It’s not only that crypto trading is not for everyone. The truth is that sometimes there is just not a good opportunity to trade: Too choppy, too aggressive stop hunts, volume too thin.
So, how can you turn a profit on your crypto when you don’t want to trade with your holdings?
Build a ‘hodl’ strategy
This is the simplest method ever. The basis of it is simply to decide whether you think a cryptocurrency is worth keeping for the long run, and hold it in your wallet.
With only a little more effort in your crypto holding strategy, you can make the actual profit taking much simpler for yourself:
- First, look for good fundamentals like network effect, resistance to bad news, a use case showing that it’s more than a vaporware.
- Once you find cryptocurrencies you want to keep, decide on how long you are willing to hold them. Ballpark is good enough: A decade? A year?
- Next, split that period and make a mental note on how often you will re-evaluate your investment. You could go with seasonal cycles - 6 months, 1 year, or a halving cycle.
- Every time your point of re-evaluation comes, you can decide to rebalance and take out your principal amount from the profits, or to just keep holding.
Lending your crypto
If you have significant amount of Bitcoins (or Ether, or any other cryptocurrency that is traded on an exchange) you can lend it to crypto traders and other people who will pay you interest.
There is a range of lending platforms where you can do this. There are places like Ethlend where you can lend a range of some 250 ERC-20 tokens. You can also go for margin and swap funding options for major coins via exchanges like Bitfinex, Bitmex, Poloniex etc.
For the lazy people who do not want to manually manage the lending stuff, a crypto lending bot can take care of it either for free or for a small fee.
The costs depend on whether you will go for an open-source code from Github that you will have to set up and configure yourself, or if you will go the easier way of a commercial product.
Running a Masternode
A masternode is simply a cryptocurrency full node with a wallet that keeps the full copy of the blockchain in real time. By that it supports the coin’s network by hosting a full copy of the ledger.
A masternode must be always up and running and is required to perform certain special tasks in various cryptocurrencies. You as the masternode owner get compensated for your masternode doing these tasks.
Keep in mind that most projects have different amount of coins to be held in the node wallet as a minimum to start running your node as a masternode.
Also, the requirement of being up and running 24/7 might be a bit discouraging.
Staking might be the easiest way to get some extra income on some of the cryptocurrencies you hold.
It is in fact less work than holding, because it requires no strategy or evaluation - as long as you are primarily collecting more of a coin.
In order to be able to start staking, your selected coins have to follow the proof-of-stake consensus mechanism (this is the only way for stakers to be rewarded and the blockchain to be secured at the same time).
If you own the proof-of-stake coins, you just keep them in a staking wallet to generate new coins. No effort included, no minimum limit on how much of the coin you have to hold to be able to stake.
You can earn some 10% extra coins in a year by just holding and staking them. It is like a regular dividend or profit on your cryptocurrencies.
Mining and other early opportunities: Bounties, Rebates, Cashback…
Mining of the most popular proof-of-work coins (like Bitcoin) is a by and large a lost case unless you are in special circumstances. These days, mining is only really profitable if you are a big player, but if you have cheap electricity and a decent gaming PC you still can make a small profit on it.
If you have mining rigs and cooling stuff left over from when small scale Bitcoin mining still paid, you can still turn some profit with that on the altcoin markets. There are new proof-of-work cryptocurrencies still being launched where you can get in early. On AltcoinTrading.NET, you can sometimes find out about these new coins if you browse the Crypto Airdrops section.