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2025 is already on the threshold, so it’s just the right time to discover how to make passive income with crypto to improve your financial situation next year. Although this process requires less professional skills than trading cryptocurrencies, there are still a lot of factors to consider if you want to find your perfect option and avoid scams. Our guide is here to help you!
A passive source of income provides a person with earnings without their active involvement. In the context of cryptocurrencies, many strategies allow you to earn money without spending your precious time in front of your monitor! However, it’s essential to consider your financial goals and risk tolerance when choosing a crypto passive income source.
If you want to generate passive income, you should review the list of the most popular strategies first. You are welcome to check our brief overview to choose the one that aligns with your expectations.
| Method | Pros | Cons | Efficiency |
|---|---|---|---|
Staking | Relatively low-risk strategy Stable and predictable income Perfect option for people who want to hold their cryptocurrencies | Low annual percentage yields Long unstacking periods on some platforms | Moderate, depending on your initial investments |
Yield Farming | High interest rates Possibility to switch between yield farms platforms for higher income | Depending on market volatility Challenging management of assets on multiple platforms | High but risky |
Crypto Lending | Stable income Diversification and flexibility | Counterparty risk | High, but your borrowers may default on their loan |
Liquidity Provision | Lower dependence on market volatility Efficient price discovery | Possible impermanent loss Complex management | High |
Mining | Possibility to mine almost any popular cryptocurrency High security and reliability | High electricity consumption Service fees (for cloud mining) Expensive hardware | Low or moderate, depending on the crypto you mine |
Play-to-Earn Games | Robust control over in-game assets Possibility to earn rewards without investments | Necessity to spend time in a game Depending on the game’s popularity | Low |
Dividend-Earning Tokens | Regular payments | Risk of investing in a scam Possible project failure | Moderate, depending on the project’s success |
Airdrops and Forks | High income possibilities Low initial investments | Higher scam risk New tokens vulnerability | Moderate |
Staking is one of the most popular sources of digital passive income, which is similar to keeping your money in a traditional savings account. Cryptocurrency holders lock their coins in special staking wallets, which generate interest as the funds remain untouched. The best places to open crypto “savings accounts” in 2025 are Binance, OKX, and ByBit. The most promising crypto investment opportunities include Cardano, Lido Staked Ether, and NEAR Protocol.
Yield farms allow investors to earn returns by placing cryptocurrency in a decentralized cryptocurrency exchange (DEX) to provide liquidity for different crypto pairs. As a rule, this passive income crypto strategy allows you to earn rewards from trading fees and protocol incentives, which sometimes may lead to impermanent loss.
Another popular method for passive income generation is lending crypto, which involves placing your cryptocurrencies into a lending platform so other people can borrow them. While choosing a service for this strategy, you may come across centralized (Binance Loans) and decentralized (Aave) options.
Centralized platforms are managed by companies and require you to pass the Know Your Customer (KYC) and Anti-Money Laundering (AML) checks. Novices often opt for them to earn a passive income because of professional customer support and advanced security.
Decentralized lending platforms rely on smart contracts that execute the loans. Considering that there is no central authority, this source of passive income demands more technical knowledge and risk tolerance but, at the same time, may offer lower trading fees.
Liquidity pools work as reserves of different crypto assets locked in a smart contract. These cryptocurrencies may be used for various financial services, eliminating the need for intermediaries. Every time someone trades using a pool containing your assets, a transaction fee is charged. After that, this fee will be distributed among all liquidity provided to reward them for their investments. If you choose this way to earn passive income, opt for the platforms like Uniswap, PancakeSwap, and SushiSwap.
You can earn crypto passive income by constantly mining tokens and coins using powerful hardware. To assemble your home miner, you’ll need to spend at least $3,400 (for GPU, CPU, RAM, SSD, power supply, motherboard, frame, and cooling system) plus monthly payments for the increased energy consumption.
Even if you build a powerful crypto farm, it’s still not recommended to focus on popular cryptocurrencies like Bitcoin. Their mining requires a lot of resources, so you may simply not receive a return on investment. It’s better to opt for Zcash or Clore. Plus, you may choose cloud mining platforms, which lend you the power of their hardware to perform crypto mining.
The P2E games like Axie Infinity and The Sandbox allow you to earn while enjoying the gaming process. You can obtain NFT, the price of which may increase as a project becomes more successful. For example, a purchase of land in The Sandbox may be compared to a real estate investment, which you can further sell more expensively.
Dividend-paying tokens allow their owners to generate passive income through crypto by getting regular rewards. The amount of money you receive directly depends on the success of a project you’ve invested in. Currently, the most attractive cryptos that pay dividends include KuCoin, NEO, and Bibox.
When a blockchain splits into two separate chains due to significant changes in its underlying code (typically initiated by the members of a crypto community), a hard fork occurs (as well as a new cryptocurrency).
An airdrop is an event where users can get new tokens directly from a new crypto project to their wallets. Both of these opportunities allow you to earn passive income as you can get free coins or buy them at their initial price, which may increase with time. As it grows, you may start selling your tokens on DeFi platforms and stocks.
If you want to earn passive income in crypto, it’s essential to invest in reliable and promising tokens and coins. As a rule, they should meet the following criteria:
The investment in assets that meet all these criteria is the best crypto passive income. And if you don’t have time to review coins and tokens, you can opt for the following cryptocurrencies:
After learning about the most popular ways to generate passive income in crypto, there are still some risks to consider. Here are the most common challenges investors may face.
Crypto market volatility allows you to get high returns when you buy tokens at a lower price and sell them at a higher one. On the other hand, the situation may be completely reversed, leading to the loss of your investments.
If you want to create a reliable crypto passive income, invest in cryptocurrencies that are backed by robust use cases, active development, and well-established teams, as they are more resistant to volatility. Additionally, it’s essential to conduct continuous market research to find new possibilities and invest in different types of crypto to reduce your portfolio risk.
In most cases, generating passive income involves making investments on third-party platforms, which, unfortunately, may be hacked. If you opt for centralized services, you’ll need to pay fees but still be able to enjoy the highest-level security measures. Also, you can opt for decentralized platforms, which offer benefits like anonymity and the absence of third parties. However, these services are less resistant to hacking.
You certainly don’t want all your assets to disappear when a crypto platform just gets closed. The chance it happens is close to zero if you opt for a service with an excellent reputation and long history. Unfortunately, both centralized and decentralized platforms may turn out to be scams, so thorough research is the only way to avoid losing your money.
While generating passive income in DeFi (decentralized finance) liquidity pools, you may face impermanent loss. When it happens, the value of your assets becomes lower than it was when you allocated them. However, this loss is “impermanent” as the price may still return to the initial value due to market volatility. The best way to avoid this problem is to invest in stablecoins like USDT.
Not all countries have already legalized cryptocurrency, and it’s important to consider the situation in your area. Further, find out more about crypto tax policy. For instance, in the US, citizens have to pay up to 20% fee on long-term gains from cryptocurrency transactions.
Do you want to earn passive income with crypto ASAP? Follow these simple steps:
Of course, if you plan to start mining crypto, you also need to purchase hardware and learn the appropriate software. In case you want to start earning in E2P games, you’ll need to spend some time earning in-game assets.
Each of the discussed strategies has both advantages and drawbacks, which you should consider before making an investment to secure some passive income. If you are a complete beginner, it’s recommended to opt for low-risk strategies like staking, as fewer risks are involved, and they allow you to learn the basics.
Also, if you are ready to reveal your personal data and pay higher fees, opt for a centralized platform, as they are typically more secure than decentralized ones. Additionally, check out your local crypto legislation regarding cryptocurrency to avoid legal issues. There is a lot to consider, but with knowledge and research, you can generate a stable income without any major issues.
The sources provided below can help you with the issues you may encounter with your first crypto investments.
There are strategies that allow you to invest in cryptocurrencies without facing a significant risk of losing your money. Staking, popular P2E games, and crypto lending provide opportunities for stable passive income. Nonetheless, if you want to minimize the risks even more, invest only in stablecoins and use the services provided by a reputable centralized platform.
Your passive income with cryptocurrency directly depends on the chosen strategy, the sum of the initial investment, and the coins or tokens you’ve chosen. For example, if you opt for staking Solana, you can expect to earn 6.87% of your funds per year.
As crypto generates passive income, it’s taxable in many countries. Thus, you must research your state’s legislation regarding cryptocurrencies before you try to earn passive income with crypto. Consider that the money you earn from tokens and coins isn’t taxable only in El Salvador, Singapore, Malaysia, and Malta.
Undoubtedly, centralized platforms are the best for beginners who want to create a crypto passive income source. It’s better to start with Binance, which is ideal for staking, lending, and investing in NFTs and dividend-earning tokens.
coinpress prepared a review methodology to rate crypto exchanges, tools, and apps. We curated a list of metrics to evaluate crypto platforms based on their services, user experience, security and customer support, payment gateways and charges, pricing and promotions. Visit our Review Methodology page to learn more about how we review each crypto platform.
This content is purely for educational purposes and should not be considered as financial advice. Do your own research before investing in any crypto platform and only invest the amount you can afford to lose.
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