The cryptocurrency is a multi-billion dollar industry that has attracted many investors in the past decade. There are thousands of cryptocurrencies that were born after the introduction of Bitcoin. This encouraged the investors to invest in multiple cryptocurrencies at once enabling them to gain more profit out of each cryptocurrency. These multiple investments have also allowed the developers to earn passive income from the cryptocurrency.
The passive investment has become a trend for the investors from all around the world. Before Bitcoin came in people used to derive passive income from real estate, limited partnership, and other enterprises. The cryptocurrency and its market provided investors a new chance to reel in fast profit that can be categorized into a passive income. The investors understood of holding cryptocurrencies and earning income from that investment. Holding a cryptocurrency investment is one of the best strategies in the industry. But the investor should be wise with the selection of the cryptocurrency that he/she wishes to hold. If you make a viable selection of cryptocurrency for holding, everything falls on the strategies that you employ for earning passive income. Here are some of the cryptocurrencies that are worth investing in and some full proof strategies that will be helpful for you to earn passive income.
How to select the cryptocurrency for investing?
The cryptocurrency is a volatile market that is prone to fluctuations. So before you make a selection of cryptocurrency, you should develop a mindset and understand that the market can be brutal at sometimes and you can lose and gain value on a frequent basis. But there is a way that you can save yourself from major market fluctuation and loss.
Market history – The market history of any cryptocurrency can help you to figure out the behaviour of the cryptocurrency. The data will show any previous market crash that had happened in the past and will help you comprehend the quality of the cryptocurrency.
Market capital – This is another factor that can help you measure the popularity of the cryptocurrency. A high market capital can give you a better chance of success for the cryptocurrency. Therefore, you should select a cryptocurrency that has a high market capital.
Trading volume – The trading volume of the cryptocurrency is determined by the number of users using the cryptocurrency. If the coin that you select has a low trading volume there is no chance for any revenue generation because there is no one to accept the coin.
Market value – The market value of the coin determines how much money you are going to make of off the crypto coin. If you wish to make a great profit then you should select a cryptocurrency with a great market value.
Examples of ideal cryptocurrencies
Bitcoin – Bitcoin is the top cryptocurrency in the market with the market capital of $112 billion USD. There is no special reason why Bitcoin is on the list except for the fact that it is currently the best cryptocurrency on the market.
Ethereum – The Ethereum coin or Ether is considered as a unique coin because of the technology that it employs in the system. It has a market capital of $50 billion dollar which puts it on the second rank in the list of best cryptocurrency followed by Bitcoin.
Litecoin – Litecoin was the first altcoins that were introduced in the market after Bitcoin. It was able to attract the users of Bitcoin with its new hashing algorithm that was much faster than Bitcoin. This enabled it to generate a market capital of $5 billion USD.
Here are some of the ideal coins that can help you generate passive income without facing any chances of losing the investment in the market. But only choosing the perfect cryptocurrency wouldn’t be sufficient. You must employ strategies that can help you set a constant source of passive income.
The HOLD strategy
This strategy is as simple as it sounds where you can buy and hold the cryptocurrencies. If you employ this strategy with cryptocurrencies like Bitcoin or Ethereum, then your investment will be secure for a long time and when the price is right and at the peak, you can sell them. These strategies can only work if you have invested in viable, fruitful, and top cryptocurrencies. This strategy is easy to employ as the top cryptocurrency are easy to find from the online cryptocurrency exchange platforms. Once you have gained some cryptocurrencies you can employ this method and watch yourself earn some passive income.
Passive index fund
The index fund is yet another strategy that can be used to generate passive income from cryptocurrencies. This is the same index fund that is used in the stock markets. There are many platforms such as BitWise Hold 10, Bit20, etc that provides index fund investing. These index funds don’t require any active management and, therefore, their fee is less compared to the actively managed fund.
These are the two effective methods that can help you generate passive income from your investment. If you want to generate a passive income then you have to also invest time along with your resources. The above-mentioned data and market analysis are depended on the data that is currently significant. This analysis can change according to the market behaviour of cryptocurrencies. The only key method to keep these techniques effective is to do as much as research as possible.