Investing in cryptocurrencies may seem like a massive risk, but those who bet on the right kind of crypto at the right time have made big profits.
A single bitcoin could be bought for just over $ 300 in November 2015, but it’s now worth $ 62,000 (as of this writing). If you recall, a single bitcoin sold for nearly $ 20,000 in December 2017. So it’s easy to see why young and older investors are equally eager to get involved, despite the danger.
The fact is, many people have made money from cryptocurrencies, whether they want to admit it or not, and others still see it as an opportunity to diversify their investment portfolio beyond traditional stocks and bonds. For example, let’s say you use Bitcoin to grow your wealth, save your money, or diversify your portfolio. In that case, you should know that cryptocurrency savings accounts can help you grow your investment income even further.
What is a cryptocurrency savings account?
The Bitcoin savings account works exactly as it sounds. You can deposit your Bitcoin (or any other asset in certain situations) and get a fixed rate of return over time with this type of account.
For example, with a BlockFi cryptocurrency savings account, your Bitcoin can generate up to 8.6 percent annual percentage return (APY) accrued daily and paid out monthly. On the other hand, your return on investment can vary depending on the type of cryptocurrency you own, be it Bitcoin, Ethereum, Litecoin or any other. You may be able to choose the type of cryptocurrency that your interest will be paid on, depending on the type of crypto savings you have in your account.
It’s understandable if you’re curious about how these accounts make money. Companies that offer Bitcoin savings accounts, such as traditional financial institutions, often lend your cryptocurrency to other investors. BlockFi, for example, claims to earn interest on assets stored in interest accounts by “lending them to reputable institutional and corporate borrowers.”
The goal of Bitcoin savings accounts is to help investors make money while holding their assets. In principle this seems okay, but in practice it is a bit dangerous. Before you start saving your money, however, you should do a thorough portfolio analysis of crypto coins. You can use Bitcoin Trader, a free trading software that displays real-time values of crypto assets.
Is it worth a cryptocurrency savings account?
It is up to you to determine if the risk is worth the profit, knowing that Bitcoin savings accounts are not as secure as standard savings accounts. If you have invested in Cryptocurrency before, you are no doubt used to some level of danger and excitement.
On a personal level, we think Bitcoin savings accounts are valuable as there aren’t many places you can currently get an 8% return on your money. However, a Bitcoin savings account can bring that return, and if all goes well, the value of your wealth could rise in the meantime.
Many of the top Bitcoin savings accounts also offer some very attractive account terms. At BlockFi, for example, there are no minimum accounts. This makes it easy for anyone to get started, even if they own a tiny amount of cryptocurrency.
Ways to save money with cryptocurrency
You can save money by investing in cryptocurrency. Here are some cryptocurrency benefits that are sure to keep your money safe.
No bank fee
While typical banking costs such as maker and taker fees and occasional deposit and withdrawal fees are standard with fiat currencies, Bitcoin users are not subject to the traditional banking costs associated with fiat currencies. This includes no account maintenance fees or minimum balance fees, no overdraft costs and no repayment fees.
Low transaction fee
Fees and currency issues are common with standard wire transfers and international transactions. However, transactions in Bitcoin are often cheaper than bank transfers because there are no intermediaries or governments involved. This can be a significant benefit for tourists. In addition, Bitcoin transfers are quick and eliminate the hassle of traditional authorization formalities and waiting times.
A Bitcoin credit card works similarly to other premium credit cards, and only you receive cryptocurrency instead of cashback or points with every swipe. So while we enjoy straightforward cashback incentives (and you can use your cashback earnings to buy crypto at any time), these cards can help you grow your crypto portfolio more efficiently.
Fintech companies, including BlockFi and Upgrade and Gemini, and other exchanges have announced plans for cryptocurrency credit cards. These cards offer award categories that are comparable to many regular cashback credit cards. For example, after you have received 3.5 percent back in the first 90 days after setting up your account, the BlockFi credit card receives a flat rate of 1.5 percent back in Bitcoin for every transaction you make.
Coinbase earn and save
A well-known crypto exchange where you use the platform’s Learn hub can get you rewards. You’ll need to add videos to Coinbases and take quizzes to accept the free change. After that, Coinbase will send a tiny amount of cryptocurrency to your wallet. Since the curriculum usually focuses on a single cryptocurrency (like GRT or BOND), you will be given these coins to complete the lessons.
Cryptocurrency savings accounts can be exactly what you need if you are a crypto investor looking to get a return on your investment while holding it. There are several Bitcoin savings accounts to choose from, so do your research before signing up for one. Fees, access restrictions, and the way you earn interest, as well as the assets you need to get started can vary widely.
However, these accounts are not for everyone, and they are a terrible place to keep your emergency funds. So before opening any of these accounts, think about the pros and cons, as well as the risk involved. The possibility of a return of 8% or more can be well worth the risk, but you should approach the scenario with open eyes.