How to generate passive income with cryptocurrencies?

Cryptocurrencies open up a universe of possibilities so that people can generate passive income with cryptocurrencies without major complications.

PaTo achieve this, it is not necessary to comply with elaborate strategies or buy an expensive course that promises to give us the key to achieve it, you simply have to know the tools that you have in the crypto ecosystem, learn to use them and persevere.

For this reason, here we will show you some tools that you can count on and the basic strategies that can help you generate passive income in the world of cryptocurrencies, and from this moment we indicate that they all have a certain risk, one that you must face in a intelligent. Therefore, our highest recommendation is: USE THAT MONEY THAT DOES NOT COMPROMISE YOUR LIFE OR THAT OF YOUR FAMILY. That is, meet your personal and family obligations, and use the following strategies with money that does not compromise your life, your health, and that of those who depend on you.

With that said, let's look at some of the strategies that can help you make passive income in the crypto world.

HODL, the first and easiest strategy

One of the easiest ways to generate passive income in the world of cryptocurrencies is through the HODL. The HODL is nothing more than buying a currency and holding it for long periods of time, so that it allows us to generate passive income as it appreciates. This is the easiest way to achieve this, and in fact, you'll see that it's a lot like saving, only instead of saving fiat it allows you to save a significant cryptocurrency within the ecosystem.

It may sound too easy to be true, but HODL is real and can be used by anyone, all you need is patience and nerves of steel to deal with the inherent volatility. When you're in a bull market, you may be tempted to spend or continue to invest excessively, without taking into account that the bull market can end up in a bear market in which your money is diluted and you do not see a positive effect on your income.

Don't worry, this is normal, crypto markets have bull and bear cycles all the time, is something that has been seen since the beginning of these markets and has been maintained. Of course, the frequency and scope have varied. In fact, the cycles get longer and the appreciation of the currencies always goes up.

Bitcoin, the best example of the power of HODL

Let's take bitcoin for example: when it was born in 2009 its value was 0. In fact, it was enough to go to a faucet for them to give you BTC in large quantities, up to 5000 BTC you could get in a faucet during its beginnings. Now, 13 years later, the value of bitcoin is such that it has exceeded 60 thousand dollars, faucets now give out a few satoshis (one hundred millionths of BTC) and many early BTC HODLers are billionaires. Of course, the bull and bear cycles have been there, putting pressure on HODLers to sell or buy more BTC and that is where nerves of steel and perseverance pay off.

Of course, HODL can also be accompanied or complemented by 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 are always buying, investing a little each month, looking for the best purchase price so that the accumulated value is positive and generates passive income.

The main point against HODL is that it is a long-term strategy. In bull cycles it can offer very high returns quickly, but the arrival of bear cycles destroys all that, and to sell in bear cycles is to lose more than you think you lose. For that reason, the HODL in any of its forms is a perfect strategy for those who want to have 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 perfect, as it allows you not only to safely HODL your cryptocurrencies, but also to have a complete view of your portfolio in case you HODL several coins at the same time.

In any case, from Bit2Me you will be able to carry out these operations in a simple way and maintain precise control of all your operations, with the security that our cryptocurrency suite can offer you.

Staking, for those who want to boost their income

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 earn rewards for having that Ethereum locked in a staking pool.

Thus, the opportunities to receive rewards are multiplied, because not only do you HODL a currency that can appreciate more and more over time, but because of place that coin in a staking pool, this pool will pay you a certain interest according to your economic participation in said pool. It is a WIN-WIN strategy that has gained a lot of interest because the DeFi ecosystem (Decentralized Finance or Decentralized Finance) depends on it.

But how is this possible? Is it magic? The truth is that no, what happens is that your staking money is "circulating" as if it were a traditional bank, only in this case, it circulates thanks to the power of smart contracts and blockchain decentralization. When you stake, your money is taken from your wallet and put into a staking pool, which is nothing more than 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 make decentralized exchanges, others make loans or serve to add liquidity to other DeFi protocols.

Thus, basically you give your money to a staking pool so that it can use said money by offering services, services for which the staking pool receives commissions, commissions that serve to give you your reward and maintain the entire operation of the staking pool and its development. . Now, you see that it is not magic, it is just a financial model that is sustained by the work and the needs that are 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, staking in a couple of clicks

At Bit2Me you can stake more than 20 cryptocurrencies very easily, using our Bit2Me Earn service. With an APY of up to 58%, with the ability to choose weekly or daily rewards, with 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 a couple of minutes. 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 that you can also apply using our Bit2Me Earn services, choosing the coins that we have available on the platform and boosting your rewards by doing staking of our B2M token.