close

How To Earn Interest On Your Bitcoins

stocksnap_e5retxvn7r

Critics of bitcoin used to argue that bitcoin won’t survive as a currency because it doesn’t pay interest and is, therefore, inferior to fiat currencies. While this may have been true when bitcoin first launched in 2009, this is no longer the case. In this post, you will discover how you can earn interest on your bitcoins.

Lending Bitcoins on Exchanges to Margin Traders

Several bitcoin exchanges, such as the US-based exchange Poloniex for example, allow you to lend out your bitcoins to margin traders. It allows you to set an interest rate that will work for you as well as the duration of the loan.  In the long run, you will also get good compounding interest as the short term loans have daily interest. You will need to actively manage your account to get good rates.  In case you don’t want to spend your time online trying to monitor the rates you can use their API to connect to a bot (check out our article on Using Poloniex Lending Bot for more info). Poloniex lending is very convenient as it enables you to earn interests on a wide range of altcoins.

Investing in Peer-to-peer Loans

Instead of lending out your coins on an exchange you could also lend them to individuals via bitcoin peer-to-peer lending platforms. The two most reputable bitcoin peer-to-peer lenders are Bitbond and BTCPop.

Bitbond is a peer-to-peer lending platform that allows investors to invest in global peer-to-peer loans and generate up to 13% annual return on your bitcoins. Bitbond allows you to choose what borrowers you want to lend to or if you prefer a more hands-off approach you can choose automated investing and let Bitbond decide in which loans you will invest. The platform also allows you to communicate with the borrowers to get a deeper understanding of why they are requiring the borrowed funds and how they intend to pay them back.

BTCPop also offers users to invest in peer-to-peer loans but it is actually more than a pure peer-to-peer lending platform. It offers a variety of cryptocurrency-based securities to invest in. If you want to make money and have a couple of bitcoins at hand, you are able to invest in stocks, cloud mining, investment pools, savings accounts, among others. The site has a wide-range of bitcoins securities which gives room for users to buy and trade secretly without any identity verification. This gives an extra edge to those who leverage bitcoin’s reputation of “anonymity”.

The investment pools of BTCPop are a way to deposit bitcoin and get daily returns.  Alternatively, you can lend to earn interest on your bitcoins on BTCPop.

Depositing Your Coins on a Bitcoin Savings Account on BSave

BSave is a bitcoin savings account onto which you can deposit your bitcoins and earn daily interest. What BSave does with your deposited bitcoins, so that it can pay you interest, is take your bitcoins and lend them out on exchanges.

So depositing your bitcoins with BSave would be an option for you if you don’t want to actively manage your lending activities to generate interest on your bitcoin holdings. BSave pays up to 2.51% interest per annum according to its website.

 

Alex Lielacher

The author Alex Lielacher

Alex is the founder and editor-in-chief at BitcoinAfrica.io. He is a former investment banker who has been following bitcoin and blockchain technology since 2011. Prior to launching BitcoinAfrica.io, he has been contributing to leading bitcoin publications such as Bitcoin Magazine, CryptoCoinNews, and BTCManager.