How to Earn Interest from Bitcoin
Bitcoin is very volatile, which means bitcoin price can be at a certain amount by morning, and before the end of day, the price could have risen or fallen.
Regardless of the fluctuation in the BTC price, you must be wondering how to earn interest on your bitcoin while it’s sitting in your wallet.
Although, earning interest in bitcoin and the return on Investment you will be getting depends on the platform you are using to invest, there are lots of platforms out there where you can lend out your bitcoin and earn passive income. Before we talk about some of them, let’s discuss what bitcoin lending is all about.
Find out how to make money with yield farming.
What is bitcoin lending?
Over time, lots of bitcoin Hodler just keep their coin in their wallet and wait for it to grow. After some time, exchanges began to think of how they can make their users earn more from their investments while HODLing. This thought gave birth to the idea of crypto lending.
Bitcoin lending is similar to regular fiat lending, where you lend out a certain amount of cash to someone in need, and then it accumulates interest of a specified percentage over time.
Bitcoin lending is done on a lending platform that acts as a trusted intermediary between the lender and the borrower. The lender drops a certain amount of Bitcoin to the lending platform to yield interest, while a borrower comes to borrow some or all of the funds with collateral.
The lender permits the bitcoin lending platform to lend his or her money out to earn some interest, and just like that, the transaction is complete. There will be an agreement on the percentage of interest the borrower will pay back, and the lender and the lending platform split the interest paid by the borrower.
Is bitcoin lending safe?
The only issue with bitcoin lending platforms is centralization.
Centralization in bitcoin lending can be a disadvantage because a third party controls the transaction, which makes it deviate from the true purpose of bitcoin, which is decentralization. The third-party regulates and collects pieces of information of both the lenders and the borrowers. As a result, these information can be stolen by hackers and sold out.
Centralization also has its own advantages because the platform helps regulate and ensure that the bitcoin is kept safe. The platform also ensures that collaterals are collected, and loans are paid back with interest. They keep an insurance policy against losses.
Why do you need to use bitcoin lending platforms?
The answer to the question of why you need to use any bitcoin lending platform is simple. Everybody would like to earn passive income, that’s making money while we are asleep. Passive income requires less stress and anxiety. You can earn while on a vacation and doing what you love.
Bitcoin lending Platforms
There are several bitcoin lending platforms where you can lend your bitcoin to earn interest, but here are a few trusted ones.
BlockFi is a crypto exchange platform that allows you to lend and borrow Bitcoin. If you wouldn’t want to go through the stress of selling your BTC whenever Bitcoin price starts plummeting, all you need to do is to make your assets available for lending. This allows you to earn up to 8.6% yearly on your bitcoin portfolio. As a borrower on Blockfi, the lowest amount you can borrow is $5,000, but you need to have about 50% of your coin as collateral.
The second crypto wealth management platform on our list is Nexo, which was created in 2017. And just like Blockfi, Nexo also has a loan platform for BTC HODLers who don’t want to liquidate their assets yet because of future profit, but needs urgent funds. So, one can take a collateralized loan from Nexo and get a loan worth 50% of their bitcoin assets.
Unlike Blockfi and Nexo, Coinloan is not a company but a P2P crypto lending platform for crypto-backed loans.
It has one of the friendliest user interface with frictionless and transparent transactions. Coincola collects no transaction fees from your transaction. It only collects a commission from the transaction. It allows you to lend out and earn interest.
This is another bitcoin lending platform that allows you to lend out your bitcoin and earn interest. It leverages PayPal for payment at different interest levels.
It is a P2P lending platform, just like Coinloan. The good thing about this P2P bitcoin lending platform is that you get to set your rates as a lender, and as a borrower, you have the liberty to choose from many options.
- BTC POP
This is the fifth platform on our list. It was established in 2014. BTC POP is also a P2P lending platform which allows both the lender and borrower to set their rates and pick the best interest percentage favorable to them.
These are the few bitcoin lending platforms we will be talking about in this article. However, each one has its pros and cons depending on your preference. Besides bitcoin lending, you can also earn interest on altcoins like ether, litecoin, etc., via an impressive feature on remitano p2p exchange called the Remitano Invest.
Remitano invest is an awesome feature that allows you to easily manage your crypto investment and allows you to earn interest on your altcoin investments. You can swap your USDT (tether) to any altcoin you choose to invest.
In conclusion, if you would like to earn interest as you are holding your bitcoin, you can consider the bitcoin lending platforms listed above. On the other hand, if you would like to earn interest from your altcoins, you should definitely check out Remitano Invest.
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