2020 and 2021 have been two amazing years for cryptocurrency. If you had bought Bitcoin you would have experienced some amazing gains. But did you know you could also be earning passive income from your cryptocurrency?
These days high interest savings accounts are no longer “high” interest. But the equivalent accounts for crypto can pay up to 12% APY. Here is how I’m earning interest on my cryptocurrency.
Earning Interest using YouHodler
YouHodler offers a savings account for crypto. You simply transfer your crypto to your YouHodler savings account and it will start earning interest instantly. The interest is paid weekly.
You can withdraw your funds at anytime. Just remember that you’ll pay a network fee (depending on how congested the blockchain is) to move your crypto. If you do want to cash out, you can send your coins to CoinSpot and sell them for AUD.
How does YouHodler pay interest? Well borrowers can take out crypto backed loans through the platform. The interest they pay is passed onto you. And because loans are backed 100% crypto it reduces the risk.
What can you deposit?
You can deposit a huge range of assets on YouHodler. I’ve deposited stablecoins (Dai, USDC and USDT) on Youhodler as they currently pay the highest interest rates.
Is this secure?
Like anything to do with crypto there is risk. I believe the main risk is YouHodler getting hacked. To help combat this, YouHodler has an insurance fund to cover these losses. However I’ve chosen to keep my Bitcoin stored securely in my offline wallet. And instead I’ve deposited some surplus stablecoins. These coins would have been sitting around doing nothing. I may as well earn passive income from them.
How to Buy Crypto to Transfer to YouHodler
If you’re looking to buy crypto to earn interest on, then I recommend CoinSpot. It is a legit Australian crypto exchange is one of the cheapest ways to buy Bitcoin in Australia. You can also buy a number of stablecoins like USDC and Tether on CoinSpot. These coins earn the highest amount of interest on Youhodler.
The best YouHodler alternative is Blockfi. While there are a number of other companies out there that offer similar crypto savings accounts, I’m only trust these two. Blockfi is based in the U.S and backed by some prominent venture capital firms. They plan to be the crypto bank of the future. Unfortunately they don’t offer interest rates that are quite as high. However their BTC savings rate is much higher than YouHodlers.
Start Earning Passive Income with your Crypto
While I wouldn’t send your life savings to YouHodler, it’s a great way to earn passive income on small amounts of crypto. I can see products like Youhodler becoming more and more popular and genuine alternatives to traditional savings accounts.
I’m using YouHodler to put a little bit of money in and then set and forget it for a couple of years. I consider this a higher risk investment (just because anything in crypto is riskier).