Bitcoin has been having a good time this year. After the flash crash back in early March, things started to look quite different for the biggest cryptocurrency in the world. Bitcoin has been pumping a lot, and recently it even went as high as $14,000 before it started to correct itself a little bit. More and more people started to see the true value of Bitcoin and many altcoin traders even dumped their crypto assets to pump more BTC. In the month of October, Bitcoin has been going higher when alts have been mostly going down.
So, this begs one simple question. Where can you actually make money just by HODL-ing BTC? I mean, apart from the price appreciation itself, of course. Let’s take a look:
One of the most popular programs to make money just by HODL-ing Bitcoin is Blockfi. It’s a custodial program that acts just like a bank. The idea is that you put your Bitcoin in your Blockfi account, and you will be able to earn interest every beginning of the month. If you have a tier 1 account with Blockfi, you will be able to earn as much as 6% APY (appreciation per year).
Many people trust Blockfi because it’s a big name and the interest payments have been pretty smooth. If you want to HODL Bitcoin for the long term, you might want to try Blockfi.
The concept is pretty much similar to Blockfi where you can put your money to your Celsius Network account and earn interest on your BTC. They claim the interest is up to 6.20% APY, and they even have their own native token called CEL. Celsius is actually quite similar to Nexo, so you might want to check that one as well.
With Celsius, you can also borrow some money by using your crypto assets as collaterals. This is actually how they can give you interest if you lock your BTC to them (the platform loan away these Bitcoins to the borrowers). The concept is pretty much still centralized but you get good APY just by storing your Bitcoins with them.
This is not as direct as it looks like because you actually need to swap your Bitcoin to wBTC (wrapped Bitcoin). The concept of wBTC is quite similar to stablecoins where the valuation of wBTC is deemed to be 1-to-1 to the real BTC. The idea is that you give them (the custodians) your BTC and they issue 1 wBTC for every 1 BTC that you give them. You can also redeem the wBTC and get your real BTC back.
Once you get your hand on your wBTC, you can start providing liquidity on various Ethereum-based DEX-es to get some rewards. On Uniswap, you can put 50% wBTC and 50% ETH to get daily rewards in the form of UNI tokens. Keep in mind that there’s this concept called impermanent loss when you lock your money in a pool like this because your funds will be rebalanced when you withdraw them. So, if BTC goes up against ETH in the next 2 weeks, you will receive less BTC and more ETH once you attempt to withdraw them 2 weeks later.
This is an experimental DeFi attempt by Justin Sun, the founder of Tron. He created SUN back in early September to catch up on the DeFi hype at the time. SUN had a decent success before it gradually lost its popularity along with the DeFi dumps in the recent time. That being said, providing liquidity in the form of BTC/TRX pool will still be able to give you decent APY (up to 20% yearly).
The concept is quite similar to Uniswap, where you have to split your funds to 50% BTC and 50% TRX, and you lock your money inside the liquidity of that pair. As a reward, you will get SUN token, which you can dump on the market. The good thing about both SUN and Uniswap is that you can unlock them anytime you want and the reward that you get will be instant (not every start of the week or start of the month like the custodian websites mentioned above).