How to generate passive rewards with cryptocurrencies?

The crypto ecosystem opens up a universe of possibilities for people to quickly generate passive rewards with cryptocurrencies.

PTo achieve this, you don't need to follow elaborate strategies or buy an expensive course that promises to give you the key to success; you simply need to know the tools you have in the crypto ecosystem, learn how to use them, and be consistent.

Therefore, here we will show you some tools at your disposal and the basic strategies that can help you generate passive rewards in the world of cryptocurrencies. From this point forward, we want to emphasize that all of these strategies carry a certain degree of risk that you must manage intelligently. Our strongest recommendation is: USE THAT MONEY THAT DOES NOT COMPROMISE YOUR LIFE OR THAT OF YOUR FAMILY. In other words, fulfill your personal and family obligations, and use the following strategies with capital that does not put your well-being, your health, or that of those who depend on you at risk.

That said, let's look at some of the strategies that can help you earn passive rewards in the crypto world.

HODL, the first and easiest strategy

One of the simplest ways to earn passive rewards in the world of cryptocurrencies is through... HODLHODLing simply involves acquiring a coin and holding it for extended periods to earn rewards as its value increases. It's the easiest way to achieve this, and you'll find it very similar to traditional saving; the difference is that instead of holding fiat currency, it allows you to store a major cryptocurrency within the ecosystem.

It might sound too simple, but HODLing is a real strategy within anyone's reach. All you need is patience and nerves of steel to manage the inherent volatility of this ecosystem.

When you find yourself in a bull marketIt's easy to fall into the temptation of excessive spending or acquiring assets. However, it's vital to remember that every bull market can give way to a bear market, where the value of your funds could be diluted and affect your returns.

Don't worry, this dynamic is completely normal. Crypto markets constantly go through bull and bear cycles, a pattern that has persisted since their inception. Although the frequency and impact vary, the historical trend shows increasingly longer cycles and a revaluation of the coins that generally points upwards.

Bitcoin, the best example of the power of HODL

Let's take Bitcoin as an example: when it was launched in 2009, its value was 0. In fact, you could simply go to a faucet to get large amounts of BTC for free; you could get up to 5000 BTC from a faucet in its early days. Now, 13 years later, the value of bitcoin is such that it has exceeded 60 thousand dollarsFaucets now give out a few satoshis (one hundred millionths of a BTC), and many early BTC HODLers are now multimillionaires. Of course, bull and bear cycles have been a constant, putting pressure on HODLers to sell or buy more BTC, and that's where nerves of steel and perseverance pay off.

Of course, HODLing can also be accompanied or complemented with other strategies. For example, you can HODL BTC and accompany it with controlled purchases of more BTC over time, using strategies such as... Dollar Cost Average (DCA)In this case, you're always acquiring a little each month, looking for the best purchase price so that the accumulated amount is positive and generates a passive reward.

The main drawback of HODL is that it's a long-term strategy. While it can offer very high rewards quickly during bull markets, the arrival of bear markets wipes all that out, and selling during bear markets means losing more than you think you'll lose. For this reason, HODL, in any of its forms, is a perfect strategy for those who want to build a long-term fund.

HODL, a wallet and nothing more

For its part, the most positive point of the HODL is that you only need a cryptocurrency wallet and something to make the purchase/sale notes: a sheet of paper or an Excel document. You don't need anything else, no complicated tools, just buy/sell and record everything to know how you evolve over time. For it, Bit2Me Wallet is perfectThis allows you to not only securely HODL your cryptocurrencies, but also to have a complete view of your portfolio if you HODL multiple coins at the same time.

In any case, from Bit2Me You will be able to perform these operations easily and maintain precise control over all your transactions, with the security that our cryptocurrency suite can offer you.

Staking, for those who want to boost their rewards

The second strategy to generate passive rewards is to participate in Staking. This is an additional step to the HODL, since you actually do two things:

1. You HODL a specific coin, for example Ethereum.
2. You get rewards for having that Ethereum stored in a staking pool.

Thus, the chances of winning multiply, because you're not only HODLing a coin that can appreciate more and more over time, but also... add that coin to a staking poolThis pool will grant you a certain reward according to your participation. It's a win-win strategy that has gained significant traction because the DeFi (Decentralized Finance) ecosystem relies on it.

But how is this possible? Is it magic? The truth is, no. What happens is that your staked crypto assets are "circulating" just like in a traditional bank, only in this case, they circulate thanks to the power of smart contracts and blockchain decentralization. When you stake, your assets are taken from your wallet and placed in a staking pool, which is simply a pool of cryptocurrencies in which you and thousands of other people participate. These cryptocurrencies are managed by smart contracts with multiple functions: some of them facilitate decentralized exchanges, others manage loans, or serve to add liquidity to other DeFi protocols.

So, basically, you give your assets to a staking pool so they can use them to provide services, for which the pool receives fees. These fees are used to pay you your reward and maintain the entire operation and development of the staking pool. Now you see it's not magic; it's just a financial model sustained by the work and needs found in the crypto market.

Of course, staking is not only part of DeFi, it is also possible to stake cryptocurrencies to participate in consensus protocols. For example, you can use ETH to participate in a validation staking pool, so you can earn rewards for the validation work that the pool does. In any case, your rewards will be related to the level of participation you have in the pool, something that these platforms will inform you of continuously.

Bit2Me Earn by staking in a couple of clicks

En Bit2Me You can easily stake more than 20 cryptocurrencies using our service Bit2Me Earn. With an APY of up to 58%, the ability to choose weekly or daily rewards, immediate withdrawal availability, and all the security that our Suite provides, Bit2Me Earn is a tool that puts the power of staking at your fingertips in just a couple of clicks, allowing you to generate passive rewards with cryptocurrencies without complications.

Yield Farming, for those who want a little more risk

The next step to generate passive rewards leads us to Yield Farming. Yield Farming is a strategy that we could call “leveraged staking”, a strategy in which we stake receiving a token as a reward that we can also stake to receive even more rewards for it. The idea is that our staking savings generate a reward that we can use on the same or another platform, in order to generate more rewards for us.

While yield farming maximizes our opportunities for rewards, it also raises risks. First, it is a complex strategy, in which many factors can affect the results. Additionally, the platforms that apply this strategy must be safe and you must know in advance the safe limits to participate. For example, a platform that offers a 300% yield without further explanation is clearly a hook to lead you to disaster. Even levels like 20% yield are unsustainable if market conditions and tokenomics reality do not accompany the project, something we learned in the Anchor Protocol and Terra/Luna crack.

In any case, yield farming is a strategy that allows you to easily generate passive rewards with cryptocurrencies, and you can also apply it using our services. Bit2Me Earn by choosing the coins we have available on the platform and boosting your rewards by staking our B2M token.

FAQ – Passive rewards with cryptocurrencies