Can you make passive income with Bitcoin?

If you’re one of those people who reads the ending of novels first, here’s something for you:

“Yes. You can make passive income with Bitcoin. In fact, it’s one of those smart passive income ideas you’re always reading about on the Internet.”

Now we’ve got that out of the way, the big questions are: Should you? How would you? And what is passive income?

One way of looking at “passive income” is this: it’s any income you didn’t swap a part of your lifespan for. “Active income” is when you swap your hours for money. Passive income is when you create or do something that results in income (and hopefully keeps generating it).

It’s almost impossible to be wealthy without passive income because you have a limited number of hours to swap for money.

“Passive” doesn’t necessarily mean “no effort”, though. In theory, writing an e-book and launching it on Amazon is passive income. But you need to write a book that people want to buy. This requires time, effort, skill and money for promotion. There’s no “per-hour rate” earnt for that process, and most authors will never earn more than they would from active income from a job.

However, there are some sources of passive income that can sit quite happily alongside whatever you do to earn an honest living. These generally involve making your assets work harder to generate an income stream.

In this case, we’re looking at how you would use Bitcoin to do that. We’re also looking at some factors to help you decide whether it’s something you want to do before you actually buy any!

What is Bitcoin?

Bitcoin is a virtual currency created in 2009 with the goal of growing an alternative financial system that wasn’t at the mercy of Governments and the big banks. These days, it co-exists with them. It’s a store of value.

Earning interest on Bitcoin

Cryptocurrency has a reputation for vast profits, but that was always only for the lucky. However, the market does offer much better options than traditional finance through an increasing number of reputable companies, and friendly apps/websites designed for newcomers.

As a leading provider, we at GCISL provide what are, essentially, Bitcoin investment accounts, with interest that is paid daily and can be tracked per second. This earns you more Bitcoin over time.

Over the long term (and I mean long), Cryptocurrencies have tended to go up in value. This is partly because of increased demand, and partly because of the scarcity built into their design.

If volatility makes you nervous, Cryptocurrency does have an answer for that: stablecoins. That is: virtual currency tokens that track the value of a real-world asset, representing them in the digital realm. The most common stablecoins track the US Dollar, but there are coins tracking other assets such as the Euro, the Pound, the Yen and even Gold and Oil. The best providers of these Crypto-interest accounts allow you to deposit Bitcoin and earn interest against them (up to 15% on at GCISL, for instance).

Talking of value increases, here are some ways to make passive income with Bitcoin…

HODL (“Hold on for dear life”) Strategy

When you buy any Crypto at all that’s not earning interest, this is the default setting: any money you make will be from the Crypto going up in price and then (and this is crucial!): selling it to realise that profit.

As Crypto tends upwards in the long-term, while being quite volatile in the short-to-medium term, you’re not earning extra coins.

Trading (usually at a Cryptocurrency exchange)

In theory, you buy low and sell high! Sounds easy, right? Well, anyone who’s traded for any length of time will tell you that trading properly is generally a nerve-shredding experience: there’s no safety net.

Mining

You may have heard that Bitcoin is “mined”. Bitcoins come into existence when a mathematical puzzle is solved by a computer to a specified degree of accuracy. There can only be 21,000,000 of them, so the difficulty of the puzzle is ramped up every so often, which requires all the miners to upgrade their equipment. In the early days of Bitcoin, you could mine it with a laptop (it was also worth very little at that point), but these days it requires special optimised equipment, which is also power-hungry and noisy.

There are mining companies that allow you to buy some of their mining power and share some of their rewards, and if you have your own equipment you can join a mining pool (it’s almost newsworthy now when someone who is not in a pool mines a Bitcoin).

The calculus about mining is that the benefits outweigh the cost, but it also requires substantial outlay to make anything: either by renting mining power (called “hash power”), or by buying equipment and having a really good look at moving next to a waterfall. 70% of Bitcoin mining is using renewable energy, and increasing all the time with the energy prices going through the roof.

Summary

For newcomers, the most obvious way to earn passive income from Bitcoin is to find a platform to earn interest, decide whether you’re happy with Bitcoin or would prefer the security of stablecoins, do due diligence on your provider, and start earning.

Here at GCISL, we are a top provider of Crypto interest accounts. It’s free to join, you get $100 bonus for signing up. There’s a 10% referral bonus (terms and conditions apply), and you can buy Crypto and stablecoins in our website through our payment partner Transak. Our system calculates interest per day so the compound interest keeps on building. We’re an Authorised Digital Assets Provider and adhere to anti-money-laundering laws, too: if a company doesn’t, run a mile!

Good luck in your passive income with Bitcoin quest! We’re all counting on you! So what are you waiting for, start earning interest on your Bitcoin with GCISL today.