How to Make Passive Income With Crypto

Imagine earning cryptocurrency while you game, learn, or simply hold your assets. Intrigued? Then, let's uncover how to make passive income with crypto, turning your crypto holdings into a 24/7 income stream!

Still, note that different methods come with varying levels of risk, effort, and rewards. For example, platforms like Binance offer staking, lending, and savings accounts, while BitDegree rewards users with Airdrops for learning blockchain-related content.

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7 Ways on How to Make Passive Income With Crypto

One of the most popular methods is probably learn-to-earn. Therefore, let's begin with that.

Learn-to-Earn Courses

The Learn-to-Earn (L2E) model rewards users with cryptocurrency or non-fungible tokens (NFTs) for completing educational courses, quizzes, or blockchain-related content. This initiative is designed to promote crypto literacy while offering rewards, making learning both educational and profitable!

Among L2E platforms, BitDegree stands out as a pioneer in making Web3 education accessible, engaging, and rewarding. It's an e-learning platform that offers content on blockchain, cryptocurrencies, exchanges, and more – all while allowing learners to earn crypto and other prizes as they progress.

To start earning passive income with crypto on BitDegree, sign up for the platform, navigate to BitDegree Missions, and explore a variety of learning topics. Quite often, you can find a Mission with an Airdrop. The rewards may vary from cryptocurrencies to hardware wallets and tickets to an event.

In addition, by completing a Mission, you receive Bits and raise your Degree (in-game points). These are quite important because the more in-game points you have and the higher your Degree, the better your chances of winning.

There's also a Season 7 Airdrop happening, with a $30,000 prize pool. The rules are quite simple: the more Bits you have, the more significant your stake at the prize, you also need to collect 10,000 Bits from the start of Season 7 in order to participate. For that, you can also refer your friends and receive extra in-game points.

You can also join BitDegree Guilds, which serve as project-dedicated communities within the BitDegree Missions platform. These guilds allow users to collaborate, share insights, and participate in Web3 projects centered around specific topics.

📚 Read More: How to Build a Crypto Community With Guilds

Aside from BitDegree, several exchanges also reward users for completing educational content. One of the most well-known platforms is Binance Academy, which offers free courses on blockchain and cryptocurrency, as well as guides on navigating the exchange itself. Coinbase users can also access Coinbase Earn, which typically offers rewards in tokens such as Stellar (XLM), Compound (COMP), or USD Coin (USDC).

Pros of Learn-to-Earn Courses

Let's explore the positive sides of "learn-to-earn" courses that can be your way to make passive income with crypto:

• Monetizes learning. Users can earn cryptocurrency while gaining valuable knowledge about the industry.
• No upfront cost. Many platforms offer free access to educational content, removing financial barriers.
• On-chain certificates. NFT-based certifications provide verifiable proof of completion, beneficial for career opportunities.

Overall, if you're curious about crypto and looking for an engaging way to learn and earn, L2E platforms can be a good starting point.

Cons of Learn-to-Earn Courses

While L2E platforms offer a simple way to gain crypto knowledge and potentially earn rewards, it's important to understand the limitations associated with this model.

• Limited earnings. Rewards may be small unless users consistently complete multiple courses.
• Platform-specific rewards. Some platforms distribute rewards in native tokens, which may need to be converted for liquidity.
• Not entirely passive. Unlike staking or lending, users must actively engage in learning to earn rewards.

If your primary goal is substantial payments, other methods on how to make passive income with crypto may be more suitable.

Crypto Savings Account

Crypto savings accounts offer an easy way to earn passive income by depositing digital assets into interest-bearing accounts. These accounts function similarly to traditional bank savings accounts but often provide much higher interest rates. Instead of earning interest from a bank, depositors earn crypto rewards!

So, how do crypto savings accounts work? Typically, when you deposit funds into a crypto savings account, the platform lends your assets to borrowers, institutions, or liquidity pools. In return, you earn interest payments, which can be compounded over time.

The amount of interest payments depends on several factors, including the platform's interest rates, the type of cryptocurrency you deposit, and the duration of your deposit.

One of the popular platforms offering crypto savings accounts is Binance. Through its Simple Earn program, it lets you choose from various cryptocurrencies, including BTC, ETH, and BNB, and subscribe to:

• Flexible Products. It lets users start earning rewards every minute.
• Locked Products. This offers different locked terms, and rewards are distributed on a daily basis.

Alternatively, there's KuCoin, which offers flexible deposits and withdrawals for many cryptocurrencies with an estimated annual percentage rate (APR) of up to 9%. Your return depends on the cryptocurrency you choose and the savings product you select, such as "Flexible Savings" or "Limited-Time Events".

After subscribing to a savings product, you can enable Auto Subscribe. With this feature activated, your designated cryptocurrency balance from your trading or funding account is automatically transferred to Savings daily at 1:00 AM (UTC).

Pros of Crypto Savings Accounts

Crypto savings accounts offer several attractive benefits, primarily centered around the convenient access to generating crypto passive income:

• High interest rates compared to banks. Crypto savings accounts often offer higher interest rates than traditional banks, with 0.5% or less.
• Passive and simple. Once funds are deposited, interest accumulates without requiring active management or engaging in risky trading or price speculation.
• Diversification. Many exchanges offer a wide selection of cryptocurrencies, so you can diversify your income streams within the same platform and strategy.

In summary, crypto savings accounts are attractive due to their ease of use and higher interest rates. Those are specifically important for beginners learning how to make passive income with crypto.

Cons of Crypto Savings Accounts

Despite the advantages, it's crucial to acknowledge the risks associated with crypto savings accounts, including:

• Lower interest rates. Compared to some other strategies like staking or lending, crypto savings accounts offer lower returns.
• Not FDIC-insured. If you prioritize deposit insurance like traditional banks, crypto savings platforms may not be an option since these don't offer government-backed protection.

While the convenience and passive income potential are attractive, the lower returns compared to other strategies and the lack of deposit insurance should be key factors in your decision-making process.

Staking

The concept of staking may sound similar to crypto savings accounts – "depositing" some of your cryptocurrency to get rewards in return. However, instead of simply waiting for the interests, staking is "more active" since you participate in running a cryptocurrency network that uses Proof-of-Stake (PoS). This locked-up crypto helps the network confirm transactions and stay secure. Think of it like guaranteeing the network's smooth operation.

When you stake, you become a validator (or you can delegate your stake to someone who is). Validators are like the bookkeepers of the blockchain, ensuring everything is accurate. For your help in keeping the network running, you earn rewards, usually in the form of more of that cryptocurrency or a share of the transaction fees.

To get started with staking, you need a staking-compatible wallet or an exchange that offers such services. Before you decide on certain options, consider:

• The potential annual yield (APY);
• Lock-up period;
• Minimum staking amount.

These factors significantly impact your staking experience and potential returns. For example, high APYs often mean longer lock-ups and/or higher minimums. For example, a 10% APY might require a 90-day lock-up and a 1000-token minimum, while a 5% APY could have no lock-up or minimum.

Generally, lock-ups allow platforms to use staked coins for longer periods, potentially generating more rewards, hence the higher APY. Shorter or no lock-ups offer more flexibility but usually come with lower APYs. Choose the option that best balances potential returns with your need for access to your funds.

My suggestion is to start with popular crypto wallets like Ledger Flex and Trezor Safe 5 or crypto exchanges like Bybit, Binance, and Coinbase.

	COINBASE	BINANCE	BYBIT
Overall Score	9.6	8.0	7.9
Best For	Advanced Users & Beginners	Advanced Users & Beginners	More Advanced Users
Operating Countries	United States, United Kingdom, Germany, Canada, France, + 100 more	Turkey, Argentina, Vietnam, Ukraine, + 180 more	South Korea, United Kingdom, Ukraine, Turkey, +160 more
Latest Coupons	GET $200 REWARD All Coinbase Coupons	See All Coupons of Best Exchanges	See All Coupons of Best Exchanges
Verdict	A reliable, well-known and respected cryptocurrency exchange platform.	One of the leading crypto exchange platforms in the industry.	A popular crypto derivatives exchange with some super-low trading fees.
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Table: Comparison of Binance, Bybit, and Coinbase

Once you select the platform, pick a crypto you want to stake. Note that not all assets support staking. Depending on the wallet or exchange you choose, popular cryptocurrencies to stake are Ethereum, Cardano, and Solana.

📚 Read More: Best Crypto Staking Platforms

Pros of Staking

Here are some positive points on why you should choose staking as a way to make passive income with crypto:

• Accessibility. Unlike mining, staking doesn’t require expensive hardware or technical expertise.
• "Predictable" earnings. Staking rewards are relatively stable and often depend on the total amount staked and the lock-up period.
• Compounding potential. Reinvesting your staking rewards can exponentially grow your holdings over time, especially if the staked asset appreciates in value.

If you're looking for a reliable way to build your crypto portfolio, staking's accessibility and compounding potential make it a compelling choice.

Cons of Staking

While staking offers enticing opportunities for passive income, it's essential to understand the potential drawbacks, such as:

• Capital requirement. The higher the stake, the higher the rewards. Some networks require a substantial initial investment to generate significant passive income.
• Regulatory risks. Some governments are imposing restrictions on staking services, which can affect centralized platforms offering staking rewards.

Understanding potential downsides when pursuing staking as a passive income strategy helps you mitigate risks. You may adjust your staking strategy or choose alternatives that suit your budget or investment goals.

Play-to-Earn Games

Play-to-Earn (P2E) games allow users to earn cryptocurrency and non-fungible tokens by engaging in gameplay. The games create a win-win situation^[1] – companies generate revenue, while players have the opportunity to earn income by trading the digital items they acquire in the game.

As these blockchain-based games offer financial incentives, users can monetize their time and skills. Hence, it's not practically a "passive" way to make money from crypto, but it offers an interesting alternative income stream that rewards players for their effort and engagement.

Unlike traditional gaming, where in-game assets have no real-world value outside the platform, Play-to-Earn games allow users to own, trade, and sell their digital items for cryptocurrency. Generally, the process of how to earn passive income with crypto using P2E games looks like this:

• Players engage in gameplay and earn rewards in the form of in-game tokens or NFTs. Some games distribute tokens based on activity levels, skill, or rankings in competitive matches.
• Some games have daily, weekly, or seasonal challenges that boost earnings.
• They can sell the earned tokens and NFTs on crypto marketplaces or use those within the game to improve performance. Alternatively, players convert their earnings to fiat through exchanges, increasing their real-world value.

The process seems simple and rewarding, right? Especially if you're a gamer — earning money while doing what you love sounds almost too good to be true. However, it's important to note that P2E games fall into two main categories: free-to-play (F2P) models, which require no upfront investment, and pay-to-play (P2P) models, where players must invest in NFTs to purchase characters or access premium features.

Therefore, when you research the best crypto games for you, make sure to consider factors like initial investment, earning potential, and long-term sustainability. Also, I suggest that you look for games that offer multiple earning opportunities, so you can maximize your rewards and diversify your income streams.

For instance, in Axie Infinity, players can stake Axie Infinity Shards (AXS) to receive rewards and gain governance rights, allowing them to influence key decisions about the game's future. Similarly, in Alien Worlds, staking Trilium (TLM) enables players to participate in the governance of planets within the game while also earning additional rewards.

📚 Read More: Best NFT Games

Pros of Play-to-Earn Games

Many people may want to start P2E games because of these reasons:

• Monetization of gameplay. Players can earn real-world value from their gaming time through crypto rewards, NFTs, and in-game assets.
• Community-driven growth. Strong player communities can increase the value of digital assets.
• Potential for passive income. Some games allow staking of tokens or renting out NFTs for passive earnings.

While P2E games can be an exciting start to earning passive income with crypto, those are not without risks. Before diving in, you should weigh the potential downsides.

Cons of Play-to-Earn Games

Here are two considerations if you plan to choose play-to-earn games to build your crypto passive income journey:

• High initial investment. Some games require purchasing NFTs or tokens to start earning, which can be expensive.
• Play-to-earn feels like "work". Grinding for rewards can feel less enjoyable compared to traditional gaming.

P2E games offer thrilling opportunities, but players should approach them with caution and strategy. Research game tokenomics, community support, and sustainability models to help mitigate risks and ensure a more rewarding experience.

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Lending

Crypto lending lets users lend crypto for interest or use it as loan collateral. It's popular due to accessibility (no credit checks), potential high returns, and quick liquidity. Two main participants are lenders (who deposit crypto to earn interest) and borrowers (who secure loans with crypto collateral). As a way to earn passive income with crypto, you can be a lender and deposit your assets.

These platforms pool the deposited assets and lend them out to borrowers. In return for lending your crypto, you receive interest payments. The interest rate you earn varies depending on the platform, the type of cryptocurrency you lend, and the loan terms.

For example, Binance Loan offers fixed-term lending options, such as 30-day and 180-day periods, with fixed interest rates (e.g., between 3% and 4.36% at the time of writing for USDT and USDC) with no fees. As a supplier, you only need to select an order from the Supply Market and confirm the order details to send your assets to Binance.

Once the order expires, Binance sends your supplied assets with the return interest accumulated to your spot wallet.

If you're looking for a more flexible option, Bybit can be your answer. With this platform, you can redeem whenever the redemption window is available. Your potential return when lending crypto through a pool is automatically calculated based on how much of the pool is currently loaned out (the Loan-to-Pool ratio) and which cryptocurrency you've lent.

Bybit adjusts the APR and interest you earn every hour to reflect current market conditions and the actual interest accrued on the borrowed funds. Besides the flexibility, the platform offers a wide selection of cryptocurrencies to lend, including BTC, ETH, XRP, and SOL. Bybit also plans to add more options in the future.

Since each lending platform has unique offerings, it's crucial to carefully research and compare them before committing your crypto. Consider factors like:

• Interest rates;
• Loan terms (fixed VS flexible);
• Supported cryptocurrencies;
• Platform security and reputation;
• Any associated fees.

I suggest starting with the best lending platforms, like Bybit and Binance, because these have generally established a positive track record within the crypto community and implemented security measures.

Pros of Lending

Crypto lending has several potential advantages for those looking to generate returns on their digital assets, such as:

• Consistent interest earnings. Lenders earn fixed or variable interest rates on their deposits, often higher than traditional savings accounts.
• No need to sell crypto. Instead of selling assets to profit, lenders can earn passive income while holding their coins.
• Accessibility. Crypto lending platforms often have less stringent requirements than traditional financial institutions, so you can access the services more easily.

Risks always exist when we deal with financial instruments, but these advantages can make crypto lending an attractive option for many crypto holders.

Cons of Lending

Despite the benefits, I think you should know some of the risks before participating:

• Platform risk. Crypto lending platforms are not immune to hacks, scams, or even collapse. If the platform you use experiences issues, you could lose some or all of your funds.
• Liquidity risk. While less common, there can be times when a platform limits withdrawals or lending due to market conditions.
• Tax implications. The interest you earn from lending crypto is typically taxable, and the tax rules can be complex.

It's crucial to weigh these risks against the potential rewards and only lend what you can afford to lose.

Crypto Mining

Crypto mining is one of the oldest and most well-known ways to earn passive income with cryptocurrency. It operates under a Proof-of-Work (PoW) consensus mechanism, where miners' hardware solves complex mathematical equations to confirm transactions and add new blocks to the blockchain. The first miner to solve the equation receives a block reward, along with transaction fees from the validated transactions.

This process ensures decentralization, security, and integrity within the blockchain network. Although mining is often associated with Bitcoin, various other cryptocurrencies, such as Litecoin (LTC) and Monero (XMR), also rely on mining for network security. In the table below, I compare the primary mining methods, highlighting their hardware requirements, efficiency, cost, flexibility, and key features.

Table: Types of mining

Overall, choosing the right mining method depends on your individual circumstances, including your budget, technical expertise, and risk tolerance.

Pros of Mining

Cryptocurrency mining, while complex, offers several potential benefits to those who engage in it, such as:

• Potential for maximum profit. Once mining equipment is set up, it can generate rewards, sometimes with minimal effort. Additionally, mining rewards can be worth significantly more than the operational costs in a bull market.
• Support for blockchain networks. Being miners means you contribute to the security of crypto ecosystems.
• Technological engagement. Mining can be a rewarding experience for those interested in technology and cryptography.

In essence, cryptocurrency mining presents a compelling proposition for those seeking potential profit, a direct role in supporting the networks, and a deep dive into blockchain technology.

Cons of Mining

Although mining can bring a lot of money, there are several risks that can make it difficult to be profitable:

• High initial costs. ASIC and GPU miners, specifically, require a significant upfront investment.
• Energy-intensive. Mining consumes a large amount of electricity, leading to high operational costs and contributing to greenhouse gas emissions,^[2] particularly when fossil fuels are the primary energy source.
• Hardware maintenance. Mining rigs need regular upkeep, cooling, and repairs to keep them functional.

Carefully consider these drawbacks before making any decisions, especially if you prioritize environmental sustainability and ethical energy consumption.

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Affiliate Programs

Do you think you have friends, colleagues, or followers who are interested in crypto but don’t know where to start? If so, affiliate programs can be an easy and effective way to earn passive income by referring them to crypto platforms.

Affiliate programs work by providing users with a unique referral link that they can share with others. When someone signs up and trades, stakes, or invests using that link, the referrer earns a commission, cashback, or a percentage of the platform’s fees.

Leading crypto exchanges and wallets provide affiliate programs with varying rewards. For instance, Binance provides a $100 trading fee rebate for successful referrals. Additionally, those preferring cryptocurrency payouts can choose Kraken rewards in USDC or BTC or invite friends to buy Ledger wallets, such as Ledger Flex or Ledger Stax, and earn $20 in Bitcoin for every purchase.

Additionally, as noted previously, BitDegree also has a referral program that can help you receive extra Bits for the Season 7 Airdrop. Not only will you get rewarded for each friend you invite, but also for their referrals as well.

In addition to the abundance of options, joining affiliate programs to make passive income with crypto is simple. Users typically only need to sign up (with potential KYC verification) and share their unique referral link.

📚 Learn More: How To Earn Money Online With Affiliate Marketing

Pros of Affiliate Programs

Joining affiliate programs presents an opportunity to generate income passively. Here's why this option may be the best "passive income with crypto" strategy for you:

• No investment is required. Unlike staking or yield farming, affiliate programs don’t require you to deposit money.
• Passive earnings. Once set up, referrals can generate long-term commissions with little ongoing effort.
• Multiple platforms to choose from. Many crypto exchanges, wallets, and DeFi services offer competitive affiliate programs. You can also join some of them at the same time!

With their low barrier to entry and potential for ongoing earnings, crypto affiliate programs can be a good starting point for anyone searching for ways how to make passive income with crypto.

Cons of Affiliate Programs

Although affiliate programs sound like an irresistible opportunity for passive income in the crypto world, it's important to understand that they aren't entirely hands-off. Here are several key aspects you need to consider:

• Requires marketing effort. To be successful, you need to actively promote your links that may involve content creation or audience-building strategies.
• Earnings depend on referrals’ activity. If your referrals don’t trade or invest, you don't earn commissions.

In essence, crypto affiliate programs are not a 'get-rich-quick' scheme. Building a successful affiliate income stream needs dedication and strategic marketing.

What's the Best Way to Earn Passive Crypto Income?

After knowing several methods on how to make passive income with cryptocurrencies above, do you have a specific strategy in mind? If you're still confused, here's a quick overview of the strategies mentioned:

Table: Comparison of the best methods to make passive income with crypto

The platforms listed in this table represent a starting point for your research, each with its own unique features and considerations. Remember that thorough due diligence before committing your funds.

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What Are the Key Considerations When Making Passive Income With Crypto?

Earning passive income with crypto can be rewarding, but it comes with risks and factors to consider. Here are the key aspects to evaluate before choosing a method for how to make passive income with crypto:

• Risk VS reward. I've outlined the pros and cons of each passive income method. Every option carries certain downsides, so choose an approach where you're comfortable with the associated risks.
• Platform credibility. Ensure the platform you use is reputable and secure. Check for regulatory compliance, user reviews, and security measures.
• Fees and costs. Some passive income methods may involve fees, such as transaction and withdrawal fees. So, calculate the total cost of participation, including any potential fees, to accurately assess the profitability of each method.

With the pros and cons of every approach, I suggest that you consider diversifying your passive income strategies across multiple methods to mitigate risk and maximize potential returns. Doing this helps create a more resilient and balanced portfolio.

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Conclusions

Learning how to make passive income with crypto can be a great way to grow your assets, but it requires careful planning. Security risks and platform reliability all play a role in determining whether you can turn your holdings into a sustainable income stream.

If you're just getting started, platforms like Binance and BitDegree offer beginner-friendly ways to earn crypto passively. Binance provides staking, savings accounts, and lending options, making it easier for users to earn rewards on their holdings with minimal effort.

Meanwhile, BitDegree allows users to earn crypto through its learn-to-earn programs, where completing educational courses unlocks token rewards and NFT-based certificates.

The content published on this website is not aimed to give any kind of financial, investment, trading, or any other form of advice. BitDegree.org does not endorse or suggest you to buy, sell or hold any kind of cryptocurrency. Before making financial investment decisions, do consult your financial advisor.

Scientific References

1. Duguleană A.R., Tănăsescu C.R., Duguleană M.: 'Emerging Trends in Play-to-Earn (P2E) Games';

2. Alonso S.L.N., Jorge-Vázquez J., Fernández M.A.E., Forradellas R.F.R.: 'Cryptocurrency Mining from an Economic and Environmental Perspective. Analysis of the Most and Least Sustainable Countries'.