Earning Passive Income with Crypto in 2024: 7 Strategies
The bull market brings a plethora of daily opportunities in the crypto sector, many of which can yield up to 50% annually!
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An uptick in market liquidity positively impacts all passive income strategies, enhancing both trading volumes and asset values.
Here are 7 low-effort, low-engagement ways for traders to profit from crypto.
DEX Farming
Liquidity pools on decentralized exchanges have long offered opportunities to amplify earnings and earn a passive return on stablecoins. Farming profitability varies based on several factors:
- The platform chosen;
- User base and liquidity volume;
- Trading activity;
- The network hosting the exchange;
- The fee structure for users, among others.
Farming yields have improved as more traders engage in transactions, thus increasing fee contributions.
Top platforms for profitable farming currently include Dodo Ex (up to 25% annually), Trader Joe (up to 50% annually), PancakeSwap (up to 30% annually), and Orca (up to 35% annually).
To find such protocols, one can easily check CoinGecko or CoinMarketCap, look under the “DEX” tab, pick an exchange, and verify the profitability of its liquidity pools, typically listed in the “Pool” or “Liquidity” sections.
Staking
The majority of leading altcoins, as ranked by market capitalization on CoinGecko, use Proof-of-Stake algorithms, enabling earnings through staking.
Inflation for coins on PoS or DPoS blockchains seldom goes above 7%, offering stakers a roughly equivalent annual percentage return.
However, staking returns can be boosted in several ways. Firstly, the value of accrued coins may increase. Secondly, in 2024, some projects are set to offer additional rewards to stakers through retroactive airdrops.
Stakers of tokens like TIA, ATOM, PYTH, OSMO, and DYM have already repeatedly received bonus rewards. This trend is likely to persist as the market expands, presenting staking as an attractive option.
Lending Protocols
These platforms allow users to take out loans secured by their cryptocurrency holdings. For example, users unwilling to sell their BTC but eager to explore trading and DeFi opportunities can borrow stablecoins against their cryptocurrency collateral. The Loan-to-Value (LTV) ratio typically lies between 60-70%.
With the excitement around retroactive airdrops and the increase in trading volumes, Annual Percentage Rates (APR) on these lending platforms often exceed 40% in USDT/USDC stablecoins. Some notable platforms include:
- MarginFi;
- Kamino;
- Venus;
- Aave;
- Nostra.
To begin earning in lending, simply deposit your tokens in the “Lend” section. Taking out a loan isn't necessary, as that would counteract your earnings through interest payments.
Crypto Exchange Promotions
The bull market's essence includes the listing of new tokens. These new assets are introduced on major centralized exchanges, using token farming campaigns as a marketing strategy.
In these campaigns, exchange users can “stake” their BTC/ETH and earn new coins over the campaign duration, usually not exceeding a week. Examples include By Votes on Bybit, Launchpool on Binance, and Jumpstart on OKX.
The profitability of these campaigns, for those maintaining their funds throughout, ranges from 1–4%. Given the frequency of such promotions monthly, this method offers an attractive passive income opportunity.
Mining
Previously, we explored mining's potential impact on the BTC price. If Bitcoin's value continues to ascend, mining profitability could see significant gains.
In 2022, Hive Digital Technologies acquired 29,000 ASICs for Bitcoin mining, reporting a year later that these assets had fully recouped their investment. Considering this report came in December 2023, it's inferred that they sold their BTC at prices generally below $42,000.
This suggests that the current Bitcoin price almost entirely compensates for the halving's effects, where miners' block rewards halve. Hence, mining profitability is expected to stay around 1–1.5 years, preserving its status as a lucrative business.
Staking and Holding NFTs
Increasingly, crypto projects offer retroactive airdrops for holding or staking their NFTs. An example is the Memeland project, which enabled NFT holders to participate in the MEME token sale, resulting in substantial profits for investors. Altlayer awarded its NFT holders up to $20,000!
Projects such as Blast, Berachain, Element Market, and zkSync could potentially follow suit.
Buying and holding high-liquidity NFTs could be a viable passive income route, though it's crucial to thoroughly evaluate the associated risks.
Delta-Neutral Strategies
This earning approach involves opening positions in both directions, including earnings through farming, participating in token sales, and buying delta-neutral futures contracts.
Although not traditionally considered passive income, this strategy offers minimal risk and almost guaranteed returns. Further details on delta-neutral strategies are available in our dedicated article.
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