The way we think about how best to put our crypto to work has changed dramatically with the development of DeFi (Decentralized Finance) applications, which are creating new ways to manage and generate income from cryptocurrencies. They work by interacting directly with your crypto wallet enabling you to perform a variety of functions such as borrowing, lending, exchanging or trading digital assets.
Whatever else you choose to do with your crypto, you will need to consider the best place to store it. Up until recently, you would just have been seeking out the wallet with the tightest security and the lowest transaction fees. However, today, a new type of electronic storage is emerging, that offers a revenue stream all of its own – the interest bearing wallet. So, you will also want to take into account the most attractive interest rates ethereum and bitcoin can earn you.
A new way to earn interest on Ethereum
To make a profit on your digital currency with an interest-bearing wallet you simply need to open an account and deposit funds, which are transferred to a closed account where it can earn you a generous passive income. This is a far simpler and faster process than opening a traditional bank account, and the returns are far higher.
The way it works is that as opposed to just letting your funds sit idle, you are allowing them to be used to generate a fresh revenue stream. If you want to earn interest on ethereum, the size of your profits will depend on the amount you deposit and the type of account you choose. For example, you can lock your capital in a closed account for a set period, during which it is used for a variety of purposes. It may be used for trading or loaned out to other account holders to earn interest. Alternatively, in the case of crypto staking, your savings are put to work supporting a specific blockchain network. You provide funding to float the network operations and in return you earn staking rewards.
Risk to return ratios when investing your capital
When choosing how to invest, your have a number priorities to consider. You want to reduce your risk as much you can but also to ensure your profits are as high as possible, all without requiring too much time consuming hands-on management.
At the riskiest end of the scale, there is cryprocurrency day trading, which involves a large time investment and takes advantages of rapid fluctuations in the volatile crypto markets. The returns can be exceptional but exposure is high.
Another popular option with many investors is stocks. There is an element of risk and the exchanges need to be monitored, but returns can average around 10% per year. A far safer route, which basically involves no oversight is bonds, yet returns are not going to exceed 6% per year. Alternatively, there is of course real estate. The returns are great, since you can make 2% per month, but this type of investment will eat into your capital with taxes, property maintenance and payment of numerous middlemen, while also involving complex bureaucracy.
This leaves us with just the traditional bank to consider. You don’t have to incur any risk at all and there is no effort required to manage your funds. However returns are on average, lower than 1% a year.
In contrast, an interest-bearing crypto wallet can offer returns that are completely unmatched by any of these other investment channels, particularly when compared with a bank. Unlike a traditional financial institution, using a wallet to earn interest on ethereum, you are not stuck with zero rates or negative interest on your capital.
Similar to a bank, no intervention is required, allowing you to focus on other matters, but instead of simply sitting there waiting to appreciate, your crypto is working on your behalf. Risk is limited, but here is where your choice of provider matters, since the technology, risk management measures, security protocols and levels of transparency will vary from wallet to wallet.
When it comes to interest rates ethereum, bitcoin ripple and other coins can earn far more in the right wallet. This does not mean however that banks don’t have an important part to play, when it comes to growing your account balance. A lucrative strategy, used by financial institutions as well as professional investors is loan arbitrage, also known as Other People’s Money (OPM).
Banks use this strategy all the time. While you earn just 1% interest, your money is being used by the bank to give out loans finance mortgages and purchase assets. They are earning a far higher rate of interest on the loans they are providing, generating huge profits for the bank.
However, you can beat the bank at their own game. Take a loan from the bank for anywhere up to 10% interest a year. The money you have borrowed is then converted into crypto and placed in an interest-bearing wallet, which earns you returns far exceeding the monthly interest you owe the bank. You make a profit, while easily paying off your loan.
How to choose the best interest-bearing wallet
When it comes to picking a wallet to generate interest on ethereum, a major priority is going to be the security of your capital. Unfortunately, not all the actors in the crypto space can be relied on to play fair and not all investment strategies were created equal. You need to find a reliable wallet that offers safety and mitigates risks on all fronts. For example, many wallets have no regulatory oversight and no way to guard against the hacks that have become a commonplace danger of blockchain-based applications.
For example, here at ArbiSmart, we are fully regulated, with EU licenses both for our automated crypto arbitrage platform and our interest-bearing wallet. Using the wallet is simple. You just fund your account and enjoy interest on ethereum by enabling ArbiSmart to perform automated arbitrage trading with your capital. A share in the profits is paid for the use of your funds and it is the ongoing success of the platform that allows us to provide great returns. Crypto arbitrage is not only highly lucrative but widely acknowledged by professionals across both the fiat and crypto investment communities to be one of the lowest risk forms of investment available.
Moreover, as an EU licensed company, we are held to the highest regulatory standards with external auditing, security checks of individuals and systems, an insurance fund that covers all operational capital, compliance with strict AMC/KYC procedures to shield against fraud and bank-grade data security protocols. In addition, we offer the added layer of protection of a risk management team that monitors the markets 24/7 and can intervene in the case of extreme market upheaval.
This recognition of the value of the human element, also extends to support. It is critical when choosing a wallet to make sure that they are able to be held accountable and can offer assistance the second you need it. At ArbiSmart we offer personal support across multiple channels, including phone, email, Viber, Telegram, Messenger, Whatsapp and more.
Of equal importance when choosing a wallet is your profit margin. At ArbiSmart we set ourselves apart in this respect too, with interest on ethereum and other coins, ranging from 10.8%- 45% a year. The exact sum depends on the amount deposited, the specific currency (fiat or crypto) and the account type chosen. You can also withdraw your funds at any time from our flexible accounts without having to pay any fees, or wait for a specific time period to elapse.
Wallets offer a great way to earn a passive income with minimal risk. You can earn interest on ethereum that easily eclipses other forms of investment, with no effort involved. There are a wide variety of options out there today and that number is growing all the time. So be smart and think carefully when choosing your wallet. You need security, reliability, accountability and of course generous profits. You also want versatility, with a wallet that offers a range of account types and allows you direct access your funds, without heavy penalties or delays. Take whatever time you need to do the necessary research so you can make the right investment and ensure your crypto is working as hard as possible on your behalf.
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