The most common way for investors to store their crypto assets is in cold storage (for long term preservation). And others keep them on their favorite exchange platform. While these may be the most popular methods, they can’t help them building their overall wealth or growing their holdings. Instead, they should consider the best way to earn bitcoin interest: signing up for a bitcoin interest account.
What Is the Best Bitcoin Savings Account?
The smartest and easiest way for crypto holders to earn interest on bitcoin is by opening a bitcoin account. And they should get one that offers the lending of cryptocurrency.
While there are a few providers that offer the same services, even fewer are guaranteed to be the best for you.
Users who open an account with any of these providers will earn bitcoin interest of around 4-7%. And this is, without a doubt, a much better rate than the traditional bank interests.
The top recommended lending platforms are:
How to Earn Interest on Bitcoin?
Traditionally, people store their money in bank accounts and even gain interest from what they deposited. In the same way, BTC interest accounts also let people deposit and receive interest from their investment. Everyone considers this as one of the newest and exciting models in the blockchain industry.
This model can take place in a different number of ways – one of which includes interest-earning accounts. Everyone commonly knows this as simply lending bitcoin. The investors should first transfer their bitcoin holdings to the financial service provider. Then, the users will finally start to earn bitcoin deposit interest over time.
The blockchain industry is now constantly thriving. This is because of the rising number of businesses opening up and more investors on the lookout to earn more capital.
People with BTC can now deposit their bitcoin and earn up to a 6 percent interest per year.
The payouts come either daily, weekly, monthly, or yearly. This garners a bitcoin compound interest which increases the previously estimated amount to 6.2 percent. This is one of the easiest and convenient ways crypto investors can earn bitcoin while they HODL.
How Does a Bitcoin Savings Account Work?
There is a growing number of companies starting to offer investors to earn bitcoin daily interest. It works when users send their cryptocurrency to their service provider’s wallet. Then over time, they can earn interest on bitcoin. This is a great new way for cryptocurrency HODLers to earn and store their crypto-asset holdings at the same time.
For the past few years, banks have been offering lower than usual interest rates which effectively makes the returns dis-satisfactory. So, people have been looking for greener pastures to start earning interest again. But in the bitcoin world, there have been little to no options for investors.
So because of this, these people are looking to the different alternate financial service providers. And with crypto accounts, investors can earn bitcoin interest of up to 6 percent annually. The clients can also earn bitcoin compound interest which inflates their yearly returns.
Take this for Example:
At a 6 percent bitcoin compound interest, a BlockFi user deposits 1 bitcoin on March 29. By the end of April, the investor will have a new balance of 1.005 BTC. This entire system repeats each month just until the client finally decides to withdraw their investment.
In continuation, if the bitcoin compound interest does not change, the investor that deposited only 1 bitcoin will see that their overall holdings will increase to 1.062 BTC (+6.2%) exactly a year after (after 12 months).
And, if the investor chooses to add more bitcoin to their account, the bitcoin compound interest will also compound and show in the new balance.
Another user deposits 1 bitcoin on February 1 then, on February 10, they deposit another 1 bitcoin. This means their current total balance is 2 BTC.
By March 1, the user will have earned 0.0078 BTC from interest. 0,0025 BTC comes from the first deposit and 0.0053 BTC is from the new balance. These two interests will then be added to the original balance. Now, the user’s new total balance is 2.0078 BTC.
Another way to earn: Bitcoin Saving Wallets
In decentralization, nobody has control over the investors’ money except for the investors themselves. So, it is actually not possible to earn bitcoin daily interest from a cold crypto-wallet.
But, there are some companies that choose to give bitcoin compound interest to clients that choose their services. Here are a few:
Users that open an account with these two are guaranteed to earn bitcoin interest of around 4-5%.
There are a lot of different methods for investors to earn interest on bitcoin and create a passive income.
But it is a known fact that there are some advantages and disadvantages that come with this line of business. So, all investors should do thorough research and self-educate in order to avoid scams and losses.
When a user moves BTC into a deposit account, the user is placing the platform in control of their funds. This is why it is important to look for a reliable and trustworthy platform.
Having a bitcoin savings account is ideal for users who think their coins’ value will rise over time. Additionally, it is more secure than traditional wallets because BTC banks have a venture capital that covers potential losses.