investment platform. The value of your investments may go up or down. Your capital is at risk.
eToro USA LLC: Investments are subject to market risk. Including the possible loss of principal. Don’t invest unless you’re prepared to lose all the money you invest.
