If you are considering expanding your investment portfolio with the addition of crypto assets, NFTs, or other blockchain-related assets, you are not alone: Investor enthusiasm in the digital space appears to continue to grow.
Whether you are buying stocks, goods or cryptocurrencies, the goal of the game for all investors is to generate a return. For many, generating a passive income stream will be a key objective of their investment strategy. But is this possible with crypto assets? The answer is a resounding yes.
What is crypto and why should you invest in it?
Before diving into passive income options, it's worth taking a step back to answer a simple question: why should you invest in crypto assets in the first place?
In essence, crypto assets hold the promise of an entirely new decentralized payment system that is, in many cases, made possible by blockchain technology: the digital ledgers used to record transactions. And for many investors, interest in the technology and philosophy behind crypto assets is one of the main reasons they choose to support and invest in them.
The other main motivation for buying Bitcoin, Ethereum, and XRP is their value. Of course, while the current value of a particular crypto asset is not an indicator of its future value, some of the mind-boggling increases that many assets have experienced in recent years cannot be ignored.
For example, between November 1, 2020 and November 1, 2021, the price of Bitcoin increased from around AU € 19,000 to around AU € 81,000.
What should you look for when investing in crypto?
It can also be helpful to understand the uses of each crypto asset and the applications of its associated platforms. While coins and tokens are part of a larger basket of 'crypto-assets', there are substantial differences in the business cases of the platforms that underpin them, i.e. Ethereum's intended applications are not the same as Cardano's. Ultimately, these distinctions could have an impact on the value of the native coin.
Ultimately, finding the 'right' crypto assets to invest in should be a personal decision, based on both the research you've done and your risk appetite as an investor.
How can you earn passive income with cryptocurrencies?
Making passive income is simply a way to earn a source of income without putting in the "active" effort you put into your day job. For example, investing in stocks that pay dividends or buying investment properties that generate rental income are common ways to generate passive income.
Believe it or not, it is also possible to earn passive income through crypto assets. There are several methods of doing this, including earning "dividends" on certain currencies or earning interest by lending specific currencies. And then there is the bet.
Simply put, staking is a way for owners of specific crypto assets to increase their total holdings just by owning the asset. Owners can 'stake' their crypto assets for a fixed amount of time, and the staked assets are used to help maintain the integrity of the blockchain. In return, participating holders can earn rewards (usually more crypto assets).
So how can you bet? Well, if you have the time and technical knowledge, it is possible to bet on your own, but everyday investors may find it easier to use a multi-asset investment platform that offers crypto assets like eToro, which offers betting and it will do the trick. the leg works for you.
Buying crypto assets on eToro
If you've done your research and decided that it's time to add crypto assets to your portfolio, your next step will be to find an exchange to trade.
With the eToro online platform, investors can trade a variety of crypto assets, including popular assets such as Bitcoin, Ethereum, Litecoin, Cardano, XRP, and Dogecoin. Additionally, Cardano or Tron holders can start their own passive income stream using eToro's dedicated betting service.
Please note that like most platforms, buying and selling crypto assets has costs on the eToro platform. There are also separate costs for wagering, as eToro keeps a small percentage of your wagering performance to facilitate the process; You can read more about betting fees here.
Ready to start investing? Access the eToro trading platform by creating a free account today.