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3 Strategies to Earn Passive Income Using Cryptocurrency

3 Strategies to Earn Passive Income Using Cryptocurrency
By Ben Marks, CEO, and Founder, Blocktrade Capital

All crypto investors share the same dream: make a trade, see an instant 100x return, cash out for millions, retire.

Unfortunately, the unpredictable nature of the crypto market demonstrates that easy profits are unusual to come by.

To remain competitive, investors need to – at a minimum – dedicate a few hours each day to studying the crypto markets. But what if conducting that much research isn’t a realistic option? In this article, I will explain three ways investors can receive a return on their investment by simply holding onto their cryptocurrency. This is otherwise known as “passive investing.”

1. Exchange Token that Pays Dividends

The first way to earn money back is to invest in an Exchange Token; these tokens pay differing amounts of dividends to investors. If a trader uses the exchange token to pay trading fees, the trading fees are reduced. Examples of exchange-owned utility tokens are Kucoin Shares (KCS), Huobi Token (HT) and Binance Token (BNB). Let’s look at the Huobi Token as an example. Huobi has five tiers of VIP services, which allow members to enjoy a certain percentage of discounted fees. For example, if you purchase the third tier VIP “package,” you pay 1200 HT per month for a 30% transaction fee discount. This subscription service aims to save Huobi investors more money the more they use the coin, acting as a form of a dividend.

2. Tokenized Crypto Fund that Pays Dividends

Tokenized crypto funds are an easy form of passive investment strategy, as these funds are committed to distributing dividends to their investors. This works by having you hold the fund’s native token, for which you can receive dividends from the tokenized fund itself. Depending on the nature of each fund, token dividend payouts are not always sure-fire as they are subject to changes at the discretion of the issuer. An example of a tokenized fund is the Taas Fund. Based on the fund’s performance over 90 days, the Taas Fund pays a quarterly dividend to each investor. If the fund loses money, you won’t receive any dividend. But if it posts positive returns for the quarter, the Taas Fund pays out 25% of those profits on a pro-rata basis to token holders.

3. HODL (Holding On for Dear Life)

HODL’ing  – or “holding on for dear life” – is a fancy term that that refers to holding onto digital assets for the long run. As a crypto fund manager, I have learned that this strategy is the smartest investing strategy a trader can utilize. It is easy to become tempted by riskier altcoins due to the volatile nature of the crypto markets, but as Bitcoin’s historical price movements show, holding on to your tokens can be highly profitable. If we look at the history of Bitcoin’s large-scale price corrections, BTC has risen from each of the eight crashes to attain a new record high price (excluding the 2018 crash that it is still recovering from). Numbers do not lie, and holding on to your currency is the most straightforward and easy way to earn money regularly.

These three passive investment strategies offer a quick glimpse into the myriad of investment techniques that can be used to make money in the digital markets. Before diving into the complex world of crypto trading, I advise each person to educate him or herself thoroughly in high-level investment strategy. Nonetheless, I hope this article helps you better understand some of the most effective ways to passively and safely make money using your digital assets.

Ben Marks, Founder & CEO, Blocktrade Capital

Ben Marks is the founder and chief executive officer of Blocktrade Capital, a hedge fund for crypto assets. The fund allows investors to hold a basket of the top cryptocurrencies that best contribute to the overall stability of the crypto ecosystem. Ben has been invested in Bitcoin since early 2014, and prior to that, he worked in Bank of America’s Home Loans division and Wells Fargo’s Asset-Based Lending Group. Ben holds a Master of Business Administration from the University of Southern California and a bachelor’s degree in management from Boston College. To connect with Ben, please find him on LinkedIn.

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