3 Ways To Make Money on Cryptocurrencies Without Trading

Large price jumps and sizeable gains attract a lot of attention in the cryptocurrency community and give hope of overnight riches.

Unfortunately, the reality is somewhat different, so such situations are infrequent. Only a few traders manage to catch these waves and cash out their stakes in time.

However, this is not the only way cryptocurrency investors can make money, with the recent rise of decentralized finance (DeFi) and NFTs which are providing almost endless investment opportunities.

Let’s look at three ways cryptocurrency owners can make easy money without trading.

This guide to staking crypto, crypto savings, and liquidity mining will give you an insight into maximizing your earnings with crypto.

Staking Crypto

Some cryptocurrencies can be kept “locked” in wallets or on stock exchanges and thus generate passive income.

Staking, so-called Cryptocurrency holding, which rewards users for locking tokens on the protocol as collateral to validate transactions, is one of the best ways to make money.

The cryptocurrency holding method is quite profitable and complements the HODL method very well. With HODL, you wait for the price of cryptocurrency to rise, and by staking, you increase the total amount of cryptocurrency you own.

Anyone can hold cryptocurrencies, provided that these cryptocurrencies can be held, i.e. their consensus mechanism is PoS.

Staking provides one of the best low-risk opportunities in cryptocurrency to acquire a larger stake regardless of market sentiment or performance and also helps support the network through transaction validation.

Cryptocurrency Savings

Saving in cryptocurrencies is quite similar to saving in regular banks.

But compared to savings in traditional banks, savings in cryptocurrencies bring several advantages, because with crypto savings it is possible to get much higher returns. For example, savings in cryptocurrencies can yield from 7.5% to as much as 50% return on the deposit, while returns on savings in banks are only around 1%.

To make money through saving cryptocurrencies, you need to save the existing cryptocurrencies you have on one of the platforms that allow saving cryptocurrencies.

Liquidity Mining and Yield Farming

The concept of yield farming, also known as liquidity mining, emerged from the DeFi sector as a method of attracting liquidity to DeFi projects.

Liquidity mining is one-way crypto investors maximize returns on their crypto investments.

Providing liquidity is one of the primary components of a DeFi platform, and investors who choose to provide funds to new platforms are often rewarded with a high percentage of return on the amount invested, as well as a percentage of fees generated by transactions within the “pool”.

DeFi or decentralized finance projects come with a reward system reminiscent of the bond market. It is a method of getting rewards by locking cryptocurrencies. When you lock funds and allocate liquidity to a DeFi token, in return you receive rewards and interest or additional tokens, depending on the project.

The yield farming concept is a way to create the highest possible yield while minimizing risk.