Passive Crypto Income – Superior To The Fiat Alternative

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22 Jul 2024

It’s A Must!
Passive income is an absolute must in the world of Cryptocurrencies. Even in TradFi, passive income is king. After all, you only have so many hours you can exchange labor for a reward. Furthermore, the current age is slowly eradicating this model. Despite being the predominant form of income generation throughout the ages, technology is replacing it.
Passive income has been a luxury for the average man on the street. Typically the wealthy are privileged enough to set up passive income streams in the form of dividend-paying stocks, real estate, and other cash-generative investments. However, with Crypto, this realm is cracked wide open to anyone willing to take the risk, put in the time, and start building.
Establishing a few key ideas, or even a single idea is crucial. Passive income models should be left to compound over time. This is where the true power lies. This is also how returns eventually outperform inflation and rising costs. A dedicated approach is required… something we often address as a community on Sapphire Crypto. It’s the cornerstone.
What Makes Crypto Superior
Despite the volatility and intense bear markets, Crypto outperforms TradFi investments over the longer term. Choosing when to plant and when to harvest is imperative. Executing the appropriate action incorrectly isn’t helpful. Discerning the seasons of the market is a crucial aspect of investing and building passive income models. Harvesting and “re-planting” at the appropriate time is incredibly powerful.
The appreciation of cash investments via TradFi opportunities is a non-event. These investments may produce passive income. However, over time your collateral is losing value, which begs the question:

Are you really earning passive income if your initial investment capital is decreasing?

It’s a great question and comes down to yet another relativity ratio. These ratios are predominant within the world of finance and should always be sought and considered, before an investment decision. Passive income is almost exclusively a long-term idea. It’s not something that gains meaningful traction over a year or two. This needs to be understood and appreciated.
A cash investment doesn’t grow in value, it erodes over time. A Crypto investment via a staking or DeFi protocol will experience appreciation on top of the passive income generated. This is provided the opportunity is sound and not a rug pull attracting investors with exceptionally high rewards. This is why Polkadot remains such a good passive income idea. It’s solid and offers approximately 18% per year.
Begin compounding this return over an extended period and you should experience some stellar returns. In many cases, altcoins are currently in a buy zone. It’s a good time to begin purchasing assets for passive income purposes. With the recent casualties within the TradFi space, traditional assets no longer offer the safety and security they once did. This too makes Crypto a preferred alternative.
A market that can appreciate significantly over 4 years beats consistent, modest, and depreciating returns. However, as I mentioned, much of this idea comes down to timing. You don’t need to be perfect. However, it’s important to “act” within the appropriate timeframe. Time waits for no man… and that couldn’t be truer in the Crypto market. It’s fast and it’s often ruthless.

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Final Thoughts
It is a more risky idea. However, for experienced Crypto investors, it’s easier to navigate and accomplish a certain degree of consistent success. Financial markets require a lot of understanding and experience. Inexperienced investors should look to WEB3-based models to begin earning and building passive income streams. This eradicates risk and helps to make the journey more enjoyable. All the Best! See you next time!

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Disclaimer
First of all, I am not a financial advisor. All information provided on this website is strictly my own opinion and not financial advice. I do make use of affiliate links. Purchasing or interacting with any third-party company could result in me receiving a commission. In some instances, utilizing an affiliate link can also result in a bonus or discount.
This article was first published on Sapphire crypto.