Earn Passive Income With Crypto

How to Earn Passive Income With Cryptocurrency

By now, it’s no secret that the crypto world offers a variety of ways to make serious money.

Outside of trading tokens and holding them in hopes that they appreciate in value, did you know that there are ways to earn passive income with cryptocurrency as well?

The following guide will highlight a few of the best ways to make money with crypto passively, with plenty of tips and resources to help you maximize your ROI.

What is Passive Income?

The idea of passive income is an attractive one: a system where you put in little to no effort while receiving a steady stream of money on autopilot.

If it sounds like it’s too good to be true, you’re right. Most forms of passive income aren’t really all that passive.

Whether it’s affiliate marketing, blogging, selling eBooks and other digital goods, rental income, or stock dividends, most forms of passive income actually require quite a bit of work.

What’s worth noting about most passive income opportunities in crypto, so long as you have a working knowledge of the space, you can generate real money without too much work at all.

The goal of generating passive income is to create multiple streams of revenue that can bolster your overall net worth. Even if you are only supplementing your 9-to-5, having a bit of extra money flowing in can make a big difference.

The allure of earning passive income is financial freedom, which unlocks so many opportunities in life.

What Makes Cryptocurrency So Attractive?

In my experience, crypto offers some of the only true “passive income” out there.

You make an initial investment in a certain token, you place them in a farm, and sit back as your rewards accumulate.

Of course, if you want to maximize your returns and minimize your risk, you have to be a little more proactive than that. The point is that you can’t really achieve this anywhere else.

There are mutual funds, savings accounts, and similar investment vehicles that are equally passive, yet don’t offer anywhere near the same return.

If you want real money, crypto is where it’s at. The key is utilizing the best passive income strategies that  offer a consistently high yield.

How is this possible?

  • Blockchain technology allows for quite a few passive income generating strategies which are coded right into the smart contracts.
  • Crypto tokens are programmable money. Smart contracts can be designed to pass value to holders in a variety of ways, some more reliable and sustainable than others.
  • When you also factor in other variables like swap fees, protocol fees, locking fees, and treasury management, it’s easy to see how value can be seemingly transmuted from thin air.

We’re not here to talk about the complexities of smart contracts, however. You’re here to make money with easy passive income strategies.

Best Ways to Earn Passive Income With Cryptocurrency

The strategies I’m about to highlight are by no means the only ways to create passive income in crypto. There are reflection tokens, printer tokens, rebase tokens, the list goes on.

However, the following methods were chosen because they are effective, and because they are more sustainable than most.

Farming Tokens

One of the oldest and most reliable forms of earning passive income with crypto is to farm tokens.

If you are not familiar with farming, it is a term that usually refers to the rewards obtained from providing liquidity on certain protocols.

In exchange for providing liquidity, tokens are awarded.

Many low-effort farm tokens tend to depreciate in value quickly, so the returns you can make from them are minimal.

If you intend on farming, you have to be discerning when it comes to which protocols you use and which pools you enter.

Crypto Farming Passive Income
Farming is one of the most common and reliable ways to make steady passive income with crypto. As long as you have a solid farming strategy, you will likely make money even in a bear market.

$CAKE on the Binance Smart Chain is perhaps the most well-known farm token. PancakeSwap offers a wide range of different LP Farms (liquidity provider farms) where you can place various tokens in order to receive $CAKE. You can then choose to compound your $CAKE in their vault, or pair it with $BNB to compound your farming efforts.

Although PancakeSwap offers plenty of farming options, it wouldn’t be my first choice. There are other farms with potentially more upside, much more modest market caps, and better tokenomics.

  • SoulSwap (Fantom)
    • Highlights: Great APR on popular tokens, stake farm token $SOUL to compound rewards, lending and borrowing built in, other great features.
  • Liquid Driver (Fantom)
    • Rewards in $LQDR, which you can lock to compound further rewards. Stable farms. Quickly becoming one of the true Fantom “Blue Chips.”
  • Beethoven-X (Fantom)
    • Rewards in $BEETS, which you can stake for further compounding. Unique pools that are like crypto index funds.
  • Trader Joe (Avalanche)
    • If you like Avalanche, this is the place to be. Plenty of farming options with great APY, rewards in $JOE which can then be staked for additional APY.

Crypto Vaults

Vaults are simple and effective ways for increasing your exposure to a certain token with minimal risk.

There are several vaults and vault-like protocols out there in the world of decentralized finance, but my protocol of choice is Yearn.

It couldn’t be more simplistic: you stick a single token in one of their vaults, and you reap the upside of the farming strategies that they employ behind the scenes. They put your crypto to work for you with advanced strategies that most people either don’t have the experience for or time for. Only a fraction of the collective tokens in the vault are used in these strategies, thereby minimizing risk.

Yearn not only offers vaults for popular tokens like Ethereum ($ETH) and Fantom ($FTM), but stablecoins like $USDC and $DAI as well.

Although the APY on these vaults is minimal compared to what you can find in most farms, it’s a safer and more stable strategy.

Vaults are a good way to “long” your position in a certain crypto. If you are bullish on $FTM or $SPELL for instance, it’s easy enough to stick these tokens in Yearn’s vaults, thereby accruing more tokens while being able to take advantage of any positive price action with zero risk of impermanent loss.

Passive Income Generating NFTs

One of the newer and most innovative ways to earn passive income with cryptocurrency is to invest in the right NFTs.

Recently NFTs have exploded in popularity and are now a major part of many an investor’s portfolio.

However, the traditional way of making money off of NFTs usually involves grabbing a bunch on mint day and sitting on them until they gain popularity and the price increases, allowing you to flip them on NFT marketplaces for a profit.

This is the exact opposite of passive income, and actually involves a lot of time and effort if you want to get it right.

Luckily, there are impressive innovations happening with NFTs as of late.

One such example would be the NFTs featured in The Lost Glitches. They offer beautiful PFP NFTs that can be staked in order to earn $LOST.

  • $LOST will be used to purchase booster packs of their upcoming TCG.
  • The ecosystem features a wide variety of other NFTs that not only feature great art but a high potential to accrue in value once the game releases.

Trading of the $LOST token will be available soon, so it’s worth investing in Glitches now so you can start earning as many tokens as possible.

Combining Crypto Strategies

Any one of these strategies is a great way to create passive income, but the true magic happens when you learn to combine strategies so that your investments feed one another.

There are several benefits to this kind of approach:

  • Allows you to gain exposure to more tokens that you believe will appreciate in price
  • Much less risk of losing your entire investment (whether from a hack, a token crashing, for example)
  • Potential for greater returns.

The latter point is especially attractive, and probably the best reason for using a more complex passive income strategy.

For instance, you may select a farm on Trader Joe that nets you a stable 60% APR. A simple farming approach would be to take those rewards and place them back into the farm every so often.

You could be looking at doubling, tripling, or even quadrupling your return. The best part is, if the APR of the farm begins to drop, you still have your NFTs paying out great rewards each day, which you can also compound.

The only downside to this approach is that the more layers or strategies you add on, the less “passive” it becomes.

It’s up to you to decide just how involved you want to be when it comes to your passive income crypto plays.

Make money from your phone with crypto
Earning passive income with crypto is not only easy, it’s accessible. All you need is a phone and you can invest and generate rewards anytime, anywhere.

Is Crypto a Safe Form of Passive Income?

If you are new to crypto you might be wondering just how safe these passive income strategies are. This is especially the case if you are planning on investing a lot of money in order to get high returns.

With anything crypto related, there’s always a little bit of risk. Even audited protocols run the risk of being hacked, and in a bear market, token values can shrink quite a bit as well.

However if you take a calculated approach and stick with tried and true protocols, you will significantly reduce your risk.

As far as passive income strategies are concerned, crypto offers some of the highest returns out there, which is why so many are willing to give it a shot. 

A rule of thumb, no income is truly passive. You should routinely check up on your investments and adjust strategies as needed depending on the market or new opportunities. This goes double in crypto, as there are always new protocols popping up with tokenomics that might offer greater yield.

Passive Income While You sleep
Sleep like a baby knowing your money is making money 24/7 with crypto and NFTs

Can Crypto Passive Income Make You Rich?

Whether it’s stocks, crypto, or anything else, most people are investing with the mindset that they will become wealthy.

There is nothing wrong at all with this mindset. However, it’s good to have realistic expectations and to fully understand what you are getting into and the type of returns you can expect.

Earning passive income with crypto can certainly make you wealthier if you do it right, there’s no doubt about that. Will you get “rich” overnight?

That’s unlikely. Most of the people making insane returns in crypto are already playing around with a large sum of money to begin with.

That doesn’t mean you can’t make it big even with a passive strategy.

For instance, to use some of the examples highlighted above, some quality tokens are sitting at very small market caps. Were these tokens to take off, you’re looking at 5x to 10x gains easily.

That means your initial investment of $1000 could become $10,000 or more, and that’s not counting farming rewards or any kind of strategy, merely token appreciation.

One word of advice for getting the best returns from passive income in crypto, don’t chase high APY opportunities and bounce from one protocol to another.

People that farm stablecoins and methodically compound their profits almost always outperform the rest of the market. Likewise, if you stick with a protocol long term even during a down trend, and continuously compound, you will eventually make your ROI and everything else will be pure profit.

Regardless of the strategy you use, don’t expect crypto to make you rich overnight. Passive income strategies are long term plays.


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