Passive Income With Bitcoin
Bitcoin is unlike most cryptocurrencies out in the market today. It is a proof-of-work chain that passive rewards can only be made through mining for the time being. While with many of the proof-of-stake chains, you are able to stake your coins to help secure the network and be rewarded interest for doing so. That staking is built into the protocol, and is a safe way to earn a passive income with your crypto. Once the Ethereum merge has taken place, you will no longer need to lend out your ETH to earn a passive income, but will be able to stake it instead. A much safer option. No such option exists for Bitcoin. And that is why these CeFi lending options were so appealing to Bitcoin owners. While I attribute my dollar cost averaging strategy and taking advantage of price dips a large reason for why I've been able to accumulate Bitcoin quickly. But truth be told, perhaps the largest reason is that I've been able to earn a large passive income from lending out Bitcoin.
No matter how large of a supporter of these services that I was, I was still always skeptical and maintained no loyalty to them. Part of me still never trusted them. At the first sign of trouble, FUD, or rates being lowered to levels that made the risk no longer worth it to be. I would instantly withdraw my funds and find a different service, or put them into cold storage. My CeFi Bitcoin lending journey began with BlockFi, and then moved to Nexo and Celsius. I would then move on to Ledn, and also experiment with Vauld. For various reasons my opinion on those service would become sour and I withdrew my funds. I currently use FTX US to earn a decent income from my Bitcoin, but still maintain no loyalty.
The last few months in the crypto market have been nothing less than chaotic. The de-pegging of Luna and UST and eventually going nearly to zero was the initial event that sent shockwaves across the Industry. It also would be the even that cause dominoes across the market to go down as well. Soon after we would hear news of Celsius being insolvent, and then 3AC, next was BlockFi, Voyager, Vauld and the list goes on and on. With all of that said, it appears that perhaps the constant forced selling pressure could potentially be coming to an end, and Bitcoin's price is currently beginning to finally recover slightly. No one knows where the price will go from here. It could go up, or down. But one thing is for certain. Earning a passive income by lending out your Bitcoin on CeFi services could be finished for the time being. Or at the very least, all confidence in these services have been lost for the time being.
So what is a person who wants to earn a passive income with their Bitcoin supposed to do?
The last few years, before this whole recent mess began. We had a real sweet gig going. It was incredibly easy to just click a few buttons and begin lending out your Bitcoin for a passive income. It was the norm to find rates of at least 6%, and if you did a little research, you could find places that were even higher than that. When these services first began appearing a few years ago, I was extremely skeptical. You had to give up the keys to your coins and the rates seemed too good to be true. How were they able to pay those high rates? And so I sat on the sidelines for quite a while, and waited. During this time I remained skeptical, and was waiting for the worst to happen. But that doomsday scenario never came. And so I began to dip my toes into the bitcoin lending game, and began to use these services. And I quickly became hooked. After all, it was incredibly easy money. Especially during the bull market, when Bitcoin and other coins were going up by 10-20x or more. During the last few years, I have used nearly all of these services that are available to lend out Bitcoin. If you have followed my monthly crypto earnings articles, you will know how big of a supporter I was of these services.