How to Make Money from Crypto in a Bear Market
Since reaching its new all-time high in mid-November, Bitcoin’s been either going down or sideways for almost 2 months. Whenever Bitcoin goes down, the whole crypto market follows, and even gaming and metaverse-related altcoins started sinking eventually.
Times like this really highlight the benefits of holding tokens which can generative passive income through staking, providing liquidity, etc. I’m not talking here about projects like Wonderland, Olympus, or Jade Protocol, which promise 80,000% APY or more (there will be a separate article about those) but more ‘sensible’ projects with a solid long-term potential.
Although there are different ways of earning interest on your crypto, usually, the most straightforward one is staking. Not every token can be staked, and the terms of staking can vary a lot.
Make Sure You Always Check the Following:
Staking period — it can be flexible, but it may also be fixed, often for 7, 14, 30, or 60 days. Sometimes it may be even a few months.
Cost of staking and un-staking — especially important on Ethereum blockchain due to potentially high gas fees.
Can you un-stake early? (most likely yes, but you will lose some or all interest earned)
APY — this can vary greatly, from around 5% to over 50%, but the higher rates are often only available if you lock your tokens in for a longer period of time.
Do you retain custody of your tokens? In other words, are they still in your wallet but staked, or do you have to transfer them out of your wallet. (very often, it’s the latter)
Is there a minimum amount required for staking? (for example, this is true for Verasity or COTI, but the required amounts vary greatly)
Here are the tokens I’m currently staking — and also a good comparison of different staking models:
Cardano (ADA) — needs no introduction. Very large market cap and one of the safest long-term projects. There are countless staking pools you can choose from (you can find the list here — https://adapools.org/), and you can expect around 5% APY. You can stake and un-stake whenever you want, and the rewards are paid out approximately every 5 days and added directly to the balance in your wallet. There’s no need to transfer the tokens out of your wallet — you simply authorize staking, so you retain the custody of your tokens. As it’s on the Cardano blockchain, the fees are close to none (around $1–2).
Seedify Fund (SFUND) — you have to stake SFUND to participate in their IGOs (as long as you have minimum 1,000 SFUND tokens). Staking periods are 7, 14, 30, and 60 days, and APY is 5%, 11%, 25%, and 55%, respectively. The tokens are transferred out of your wallet, and the fees are below $1 as it’s on Binance Smart Chain.
Verasity (VRA) — the tokens can be staked in your VeraWallet (but you have to transfer them there from your MetaMask or an exchange), and you earn your rewards daily at 0.07%, which equals 25.5% per year. You need a minimum of 10,000 VRA to be able to stake it, but at the current price of $0.035 (at the time of writing), this equals $350, so it’s pretty reasonable. It’s on the Ethereum blockchain, so just bear gas fees in mind.
Conclusion
Let’s be honest, you probably won’t be able to live just from this passive income unless you stake A LOT. Nonetheless, it allows you to add more to your portfolio even when the market is bearish, and you will reap the true rewards once the market starts picking up again. And of course, it beats the hell out of any savings account offered by any bank ;-)
If you found this article interesting, please check out my YouTube channel — I post market commentaries, my thoughts about various altcoins and NFTs, and tutorials for beginners and more advanced users. I also mention a lot of altcoins and NFTs on my Twitter.
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Disclaimer The content covered in this article is NOT to be considered investment advice. I’m NOT a financial adviser. These are only my own speculative opinions, ideas, and theories. Do NOT trade or invest based purely upon the information presented in this article.
Originally published at https://hackernoon.com on December 23, 2021.
