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                                        How to Generate Cash Flow from Your Crypto Holdings

How to Generate Cash Flow from Your Crypto Holdings

29 Nov 2021
Reading Time: 9 minutes

Whenever it comes to making money from Crypto, the most popular way is to hold HDOL Bitcoin or any other cryptocurrency. But, it is not the only way to make money out of your crypto holdings . Instead, there are a few other ways that allow you to generate cash flow from your crypto holdings.

In this article, I will be talking about some of the best and easy options to earn more money from your crypto holdings apart from just holding crypto coins.

Different Ways to Generate Cash Flow from Crypto

Different Ways to Generate Cash Flow from Crypto

Crypto Lending

One of the most popular options to earn more from your crypto is lending it and earning interest. The system works the same as traditional cash loans.

Crypto lending refers to decentralized finance that allows you to lend your crypto coins to different borrowers. As a result, you will earn interest in exchange or crypto dividends.

There are a bunch of reputable crypto lending platforms options   out there which pay different interest rates. As a result, you will get a stable return on your crypto.

All you have to do is deposit your crypto funds to a crypto lending platform. And the platform will pay you interest anywhere between 3-7% or even more.

To make sure your funds are safe and secure, borrowers also have the chance to stake their cryptocurrencies as a guarantee of the loan. So in case, if the borrower doesn’t pay off the loan, you will have the option to recover your funds.

Also, crypto lending is pretty attractive, as it ensures passive income against your crypto assets and helps you to avoid market volatility. Plus, you will earn a high interest rate. However, just make sure that you are signing up with a trusted platform for crypto lending.

Crypto Staking

Crypto staking   is another great way to earn passive income through cryptocurrencies. Staking is a complicated idea to understand. However, the simplest explanation would be earning rewards for holding certain cryptocurrencies.

In staking, you have to hold cryptocurrencies that operate on proof-of-stake. When you stake your coins, you are basically lending your coins to the network to validate transactions.

By staking your coins, you are helping the network to validate transactions. Hence, the network rewards you with additional coins or lets you earn interest on your bitcoin   and other crypto holdings

Also, all your staked coins are deposited into a special pool. As a trader, you can validate as many tokens as you have staked at a given time. The more you stake, the greater ability you will have to validate transactions.

Plus, by participating in staking, you will have to hold and lock your crypto holdings in your crypto wallet. Also, you cannot spend your crypto holdings for the staking period of time. At the end of the staking period, you will get rewarded.

Moreover, to earn a massive amount of cash through staking, you have to stake a huge number of crypto assets for anywhere between 10 to 90 days or even more. Also, it requires you to use certain crypto coins only.

So the coins you are holding right now may not be available for staking. Instead, you will need to purchase some other coins.

NFTs That Pay Royalty

In today’s time, NFT tokens   are extremely popular. Also, the future of NFTs is pretty bright. NFT is a concept using blockchain technology that can be used for selling digital arts and other digital items.

While buying and selling NFTs can be a one way process. Like, you create and sell an NFT, and someone purchases it from you, and the deal ends.

But there is also the concept of NFT royalties. NFT royalties help you to earn a percentage of the sale price each time your NFT creation is sold on a marketplace. NFT royalty payments are perpetual and are executed by smart contracts automatically. You can choose your royalty percentage while you list your NFT on a marketplace. Also, depending on the exchange, you can get 5-10% as NFT royalty.

Moreover, NFT royalties will get paid to you automatically on secondary sales. These settings or processes are already coded into the smart contract on the blockchain. So every time a secondary sale happens, the smart contract makes sure that you are getting your royalties automatically.

However, you will need to pre-define all the terms and conditions in the smart contract before you list an NFT on a marketplace.

Also, if you really want to get into NFTs, then you will need to design cool stuff that other people might be interested in owning.

Crypto Arbitrage

Crypto arbitrage is a cool and easy concept to understand which can fetch you amazing profits. In crypto arbitrage , all you have to do is buy crypto from a certain exchange and then transfer your coins to another exchange and sell it there.

For instance, if Binance is selling Bitcoin at $50000 and Kraken selling Bitcoin at $50,400. Then you can buy BTC from Binance and transfer it to Kraken and sell your Bitcoin at a higher price.

Different exchanges have different spot markets selling crypto assets at different prices. As a result, you can always find opportunities to buy cryptocurrencies at a lower rate and sell it at a higher price somewhere else.

However, the only drawback of this is that you have to be extremely fast. As the gap between prices doesn’t really last long. So you have to be pretty quick.

Also, you have to spend a lot of time looking at different coin prices on different exchanges to spot an opportunity. But if you find one, it will surely fetch you a good amount of profits.

Just make sure to calculate transfer charges   before proceeding to avoid losses.

Crypto Trading

Lastly, there is crypto trading. Apart from just holding your coins, you can also trade crypto on a regular basis.

However, to get into crypto trading, you need to know fundamental analysis and technical analysis.

Also, as a trader, your job would be to understand crypto trading risk management   and buy or sell different currencies predicting how the market will move. For instance, if you think that Bitcoin price will go up, you will have to take a long position, which means buying Bitcoins at a lower price and selling it at a higher price.

Alternatively, if you believe that Bitcoin price   will go down, you have to take a shorting position. This means you will be selling crypto at a high price and buy it at a lower price.

Apart from this, you can also trade in futures and options, derivatives, and more.

To start with crypto trading, you will need to sign up on a crypto exchange like Binance or Coinbase.

Also, make sure that the crypto exchange you are choosing has good liquidity, so your orders will get executed right away. Along with that, do look at the fees structure to avoid hefty fees.

Final Words

So those were a few ways to generate cash flow from your crypto holdings. I have explained different methods, including riskier and less risky methods. So do proper research before getting into them.

 

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