You’ve no doubt been impacted by the CoronaVirus. Everyone has. But not everyone has been impacted to the same severity. Some people have lost their jobs or will lose their jobs. If you’re one of those people and you also own …should you sell it? Or could you make it work for you?
Your first instinct may be to sell your crypto. After all it’s very volatile and there’s no big government to bail it out. Cryptocurrency is a pure market, trading 24/7 and driven by the fear and greed of the masses. If the economy collapses, you might think digital assets will too.
But in this article we’ll examine reasons cryptocurrency will stick around — and how to let your cryptocurrency work for you when you might not be able to.
1. Let Your Crypto Earn Interest For You
There’s a popular term in cryptocurrency. No doubt you’ve heard it many times: HODL.
An article from Cryptomaniaks puts it this way:
“HODL: Hold On For Dear Life. It means that no matter what the markets are doing, even if they are burning to the ground, you hold on.”
But is this the time to be HODLing? Now, during CoronaVirus and the coming recession it will cause?
The answer could be: yes.
These days, some of the best bitcoin lending sites reduce your HODL stress by allowing you to earn interest on Bitcoin by making bitcoin loans.
That’s the key: you can earn interest on your bitcoin and altcoin.
Now, you don’t lend it out yourself. You simply deposit your cryptocurrency with one of the lending sites — they take care of all the lending, collecting, and securing of everyone’s funds.
Of course, the crypto space is notoriously rife with scams and hacks. And your crypto won’t work for you if it’s stolen. So be sure to do your due diligence in studying these lending platforms.
The article above does a decent job comparing the top three cryptocurrency lending sites. They have insurance on your funds (like the FDIC insurance for bank accounts in the U.S.).
Other items to compare — appropo to this article about bitcoin and altcoin working for you — is just how much you earn when you let your crypto work for you.
Various cryptocurrency lending sites have various rates of interest they charge people borrowing from them — and this of course directly affects how much interest they offer you, the lender, to earn from the digital asset you deposit.
Rates you can earn by letting your cryptocurrency work for you range from 3.3% all the way up to 8% APR.
But who is borrowing in this crisis?
Who isn’t? There are plenty of people affected by the Coronavirus and the recession it’s causing. Many of them will not want to give up their cryptocurrency holdings because the bounce back up will be tremendous. But they do need to borrow a bit of liquid fiat to pay their bills.
When someone wants to borrow fiat to pay their bills — but doesn’t want to liquidate their holdings — they go to one of these lending sights. There they complete KYC, put their own digital currency as collateral, and are then given fiat.
Who do they borrow from? You
When you let your cryptocurrency work for you in this way, you use the lending platform and earn interest from the people doing the borrowing. And you’re safe because if bitcoin or altcoin falls, then the borrower’s collateral is sold to pay you back.
It’s a fascinating new system.
1. Let your crypto earn more crypto for you
A second way to let your cryptocurrency work for you is by using it to earn more of the same crypto.
It’s called staking — and no it doesn’t involve cooking steaks.
Staking coins involves participating in a type of consensus protocol. The bitcoin and altcoin you choose to stake runs on a consensus mechanism instead of Proof-of-Work.
Bitcoin, Litecoin, and other major altcoin’s work using POW. They need expensive ASIC machines to secure the blockchain. They reward the people running these machines with more of the coin they’re working on.
Coins with a consensus mechanism use Proof-of-Stake. Instead of running ASIC machines gobbling up electricity — you tell the network to use your coins as a form of protecting the blockchain they run on. You can read more at the Binance Academy.
By choosing to stake your cryptocurrency you get guaranteed returns — which translate into a predictable source of income.
Plus, you don’t have any equipment to worry about. No equipment will depreciate or break or catch fire. Your staked coins will function until you pull them out.
This makes proof of stake coins more environmentally friendly, easier to deal with, and probably one of the better ways to let your bitcoin or altcoin work for you.
A couple of the top places to stake your coins are:
Binance: They offer 21 coins for staking with interest rates from 1% to 16%
Trust wallet. They offer 8 coins for staking and more coming soon.
More places offer staking too — you just need to find them and do research about which is best for you.
Let Your Crypto Work For You Instead of Selling.
2023 is proving to be a tremendously difficult year for crypto-heads. BTC flash crashed by 50% and other alt coins fell by even more. But don’t despair. Keep a level head. In times like these the opportunity to earn money is greater than ever.
If you sell your bitcoin and altcoin because you absolutely need the liquid cash — then that’s understandable. But if you sell it because you fear the sky is falling and the world is full of doom — then step back from that ledge, my friend.
Let your crypto work for you in 2023 and in a few years when the economy is back on its feet — you’ll have more than when you started. Good luck out there and do your research!