An overlooked or little known way to earn passive income with cryptocurrencies - is to lend your coin on the Poloniex, Quoine or Bitfinex platforms.
But, lending cryptocurrencies
- can be time consuming to monitor and optimize
- the potential rates of returns seem low compared to trading
- is a very long term strategy that is boring and has very little action
- and requires that you leave your funds on the exchanges, and not in your own wallets
Why to people do it?
Lending crytpocurrencies in these markets is a very low risk buy-and-hold strategy that also adds the amazing capability to compound interest earnings in as little as two days!
A Free Bot To Make Lending Easy
CoinLend.org is a free bot that automates the lending cryptocurrencies as much of the time as possible, at the best rates available.
I teach more advanced cryptocurrency lending strategies in the upcoming free course on DigitalCurrencyTraders.com - but I also dedicate specific accounts to benefit from the easy and effective service provided by CoinLend. Below I will highlight the benefits of each strategy and share some of my results.
Earn Passive Income With Cryptocurrencies
- The heart of this crypto lending strategy is a buy-and-hold investment based on the belief that Cryptocurrency will change the fundamental methods of virtually all financial transactions - and that cryptocurrencies will gain institutional adoption over the next few years, thus driving the prices 10x or even 1000x higher than present levels.
- A second key assumption as about the inherent volatility in cryptocurrency that is sure to cause large and unexpected price swings within these markets as they gain maturity and a large enough market cap that they become more difficult to manipulate.
- The final key assumption is that long term hodl is better than trading. Anticipating the wild price swings is difficult, time consuming and extremely risky - while long term investing and lending to those who wish to speculate with leverage takes less time, and in the long run, will prove to be very profitable.
An important part of an overall crypto investing strategy should include the plan to establish a small portfolio holding of each of the cryptocurrencies that have a margin trading and matching margin lending market - and to set these assets up for lending, and compound growth over time.
CoinLend.org - provides an automated method of ensuring your funds are available for lending at the best prevailing rates at the time - or use the custom settings to reserve your coin for specific interest rates and lending periods.
How CryptoCurrency Lending Works
Bitfinex offers a Peer-to-Peer lending platform that works in concert with the Margin Trading markets, listed below.
Poloniex provides a Margin Lending market where Bitcoin Loans finance Long positions, and alternate digital currencies are used to finance Short positions in each individual matching market. See the market list screenshot below.
Margin Traders must pay close attention to the changing lending rates when considering the potential profits and losses they may attain. In addition, margin requirements must be maintained or positions with too-large draw down could be at risk of forced liquidation at substantial losses in order to protect the funds provided by the lending parties.
Trading Cryptocurrency markets includes extreme risk - and Margin Trading is even more risky. Leveraged Trading in any form is only recommended for very experienced and disciplined speculators who have a clear and practiced risk management strategy.
A Closer Look At CoinLend Bots
Below is a snapshot of my account on CoinLend - showing a range of coins with active loans, and the interest rates that each are earning at this time.
The interest earnings over the past 30 days, and the anticipated interest over the next 30 days at the current rates:
And an interesting forecast of the very long term prospects for the ultimate value of this portfolio - when calculated forward with today's active interest rates. The actual results will be different, because the interest rates vary according to market conditions.
## CoinLend Bot Settings
While the system can be set up to run with no custom configuration - options within the BOT settings provide for different combinations of reserve capital, minimum interest rates as well as setting an interest rate where longer time frame loans are offered.
This way lending can be provided at the going rates for the minimum period of time, and when interest rates spike above a specified level, the loans are offered with up to 60 days lending periods.
Lending Markets On Bitfinex
Bitfinex has expanded the range of tokens and currencies that provide option for margin trading. Each of the margin traded markets has a matching Margin Funding market, or Margin Lending market, where lending rates are set by competitive bidding to ensure the best rates in each different market condition.
The lending markets on Bitfinex include twenty two cryptocurrencies and tokens and two of the worlds most important Fiat Currencies at the time of this post:
US Dollar and Euro Dollar lending markets for FIAT Currencies
Bitcoin
Bitcoin Gold
BCH
DASH
Monero (XMR)
Litecoin
Ripple
Ethereum Classic
ETH
ZEC
EOS
SAN
ETP
AVT
DATA
IOT
OMG
NEO
QTM
EDO
QASH
YOYOW
Are you using the Free CoinLend Bot for Automated Cryptocurrency Lending?
What additional tips do you recommend?
Watch for future posts with step by step screenshots on
- How To Set Up A Quoine Bot
- How To Set Up A Poloniex Bot
- How To Set Up A Bitfinex Bot
...and I am particularly excited to write about 'Why lending cryptocurrencies can dramatically change your success with money in all areas of your life!'