Passive Income using Cryptocurrency
Saving is difficult these days, especially if you have a family to support, and the cost of a living crisis to get through. You’d think that if you followed the advice handed down from when you were little, saving would actually grow your wealth. You know, like, it’s supposed to.
Well, unfortunately, it doesn’t anymore. Despite rising interest rates in the UK, the base rate is still at 0%, traditional savings accounts still don’t have the muscle to help fight back against rampant inflation. When goods go up 9% in a year, your money is just getting weaker and weaker every day if it’s not earning a chunky interest rate.
Cryptocurrency might bring better returns
Every time there’s a change in the price of Bitcoin, there’s a load of headlines and barely-concealed glee about the cryptocurrency market collapsing, etc, etc, blah. This is mostly built on the confidence that comes with knowing absolutely nothing about it.
However, it’s a fact that the cryptocurrency space has the potential to generate much better returns because it’s smaller, more volatile, and by definition has fewer middlemen. In fact, traditional finance used to be able to offer interest rates on savings accounts such as 7%. But then they decided that giving that amount of money away just wasn’t something they wanted to do anymore.
But yes, it’s changeable
Yes, cryptocurrency can change value up to 10% against the dollar in a single day. That’s kind of scary.
However, for the investor who doesn’t always want to be looking over their shoulder, there’s a more stable kind of cryptocurrency: it’s called a stablecoin.
A more stable coin
A stablecoin is a digital asset whose value is pegged to that of a real-world asset. The most common stablecoins shadow real-world currencies such as US dollars, euros and even British pounds. This is very useful because it brings traditional finance onto the blockchain to allow trades between the two worlds to happen.
Every stablecoin works in a different way to maintain its “peg”. One of the most successful stablecoins is a US dollar-backed one: USDC (“US Dollar Circle”), which is run by finance giant “Circle” in conjunction with cryptocurrency exchange Coinbase. Each coin is backed by a real dollar in Circle’s vaults and is redeemable for one if you want to.
Risk vs Return
Even the safest, most stable, virtual asset will never be as safe as a traditional coin in a traditional bank account. Most governments worldwide have some kind of compensation scheme for savers in case their bank goes bust (in the UK, that means FSCS, in the US, FDIC).
However, that safety comes at a cost, and part of the payoff is a rate of interest that’s well below the rate of inflation. For instance, a standard savings account might offer 1.0% APR. Crypto, however, can offer significantly higher rates of return: and rates tend to be higher on stablecoins than on regular crypto because there’s a higher demand to borrow them.
Passive income for mums
So, if you’re a busy mum, dad or other carer, what if you have some spare funds for investing and want to protect them from the ravages of inflation?
Well, don’t put all your eggs in one basket, and remember you need a cash reserve for emergencies.
But, let’s look at the difference between the rates you get at provider AQRU with our Maple USDC account (using the USD stablecoins we mentioned earlier on), vs a typical traditional rate of return.
Let’s say you invest £1,000 over a year.
With Maple USDC at a yield of 7% over 1 year, you would make £70. With a traditional savings account at 0.2%, you’d be looking at a princely sum of £5. Maths matters!
You can start your journey of earning passive income from stablecoins today, with AQRU.
It’s free to start up, and you get 10USDC to invest immediately: invest and watch those figures fly as you watch it grow in real-time.
There may be a short delay while that happens, but after that, you can secure your account with 2-factor authentication (you should do this with most of your logins!).
Then, you can fund your account by sending GBP or EUR from a bank account. There’s no deposit fee when you transfer from a bank account (minimum deposit, 100 euro equivalent). You can also deposit crypto into AQRU’s hardened wallets to invest straight away (again, fee-free), or even buy stablecoins with your debit card through MoonPay (third-party provider fees apply).
After that, you can start earning in earnest: the low minimum deposit also means you can painlessly supplement that amount later.