Did you know that you could earn interest on the Bitcoin (and possibly other cryptocurrencies) that you own?
Bitcoin has been criticised by certain people in the past for being an asset that does not yield any dividends, but this argument no longer holds any water.
Many crypto investors store their digital assets on exchanges for long-term safekeeping. Doing so means they are assuming counterparty risk, so in my opinion, if you’re going to opt for keeping your crypto on an exchange, you might as well put it to work.
Alternatively, you can store your crypto in cold storage, but you won’t be able to grow your wealth in that way unless your crypto grows in value.
In this post, I’ll show you how you can earn from 8% onwards on your Bitcoin by using the interest accounts on the platforms featured here.
Bitwala Bitcoin Interest Account
This is one-of-a-kind product: it allows you to earn interest on BTC inside a regular bank account.
The interest rate changes weekly, but at the moment, if you deposit your BTC in this account you stand to earn up to 3.95%.
Generating a passive income is automatic; every Monday, you’ll receive interest payments on your bitcoin investment. There’s no minimum investment period to start reaping your rewards and making withdrawals or deposits.
How does this work? Bitwala has partnered with Celsius, a network that specializes in Defi loans. Through this partnership, you can put your coins to work. Instead of holding your bitcoin in your wallet, you invest them for interest.
The Celsius Network was founded in 2017 with the mission to harness blockchain technology to provide unprecedented financial freedom, economic opportunity, and income equality for the 99%. They currently have more than $300M Assets under management from over 40,000 users.
Celsius lend out responsibly from their community’s pool of assets. This means that Celsius only does collateralized loans, and your coins are never “locked up” and you can withdraw at any time.
Interest rates are based on market demand, if borrowing demand is high, Celsius are able to pay a higher rate on that coin. If demand is low, they will be paying a lower rate. Celsius are dynamically changing these rates according to supply and demand. All interest earned on Bitcoin is compounded and paid out weekly.
You can start investing with as little as €10 and you’ll only need to cover the small network feel from the interest received. There are no other fees and you can cash out at any time.
You can withdraw from the BTC Interest Account any time you like, however, interest payments are made weekly on a Monday. Interest is calculated every second, and you will not receive any penalty for withdrawing early – you just will not earn any further interest on the amount you withdraw
All transfers from your Interest Account go directly to your non-custodial wallet – where you keep your private keys.
BlockFi Interest Account
With BlockFi you can earn up to 8.6% on your crypto. The BlockFi Interest Account (BIA) lets you earn compound interest on your Bitcoin, Ether, Litecoin, USDC and GUSD. Simply store your crypto at BlockFi and earn interest paid out in Bitcoin, Ether, Litecoin, USD Coin and Gemini Dollar every month.
Note that this product is focused on USD not on any other fiat currency, and while there is no big downside there, it’s worth noting that if you are using a EUR or GBP based stablecoin. You will need to convert those coins to a USD stablecoin like USDC or GUSD in order to start earning interest in a BlockFi interest account.
Binance Savings and Staking
With Binance, you have several ways of earning money on your cryptos.
The easiest way is probably using their Flexible Savings product. Flexible Savings is your Crypto savings account. Subscribe your crypto to earn interest, with the flexibility to redeem your funds at any time.
To quote a few estimated annual yields available at the moment, we have:
- BUSD at 2.44%
- USDT at 2.11%
- DASH at 1.83%
There are 24 coins you can use for the flexible savings account.
For higher returns, you will want to opt for the Locked Savings product. By subscribing your crypto to locked savings periods you will in return get higher interest earnings. You can choose from several durations depending on the coin you are using, but it’s typically one or more options from the following:
- 7 Days
- 14 Days
- 30 Days
- 90 Days
For example, with BUSD you get an annualized interest rate of 7.42% at the time of writing, while USDT gives you 6.79%. Both of these are stablecoins that can be easily bought from the Binance exchange itself.
The range of coins available for locked savings is more limited, we can only choose between 6 coins: BUSD, USDT, COCOS, ONE, EOS.
You might have heard of staking, which can be used for those coins that use a Proof-of-Stake mining mechanism. With Binance you can stake 24 different coins, with the returns varying significantly between one coin and another. Among the highest yielding are KAVA (14-16%), LOOM (10-12%) and ZIL (8-10%)