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What is passive income?

Trading or investing in projects is one way to make money in the blockchain industry. However, that typically requires detailed research and a substantial investment of time – but it still won’t guarantee a reliable source of income. 

Even the best investors can experience prolonged periods of loss, and one of the ways to survive them is to have alternative sources of income.

There are other methods than trading or investing that can help you increase your cryptocurrency holdings. These can pay ongoing income similar to earning interest, but only require some effort to set up and little or no effort to maintain.

This way, you can have several streams of income that, in combination with each other, can add up to a significant amount.

This article will go through some of the ways that you can earn a passive income with crypto.


What are the ways you can earn passive income with crypto?

Mining

Mining essentially means using computing power to secure a network to receive a reward. Although it does not require you to have cryptocurrency holdings, it is the oldest method of earning passive income in the cryptocurrency space.

In the early days of Bitcoin, mining on an everyday Central Processing Unit (CPU) was a viable solution. As the network hash rate increased, most of the miners shifted to using more powerful Graphics Processing Units (GPUs). As the competition increased even more, it has almost exclusively become the playing field of Application-Specific Integrated Circuits (ASICs) - electronics that use mining chips tailor-made for this specific purpose.

The ASIC industry is very competitive and dominated by corporations with significant resources available to deploy on research and development. By the time these chips arrive on the retail market, they are likely already outdated and would take a considerable amount of mining time to break-even.

As such, Bitcoin mining has mostly become a corporate business rather than a viable source of passive income for an average individual.

On the other hand, mining lower hash rate Proof of Work coins can still be a profitable venture for some. On these networks, using GPUs can still be viable. Mining lesser-known coins carries a higher potential reward, but comes with higher risk. The mined coins might become worthless overnight, carry little liquidity, experience a bug, or see themselves hindered by many other factors.

It is worth noting that setting up and maintaining mining equipment requires an initial investment and some technical expertise. 


Staking

Staking is essentially a less resource-intensive alternative to mining. It usually involves keeping funds in a suitable wallet and performing various network functions (such as validating transactions) to receive staking rewards. The stake (meaning the token holding) incentivizes the maintenance of the network’s security through ownership.

Staking networks use Proof of Stake as their consensus algorithm. Other versions of it exist, such as Delegated Proof of Stake or Leased Proof of Stake.

Typically, staking involves setting up a staking wallet and simply holding the coins. In some cases, the process involves adding or delegating funds to a staking pool. Some exchanges will do this for you. All you have to do is keep your tokens on the exchange and all the technical requirements will be taken care of.

Staking can be an excellent way to increase your cryptocurrency holdings with minimal effort. However, some staking projects employ tactics that artificially inflate the projected staking returns rate. It is essential to investigate token economics models as they can effectively mitigate promising staking reward projections. 

Binance Staking supports a wide variety of coins that will earn you staking rewards. Simply deposit the coins on Binance and follow the guide to get started.


Lending

Lending is a completely passive way to earn interest in your cryptocurrency holdings. There are many peer-to-peer (P2P) lending platforms that allow you to lock up your funds for a period of time to later collect interest payments. The interest rate can either be fixed (set by the platform) or set by you based on the current market rate.

Some exchanges with margin trading have this feature implemented natively on their platform.

This method is ideal for long-term holders who want to increase their holdings with little effort required. It is worth noting that locking funds in a smart contract always carries the risk of bugs.

Binance Earn offers a variety of options that let you earn interest in your holdings.

 

Running a Lightning node

The Lightning Network is a second-layer protocol that runs on top of a blockchain, such as Bitcoin. It is an off-chain micropayment network, which means that it can be used for fast transactions that aren’t immediately transferred to the underlying blockchain.

Typical transactions on the Bitcoin network are one-directional, meaning that if Alice sends a bitcoin to Bob, Bob cannot use the same payment channel to send that coin back to Alice. The Lightning Network, however, uses bidirectional channels that require the two participants to agree on the terms of the transaction beforehand.

Lightning nodes provide liquidity and increase the capacity of the Lightning Network by locking up bitcoin into payment channels. They then collect the fees of the payments running through their channels.

Running a Lightning node can be a challenge for a non-technical bitcoin holder, and the rewards heavily depend on the overall adoption of the Lightning Network.


Affiliate programs

Some crypto businesses will reward you for getting more users onto their platform. These include affiliate links, referrals, or some other discount offered to new users that are introduced to the platform by you.

If you have a larger social media following, affiliate programs can be an excellent way to earn some side income. However, to avoid spreading the word on low-quality projects, it is always worth doing some research on the services beforehand.

If you are interested in earning passive income with Binance, join the Binance Affiliate Program and get rewarded when you introduce the world to Binance!


Masternodes

In simple terms, a masternode is similar to a server but is one that runs in a decentralized network and has functionality that other nodes on the network do not.

Token projects tend to give out special privileges only to actors who have a high incentive in maintaining network stability. Masternodes typically require a sizable upfront investment and a considerable amount of technical expertise to set up.

For some masternodes, however, the requirement of token holding can be so high that it effectively makes the stake illiquid. Projects with masternodes also tend to inflate the projected return rates, so it is always essential to Do Your Own Research (DYOR) before investing in one.


Forks and airdrops

Taking advantage of a hard fork is a relatively straightforward tactic for investors. It merely requires holding the forked coins at the date of the hard fork (usually determined by block height). If there are two or more competing chains after the fork, the holder will have a token balance on each one.

Airdrops are similar to forks, in that they only require ownership of a wallet address at the time of the airdrop. Some exchanges will do airdrops for their users. Note that receiving an airdrop will never require the sharing of private keys - a condition that is a telltale sign of a scam.


Blockchain-based content creation platforms

The advent of distributed ledger technologies has enabled many new types of content platforms. These allow content creators to monetize their content in several unique ways and without the inclusion of intrusive ads.

In such a system, content creators maintain ownership of their creations and usually monetize attention in some way. This can require a lot of work initially but can provide a steady source of income once a more substantial backlog of content is ready. 


What are the risks of earning passive income with crypto?

Buying a low-quality asset: Artificially inflated or misleading return rates can lure investors into purchasing an asset that otherwise holds very little value. Some staking networks adopt a multi-token system where the rewards are paid in a second token, which creates constant sell pressure for the reward token.

User error: As the blockchain industry is still in its infancy, setting up and maintaining these sources of income requires technical expertise and an investigative mindset. For some holders, it might be best to wait until these services become more user-friendly, or only use ones that require minimal technical competence.

Lockup periods: Some lending or staking methods require you to lock up your funds for a set amount of time. This makes your holdings effectively illiquid for that time, leaving you vulnerable for any event that may negatively impact the price of your asset. 

Risk of bugs: Locking up your tokens in a staking wallet or a smart contract always carries the risk of bugs. Usually, there are multiple choices available with various degrees of quality. It is imperative to research these choices before committing to one. Open-source software might be a good starting point, as those options are at the very least audited by the community.


Closing thoughts

Ways to generate passive income in the blockchain industry are growing and gaining popularity. Blockchain businesses have also been adopting some of these methods, providing services commonly referred to as generalized mining.

As the products are getting more reliable and secure, they might soon become a valid option for a steady source of income.

Key Takeaways

Tariffs are taxes that governments put on imported goods. The idea is to make foreign products more expensive so that local businesses can compete better. 

In the short term, tariffs often create uncertainty and market volatility. Depending on how they are announced and implemented, investors may get out of riskier assets like stocks and crypto, leading to price drops.

Tariffs on imported mining hardware and semiconductor chips may also increase operational expenses for miners who rely on imported products.

In the medium and long term, there is a possibility of crypto assets, in particular Bitcoin, becoming more attractive as a hedge against inflation and weaker fiat currencies.

What Are Tariffs?

Tariffs are taxes imposed on imported goods and services, often used by governments to protect domestic industries, generate revenue, or retaliate against perceived unfair trade practices.

While they can provide short-term advantages for specific industries, tariffs may also lead to increased prices for consumers and businesses, trade tensions, and economic disruptions.

In a globalized economy, tariffs affect not just the industries directly targeted but also the broader financial markets. They can influence inflation rates, investor sentiment, and supply chains, which in turn can affect currencies, commodities, and cryptocurrencies.

The Role of US Tariffs in Global Trade

The United States has frequently used tariffs as a trade policy tool, particularly under the Trump administration, which imposed sweeping tariffs on goods from China, the European Union, Canada, and other trading partners. The recent "Liberation Day" tariffs of 2025 have intensified global trade disputes, affecting major industries and financial markets.

These policies have already affected industries like manufacturing, technology, and agriculture. But what about crypto? Even though digital currencies don’t work the exact same way as traditional financial assets, they still react to economic changes. Let’s take a closer look at how tariffs can impact the crypto world.

How Tariffs Can Influence the Crypto Market

The impact of tariffs on financial markets and cryptocurrencies can vary greatly depending on how they are calculated, announced, and implemented. There may also be a significant difference between short-term and long-term market reactions.

For example, in the short term, markets may react negatively due to rising levels of fear, uncertainty, and doubt. But that doesn’t necessarily mean investors will continue to be bearish in the long term. It depends, among other things, on how clearly the governments communicate their plans and how well these plans are executed.

1. Investor sentiment and market volatility

Tariffs create economic uncertainty, leading to volatility in financial markets. Cryptocurrencies, particularly Bitcoin, have often been perceived as high-risk assets. Rising trade tensions impact market sentiment, causing investors to move their capital away from crypto assets toward safer options like gold or government bonds.

For example, in 2025, following the announcement of increased US tariffs on Chinese imports, bitcoin’s price experienced a sharp decline. This suggests that, in the short term, tariffs can negatively impact cryptocurrency prices as uncertainty increases and investors become more risk-averse.

2. Inflation, interest rates and crypto prices

Higher tariffs typically lead to increased costs for imported goods. In situations like this, companies usually pass the extra costs onto consumers, making everyday goods more expensive and leading to inflation.

To fight inflation, central banks, including the Federal Reserve, often raise interest rates. Higher interest rates make borrowing money more expensive, which means less cash is flowing into investments—including crypto.

But there’s another side to this. If inflation gets really bad and people lose trust in traditional currencies, they might turn to crypto, especially Bitcoin, as a way to protect their money. In countries with hyperinflation and weaker economies, this has already happened.

The long-term effect depends on how aggressively central banks respond to tariff-induced inflation and whether crypto investors view bitcoin as a good store of value similar to gold.

3. Crypto mining costs could rise

Many cryptocurrency mining operations rely on imported hardware, particularly from China, where a significant portion of ASIC miners and GPUs are produced. 

If the US places higher tariffs on Chinese tech products, it could drive up the cost of mining hardware, making it more expensive to run a mining operation. This could also encourage miners to relocate to regions with lower operational costs and fewer trade restrictions.

In addition, if tariffs target semiconductor chips (which are crucial for mining rigs), the impact could be even bigger. 

4. Currency devaluation and crypto adoption

In certain cases, trade wars and high tariffs can weaken national currencies, making cryptocurrencies a more appealing alternative. In countries experiencing rapid currency devaluation, citizens often turn to bitcoin and stablecoins to preserve wealth.

For instance, when Argentina and Turkey faced economic instability, their crypto adoption rates surged as residents sought alternatives to depreciating local currencies. If US tariffs lead to similar economic instability in affected countries, crypto adoption could rise in the long term.

Is Bitcoin a Safe Haven or Just Another Risky Asset?

Some investors treat it like a "safe haven" asset—especially the early adopters. Others see it as a speculative investment that’s as risky as stocks.

Historically, Bitcoin has followed stock market trends during periods of economic stress. When the stock market drops due to tariffs, Bitcoin often does too. But if the global economy worsens, Bitcoin could take on more of a "gold-like" role, attracting investors looking for a hedge against inflation and currency devaluation.

The long-term impact of tariffs on bitcoin depends on whether it is seen primarily as a speculative asset or as a hedge against macroeconomic risks.

Closing Thoughts

While tariffs mainly target goods and services, their effects go far beyond that. They can shake up investor confidence, drive up mining costs, and even push more people toward digital assets. Trade policies can certainly influence how people invest, where companies do business, and even what kinds of currency people trust. 

In the short term, increased uncertainty can lead to price drops as investors move away from risky assets. In the medium and long term, there is a possibility of Bitcoin becoming more attractive as a “store of value” asset.

Further Reading

Is Bitcoin a Store of Value?

What Is Monetary Policy?

What Is the Crypto Fear and Greed Index?

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