27 October 2021
In 2021, everyone agrees on two things: Cryptocurrency values are incredibly volatile, and a hot dog counts as a sandwich. Bitcoin’s recent performance may be a solid example of the sort of volatility that Cryptocurrency has become known for: its price peaked near $65,000 in April before collapsing by more than 30% to about $30,000 in only a few hours on May 19th. Crypto traders are aware of the volatility as they play the long game with the Altcoins they trust. These days, Long-term Crypto traders are taking advantage of a new approach to profit from their investments- Crypto interest accounts.
There are a variety of Cryptocurrency-focused services that allow users to deposit coins and earn interest by putting money aside for the future. Crypto-backed loans and Crypto savings accounts are just a few of these businesses. These are extremely handy methods that can give considerable passive income if you believe Bitcoin’s value will rise in the future and plan to hold it for a long time. Although many of the services may be utilized with a range of different Cryptocurrencies, Bitcoin remains the primary emphasis because it is the Crypto industry’s reserve currency.
What is a Bitcoin Savings Account and How Does It Work?
A Bitcoin savings account is a service that allows you to deposit coins to earn interest and put money aside for the future. An increasing number of businesses are beginning to offer daily Bitcoin interest to investors. It works by sending Cryptocurrency to the wallet of the service provider. They can then earn interest on Bitcoin over time. This is a fantastic new technique for Cryptocurrency HODLers to profit while also storing their Crypto assets. Banks have been offering lower-than-normal interest rates for the previous few years, thereby making the returns unsatisfactory. As a result, many have been looking for greener pastures to resume earning interest. However, there have been little to no possibilities for investors in the Bitcoin sector. As a result, many individuals are searching for other financial service providers. Additionally, Bitcoin interest of up to 6% per year can be earned with Crypto accounts. Clients can also earn Bitcoin compound interest, increasing their annual profits.
Compound interest in Bitcoin: what is it and how does it work?
Simple interest and compound interest are the two forms of interest you can earn from a savings account. Simple interest is calculated on the principal amount invested alone, whereas compound interest is calculated on the principal amount invested plus previously earned interest. This is the reason why compound interest builds our account faster than simple interest. compound interest is credited to your account at intervals determined by the savings account in which you invest. The higher the rate of compound interest, the shorter the time interval. This is because you start earning extra interest on your previously earned interest as soon as it’s deposited into your savings account.
Also read: All You Need To Know About HODL
While shorter periods will help your portfolio grow faster, the difference in earning potential between compound interest deposited weekly and daily is not significant. However, Compound interest intervals are significantly more essential when the interval is quarterly or monthly because the interest you earn during this time will be much more than the interest you earn daily or weekly.
5 Best websites to Earn Bitcoin interest:
BlockFi should be your first pick as a Bitcoin Lending Platform if you want to earn interest on your Bitcoin. They provide up to 6.2 percent annual interest. BlockFi supports the following Cryptocurrencies:
- GUSD (Gemini Dollar)
BlockFi’s highlights include:
- The interest that has accrued is paid out at the start of each month.
- Interest is accumulated monthly.
- You can also trade on BlockFi, For, e.g. When the price of Bitcoin is high, sell it for USDC and then purchase it again when the price is low. In both circumstances, you will be earning interest.
Celsius is a website that offers interest on Bitcoin and other major digital currencies. Interest is paid out once a week, and if you invest in the platform token (CEL) you’ll receive a higher interest rate. These are the coins that Celsius accepts for earning interest
- Bitcoin- 4.60%
- Litecoin- 4.50%
- OmiseGo- 4.25%
- Ethereum- 3.90%
- Bitcoin cash- 3.75%
- Ripple- 2.50%
Highlights of Celsius:
- No minimum deposit
- Withdrawal without fees
- No lock-up period
3. Binance Savings Account
Binance is the best Cryptocurrency exchange in the world, with millions of users. It offers a “Binance Savings'' service that allows you to lend your Bitcoin and earn interest. The interest rate is adjustable, and at the time of writing, it is 1.6 percent estimated Annual Yield. You can also try Binance saving trial fund
4. Compound Finance
Compound finance is a type of decentralized finance in which you can lend a few major Cryptocurrencies and earn interest on them. When you use the compound to lend Cryptocurrency, you are adding funds to the liquidity pool. You’re not dealing with borrows directly; instead, they’re borrowing from the market. Based on supply and demand interest rates are calculated algorithmically (in real-time). Compound finance allows you to lend the following Cryptocurrencies
- 0x (Zrx)
Right now there are only two Stable coins supported by Compound Finance:
Highlights of Compound.finance:
- It is an Ethereum-based blockchain protocol
- No locking period.
- Interest charges are based on supply and demand.
- Interest is paid after every ETH block confirmation (every ~15 seconds)
Also read: Financial Crisis And Its Effect On Bitcoin
This is another excellent tool that allows you to earn interest on stable coins. Interest is paid out daily, and you can earn up to 8% interest. Nexo supported coins are:
- All major Stable coins are supported
- Instant deposit and withdrawal are available
- No locking period
- 100% asset-backed guarantee
- Custodial insurance of $100 million by BitGo and Lloyd’s of London
- Business audited by Deloitte
- Withdraw instantly from your wallet with no fees.
Disclaimer: The author’s thoughts and comments are solely for educational reasons and informative purposes only. They do not represent financial, investment, or other advice.