From :: https://medium.com/altcoin-magazine/list-3-ways-to-earn-interest-on-your-bitcoin-c060d843d70a
List: 3 Ways To Earn Interest On Your Bitcoin
By Cryptocoinzone on Altcoin Academy
We have tested many different ways to earn an interest in Bitcoin and cryptocurrencies. There are many scams and Ponzi Schemes in this industry so it´s important to not putting money into the first, best option you find on the internet. We will list three different ways in which we earn passive income on our Bitcoins.
Note: There is always a risk of investing and especially with cryptocurrencies where there are many fake companies. Even companies that seem serious may not be serious and accounts can be always be hacked.
In this article, we present BlockFi and Celsius which offer a relatively new type of service. They offer loans supported by cryptocurrencies as collateral. In addition, we present Bitfinex which also offers interest but for margin lending on their platform. With Bitfinex, you have the opportunity to get a better interest rate but you have to spend more time.
BlockFi — Crypto Interest Account
BlockFi offers their BlockFi Interest Account (BIA) and this allows you to earn up to 6 % annual interest on your crypto assets. This is a perfect way to earn passive income on your Bitcoin or Altcoins if you apply HODL strategy. BlockFi pays interest once a month and supports Bitcoin, Ether, and GUSD for their interest rate accounts.
BlockFi generates the interest rate by lending the assets to loyal institutional investors and corporate borrowers. They secure the loans by lending crypto on overcollateralized terms and in addition, BlockFi has an automatic risk management system that monitors the loans 24/7. BlockFi has the possibility to terminate a loan earlier and also holds reserve balances in order to be able to accommodate withdrawals from interest accounts.
Go to BlockFi
Celsius — Crypto Interest Account
Celsius is a mobile app that offers a similar service as BlockFi. They offer interest account of 15 different cryptocurrencies such as Bitcoin, Ethereum, XRP, Bitcoin CASh, Litecoin, OmiseGO, 0x, GUSD and more. With Celsius, you can earn up to 10% annual interest and Bitcoin gives 6 % annual interest.
Celsius offers you to earn a higher interest rate if you accede to payout CEL tokens. Celsius pays the interest directly in the app and it is counted from Friday to Thursday and paid on Mondays, every week.
Coins are lucky in BitGo and are lent to funds, trading venues and institutional investors to generate interest.
Go to Celsius
Bitfinex — Margin Lending
Bitfinex offers a product called margin lending. This means that you make your cryptocurrencies, or fiat currencies, available for margin traders on the platform. This is peer-to-peer lending without an intermediary. Bitfinex charges 15% of you earned interest for providing the platform.
Example:
- You have 1 Bitcoin in your account.
- A trader also has 1 Bitcoin in his account but wants to trade with 2x leverage. That is, this trader wants to take a position worth 2 Bitcoin but has only 1 Bitcoin
- This trader must then borrow 1 Bitcoin. You have placed 1 Bitcoin on the Bitfinex funding platform where you also specify the interest rate you want and how long you can think of lending it (2–30 days). You request a 0.001 % daily rate of 30 days.
- The trader accepts your offer and lends 1 Bitcoin to 0.001 % daily rate with a maximum of 30 days. (The trader can return the money earlier than 30 days).
- After this, you have to redo the process and that is what is negative about this process. It is possible to partially automate the process by specifying the minimum interest rate you accept and how many days you must agree to lend your money.
The interest rate on Bitfinex can vary very much from day to day, but on average, the interest rate seems to be around 5% on an annual basis for Bitcoin.
Go to Bitfinex
Summary — Earn Interest on Your Cryptocurrencies
We have tested all platforms and BlockFi and Celsius are relatively new. Bitfinex we have been testing for a long time. We are the ones who like to test different platforms and at the same time diversify to reduce the risk. At the same time, we are aware that many just want one platform because they cannot spend time diversifying or testing different platforms. If we had to choose one of these we would go for BlockFi. However, BlockFi only offers interest on Bitcoin, Ethereum and GUSD. Celsius offers interest on more cryptocurrencies and Bitfinex on even more through its margin lending.
Are you interest in more ways to earn passive income on Bitcoin?
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