Do not miss out on the best crypto strategies to make passive income during this recession. Crypto is the future of finance and is already disrupting the way world governments and central banks do business.
After years of spreading lies and downplaying the potential of Bitcoin and Crypto, many of the largest banks are pivoting to Crypto.
Just five years ago Larry Fink, CEO of Blackrock said:
Fast forward to 2022 and Blackrock, has opened crypto investing to some of their clients. Go figure.
So how can you capitalize on this downturn even with all the rug pulls, implosions, and blood in the streets? Well here is a handy guide on where to keep your crypto safe and fertile during this bear market.
1. Use a Cold Wallet.
Using a device like a Ledger or Trezor for offline crypto storage is simply the ONLY way to be sure you own your crypto. If you keep it anywhere else like Coinbase, Binance or Robinhood, it is at risk of being hacked or in the case of Celsius…stolen by the company itself.
Use the full power of blockchain and hold the keys to your assets, otherwise known as a seed phrase. You’ll earn no interest but you’ll have the asset ready to go when the bull market returns. Using a cold wallet means you are taking full custody of your crypto assets.
You are your own bank. If the thought of being your own bank makes you nervous or sounds like too much of a hassle, then I’m afraid crypto is not for you.
2. Stake Your Tokens
All of the top 25 altcoins have a wallet that is native to their blockchain. It’s the one that the developers made specifically for that token and is usually open source code that is highly vetted throughout the industry.
For some of them though, like Cardano, Avalanche, Tezos and Polygon you are able to earn rewards by “staking” your tokens directly in the wallet to participate in the day-to-day functionality of that blockchain. Your tokens are locked up for a period of time and for that you are rewarded with more of that token.
The rewards vary from anywhere from 3-8% depending on the node you join and the tokens you have. This is a great way to accumulate more tokens in projects you are invested in so when the bull market returns, you’ll have more dry powder to work with.
3. Earn Rewards
The lending and earning of crypto has fallen on hard times this year. Thanks to Luna falling apart and taking down a bunch of lending platforms with it (Vauld, Voyager, Celsius, 3AC), the big returns in crypto earning has been put on ice.
But before we go on I should probably answer your question about what is “earning” crypto actually is. Simply put it’s similar to staking, but the return is usually higher, it can be done with almost any crypto, and there is usually no lockup.
For example you can put in some Ethereum and earn 8% a year while the exchange lends your crypto to someone else at a higher interest rate. Last year this was seen as a relatively safe way to earn great returns, but ever since the aforementioned Luna collapse, it’s considered to be riskier than just regular staking.
The rule of thumb is that if the returns are higher than 10%, it’s probably a scam. The risk is there, so be cautious with how much you are putting in. Most reputable exchanges like Coinbase and Gemini will give users earn rates around 6% on a stablecoins like USDT or BUSD. That’s a heck of a lot better than leaving your money sitting in a savings account to get sucked dry by inflation.
Decentralized Finance or Defi is the forbidden fruit of crypto: a gateway to making insane returns but also the risk of a descending into madness.
It is one of the most volatile forms of making money in crypto so be very aware that at ANY time, the assets you are investing in could be hacked, swiped, burned, rugged or blocked and you’ll end up with nothing but a sad story and an empty wallet.
Defi exchanges like Uniswap, Pancake Swap and Raydium have all sorts of exotic financial tools to extract maximum returns for their users. It’s not uncommon to see returns of 300% APY or more. But I cannot stress this enough: DeFi in its current state is risky.
Choosing a token or pair of tokens for high returns opens you up to all the risks I’ve mentioned above including a bonus risk of Impermanent Loss. Defi is not for the faint of heart. It takes dedication, attention, thorough research and calculated profit taking.
It’s not the crypto equivalent of gambling, that’s leverage trading, but it’s damn close.
If you have a few extra bucks to play around with, Defi has the potential to make you a profit. But the real advantage of playing in the Defi space is that you learn about crypto, the projects, and the market behavior faster than most.
Part of that learning is losing. It’s the price of admission. Don’t get cocky. Take profits. Do your own research.
That's the lay of the land in crypto in 2022. With the economy in a recession (depending on who you ask), inflation raging and global conflicts brewing, there is a shakeout happening for people who are paper handed.
That means if you have a long term wealth mindset you can be in the right position to start making the moves that will set you up for success for years to come.