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The Mass Media

How to earn interest on your cryptocurrency

BlockFi+Logo.

BlockFi Logo.

The purpose of this article is for educational purposes only. All advice in this article is not financial advice and please do your own research before you invest in anything.

The future of finance is here, and cryptocurrency is here to stay. As cryptocurrency and DEFI continue to dominate public discourse, people new to cryptocurrency may be curious where they can safely store their cryptocurrency. In addition to safely storing cryptocurrency, people new to cryptocurrency may want to earn interest on their cryptocurrency. When looking to store cryptocurrency, people have two main options, storing their cryptocurrency on an exchange, or sending it to an external wallet. 

For those new to cryptocurrency, I would suggest holding your cryptocurrency on an exchange and earn the limited interest provided by the exchange itself. Sending your cryptocurrency to an external wallet poses many risks that people new to cryptocurrency may not be able to handle. Firstly, when sending cryptocurrency to the wrong address, there is absolutely no way to retrieve that cryptocurrency. There is no centralized body that tracks cryptocurrency transactions, so, therefore, if cryptocurrency is lost, it is lost forever. Secondly, sending cryptocurrency to an external wallet is also risky because you must fully trust the wallet you are sending the cryptocurrency to. 

When purchasing cryptocurrency in the United States, users have two main cryptocurrency exchanges to choose from. Coinbase and Gemini are the two main cryptocurrency exchanges available to U.S. residents. They both have their pros and cons, and both provide trading platforms for users looking to actively trade cryptocurrency. Coinbase has limited options for those looking to earn interest on their cryptocurrency. Currently, Coinbase offers Cosmos Staking (5 percent per year), Tezos Staking (4.63 percent per year), Dai Rewards (2 percent per year), and USD Coin (0.15 percent per year). Gemini, on the other hand offers a whole host of cryptocurrency interest rewards and you can find the reward rates here: https://www.gemini.com/earn

If you are looking to send your cryptocurrency to an external wallet to earn interest, there are currently four main options for United States residents. They are Exodus Wallet, BlockFi, Nexo Wallet, and Celsius Network. Each wallet has its pros and cons, however, depending on the coin you are sending, you may have to pay substantial transfer fees to the cryptocurrency network you are using, (not the wallet or exchange). Personally, I hold accounts with all four wallets and believe that they all have great aspects. Before depositing your cryptocurrency into these wallets, please do your own research, and don’t deposit funds unless you fully trust the company or team behind the wallet. Nexo Wallet and Celcius Network have their own native cryptocurrency you can purchase, so you may want to consider purchasing them to increase your interest rates. 

Regardless of what wallet or exchange you hold your cryptocurrency on, it is always important to be secure and ensure that your funds are secured by a difficult password and to always use two-factor authentication. This will ensure your funds are never at risk and gives you peace of mind that your funds secure. Always be sure to keep your funds on an exchange or wallet that you trust and do not deposit your cryptocurrency into wallets that you do not trust. As always, do your own due diligence before buying, selling or holding cryptocurrency.