Passive Income: The Way to Survive in a Down Crypto Market

After a brief sabbatical, I’m back to writing on the ever-changing crypto market. Since my last article in December, the market has been in a persistent downfall, with intermittent bouts of revival. But there is no question that the trend is downward. Bitcoin shed half of its all-time high price achieved just November of last year. Almost all the other major coins followed suit shedding large chunks of their market cap. Quite a bloodbath.

How does one survive in such a market? Where does one turn for some stability? The answer might be passive income projects. Take Elephant’s Stampede Perpetual Bonds for instance. By holding the project’s stable coin called TRUNK, you earn 205% APR, or 0.56% per day, which can be compounded to earn an exponentially higher interest rate. Your investment is removed from market volatility given that TRUNK is a stable coin. We’ll talk more about the Elephant system in a future article.

You could put some money into yieldnodes and earn an average of 10% per month (213.84% per year compounded). Here you are investing in the nodes that run the blockchain and getting paid to do so. Owning and operating a node can be technologically challenging for the everyday investor. The operators of yieldnodes does this for you. The program has been around for over two years and has produced consistent returns each month, ranging from a low of 5% to a high of 19%. We’ll provide additional details on this in a future article as well.

Then there’s DRIP, which I wrote about in December. DRIP pays 1% a day on your deposits. This can be compounded to an astounding 3,678% APY. The DRIP token is not a stable coin like Elephant’s TRUNK, and you can benefit from price appreciation. Of course, the flipside is that your investment is also subject to price depreciation. Any price drops should ultimately be offset by the 1% a day if held long enough, which lowers price risk.

DRIP seems to have decoupled from the larger crypto market. During the recent downturn, DRIP moved from under $90 to $110 at the time of writing. This is a more than 20% rise when the rest of the market is bleeding and reminds me of a similar move in HEX a few months ago. HEX is another passive income coin, and this might be a pattern we see in these projects.

The reason for such market disconnect is that tokens like DRIP are held not just for a quick price increase but are seen as a way to build long-term wealth. Most people holding these coins have set daily payout goals they hope to achieve by holding and compounding, so they are not inclined to sell when the market is falling. The number of persons joining DRIP increased significantly over the past few months, which helps price growth. New DRIP products such as the Garden, which pays 3% a day and the Animal Farm, a new type of yield farming project, has stoked additional interest in DRIP. Hence the upward momentum for the project.

To give an example of the power of DRIP, I started an account on November 25, 2021, with $2,500, which gave me 69 DRIPs. I’ve compounded almost daily since then, and now have 113 DRIPs with a max payout of 410 DRIPs. That’s a max payout of $45,100 I could take from the DRIP faucet at the rate of 1% a day (assuming constant price). That’s about $100 a day ($3,000 a month) after fees charged to help sustain the project, and an 18 time increase on the $2,500 in two months. Not too shabby at all. This can be compounded for longer to increase the daily payout. And if you believe (like I do) that the DRIP train has not yet left the station, the returns from this project could be life changing for even smaller investors.

To put that into perspective, the U.S. federal minimum wage is $7.25 per hour. Assuming a 40-hour work week and four weeks for the month, that’s a salary of $1,160 a month for someone earning the minimum wage. A DRIP investment of $2,500 pays two and a half times the wages of a minimum wage earner after two months. And all that’s need is a few clicks on your computer each day.

Investment advisors will tell you to diversify your investments. A passive income crypto strategy could be a lucrative tool to diversify your portfolio. Some believe this should be the only strategy, what with the stock market struggling and banks paying basically zero percent on your money. Passive income from cryptocurrencies could be the great wealth equalizer, as everyone can participate and even small investments with adequate time can turn into a regular and livable income.

In future articles I will delve further into projects like Elephant and DRIP and introduce promising new projects as they come across my radar.

If you found this article useful and is considering joining DRIP, please consider joining my team. Remember you must start with a buddy. I’m available for questions you may have, and I offer airdrops to team members.

My buddy address is:
0xCA5051060d8F3e5dE574Eabe533f9A9C2B7F324E

This article is for information and educational purposes only, and nothing stated herein is to be construed as investment advice. Neither the author nor the publication takes any responsibility or liability for any investments, profits, or losses you may incur as a result of this information. Please do your own research and due diligence before making any investment decisions. The author has made every effort to ensure accuracy of the information in this article, but makes no representations or warranties, expressed or implied, to its accuracy, completeness, timeliness, or correctness. The author may own cryptocurrencies discussed in this article.

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jaycesondon

Accountant (CPA), equity research analyst and crypto enthusiast.