The dizzying peaks and troughs of the world’s leading cryptocurrency have dominated the headlines in 2021, which has undoubtedly been one of the most exciting years for crypto assets so far. BTC reached new heights in April 2021, pushing past $61,000 for the first time, before plummeting to $33,000 just over a month later, with its price seemingly being driven largely by the whims of Elon Musk.
All of this has served to underscore the inherent volatility of crypto assets generally, something that has perhaps been best demonstrated by the abrupt and rather unceremonious collapse of the NFT market. Despite these negative headlines, a sea-change could be occurring within the crypto space that could shore up the long-term viability of assets such as bitcoin. This is the shift away from bitcoins as investment assets towards bitcoins as sources of passive income. Read on to learn more.
How Bitcoins Earn Passive Income
Even among more informed crypto adherents, relatively few people are aware of how investors can make passive income from crypto assets. Most people simply assume that all of the money-making opportunities from bitcoin come from its price fluctuations against the dollar. However, this is not the whole story.
A quiet change in recent years has been the rise of stablecoins such as Dai.com, which are pegged to a fiat currency like the US Dollar and can thus earn interest in the same way that money in a regular bank account would do. A fair stablecoin has been described by entrepreneur.com as the missing element of crypto.
Meanwhile, some platforms are offering interest on BTC as a means of enticing crypto users to choose to hold their coins with them. All of this is potentially helping to shift currencies such as BTC away from the realm of speculative assets towards a more low-risk, long-term investment.
New Platforms Allow for New Opportunities
For those looking to avoid the low returns of stablecoins and instead earn interest from established coins such as bitcoin, there are new platforms that are seeking to do just that. The rise of so-called “crypto savings accounts” offers guaranteed interest rates for all customers who hold their coins in that account.
As explained by the experts at BuyBitcoinWorldwide.com, major savings account providers such as BlockFi and Ledn can offer annual interest rates of up to 12.5% – this is considerably higher than the interest rates that any traditional bank could offer for your cash deposits. Interest can be paid in dollars or in crypto and can allow anyone to derive passive income from their coins.
Institutional Investors Go All-in
It’s clear that interest-focused bitcoin accounts are growing in popularity, but what do the financial bigwigs think? As it turns out, they’re supportive of it. According to HBR.org, major institutional investors such as Goldman Sachs, Citibank, and JP Morgan are now entering the passive crypto income market as a means of offsetting the effects of record-low Fed interest rates, explained at investopedia.com.
Meanwhile, the payments giant Visa has partnered with the digital bank Anchorage to begin offering commercial crypto services that could include APY crypto accounts in the near future. It seems that the world’s largest financial investors are putting their money on crypto interest yields.
So, will it become mainstream for customers to earn interest from crypto? While this remains to be seen, the signs are currently more positive than they have ever been.