Cryptocurrency has grown tremendously in popularity over the past couple of years. Investors are flocking to different digital asset exchanges, hoping to capitalize on their potential returns.
But what if you don’t want to move your crypto assets off cold storage and onto an exchange? Is there a way to still earn yield on them?
The answer is YES! In this blog post, we’ll discuss the various strategies and options available for earning yield while keeping your assets secure in cold storage. Read on to find out more!
What is Cold Storage?
Assuming you’re not keeping your cryptocurrency in a physical safe under lock and key, it’s likely stored in a digital wallet.
But what happens when you want to take your earnings offline and put them into cold storage? In simple terms, cold storage refers to the practice of storing cryptocurrency offline on a device like a USB drive or paper wallet.
By doing this, you can minimize the risk of theft or hacks since the coins are not accessible via the internet.
Additionally, it’s important to note that most online wallets are custodial, meaning the service provider has control over your private keys. If you want true ownership and control over your funds, then cold storage is the way to go.
How to Earn Yield on Your Crypto in Cold Storage?
If you’re like most people, you probably have a significant amount of your wealth invested in cryptocurrencies. And, if you’re like most people, you probably also have a significant portion of those cryptocurrencies stored in cold storage (i.e., offline).
But did you know that you can actually earn yield on your crypto while it’s in cold storage?
- One way is to use a service that allows you to do so. For example, there are services that will lend out your crypto for short-term loans. When the loan is repaid, you’ll receive interest payments along with your original investment.
- Another way to earn yield on your crypto in cold storage is to simply stake it. Staking is the process of holding onto your crypto for a set period of time (usually around 1-2 years) in order to help validate transactions on a blockchain and earn rewards for doing so. The number of rewards you earn will depend on the specific cryptocurrency you’re staking and the length of time you stake it for.
Regardless of which method you choose, this is a great way to grow your wealth without having to take any unnecessary risks.
With a wide range of options available, from staking pools and lending protocols to yield farming and dApps, holders can take advantage of various opportunities to earn passive income with their digital assets.
However, before investing in any crypto-based product or service it’s important for crypto holders to do their homework and understand the risks associated with each option.
Cold storage wallets are an excellent way to safeguard your funds from hacks or theft while also exploring ways to make your money work for you.