Passive income in crypto, is it even possible? Gurus sell courses about Passive Income which often turn out to be fluke, but the real deal is far better than any closed signal channel can offer. There are 2 approaches to do passive income in crypto, which are often overlooked.
How to earn in crypto without daily trading?
There is no trick, having passive income in crypto is possible and doable, and there are 2 major ways to make it happen.
Long to Mid Term Spot Crypto Scouting
This is a boring, but stable and working method: find an undervalued coin, buy it, wait for the price to rise. All you need is patience, some wits to research the projects yourself and a spare budget. In principle, this is a simple approach, as you can’t lose more than you invest on the Spot market.
How to do Spot Crypto Scouting? Step by step guide (NFA, DYOR)
1) Low market cap, practical use-case for the project, and real positive revenue says that project is mature enough for the market, but not widespread yet;
2) Revenue and financials can be confirmed through defillama.com — an online tool to look up financial benchmarks for every crypto;
3) Usually, people consider a project for their portfolio, if it has high revenue, low market cap and financials in stable green zone for a considerable amount of time;
There are other variations, such as buying <1$ coins, or looking up old projects with already established market presence. Spot Trading is good because it allows you to earn passively on crypto’s growth, while isolating yourself from risks.
Pros:
- Can’t lose more than you invest;
- Don’t have to pay fees for holding open position contrary to futures trading;
- Much safer for beginners in terms of financial management;
- Peace of mind for seasoned traders so they don’t have to watch price movements;
- Occasionally, can pay out with x10 gains if played out properly.
Cons:
- Modest profits on average, don’t expect anything higher than 30% of your total portfolio;
- Must dig into every project to understand their underlying structure and value proposition;
- Heavily tied to market trends, if the market is in bear stage it’s no time for spot trading at all.
Copytrading Assisted by AI via LocalTrade
If you’re in LATAM there’s a limited amount of options to choose from where you can actually buy crypto. One of such options is LocalTrade, and they offer the second best option to earn passive income in crypto even if you’re not an expert trader.
Founded in 2017, LocalTrade offers Copytrading tools — a way to trade even without deep market expertise. Thanks to partial KYC users can safely deposit and withdraw crypto, but to use fiat currency they’d need to complete the ID reveal process. Even despite the KYC part, you still can use copytrading and test it out for yourself.
How copytrading works?
- An experienced lead trader executes strategy, and people copy them in exchange for a small portion of profits;
- Copy account duplicates deals made by lead account, and when executed properly, earn profits off of trading;
- All the user has to do is to filter out traders based on their open history, and to help with that LocalTrade offers JexAI assistant.
By using JexAI on LocalTrade, users can quickly find best copytraders right from the chat window and start using their strategies on the spot. Based on Sharpe Ratio, users can determine whether the trader is reliable or not, and the higher this number is, the better.
JexAI filtering out Copytraders; Source: LocalTrade.cc
To make Market Analysis easier, you can also use JexAI and just ask them to pull up live data from the market for your own use. While still in early testing stages, the assistant looks as a promising way to interact with markets in a chat-like way.
Copytrading Pros:
- No previous day trading experience required, can opt out of any deal at any time, and can adjust the strategy manually;
- While still a bit riskier than spot trading, copytrading offers a way to trade crypto without deep market expertise and disciple that actual trading is known for;
- Users receive profits generated from copying the lead trader’s strategy and can withdraw then at any time;
- Doesn’t need active monitoring, as users can set up strategy limits and define when to take profits and when to not copy the strategy;
- Easy to filter out the traders by their sharpe ratio, PnL values, and past history to find the one who can handle the market movements.
Copytrading Cons:
- Calls for capital investment, users are generally expected to be able to allocate at least $500 to copy trades, since lead traders can use risky approaches;
- Needs leverage, usually from x2 to x5, which is considered modest compared to using x10 to x15 for futures market;
- Still needs at least a basic understanding of how the market works in order to take full advantage of.
Whether you are seasoned crypto investor or just starting up, both options — spot scouting and copytrading — would work best for passive income in crypto. With Spot Scouting you trade the crypto market directly, and have no risk of liquidation in exchange for modest profits, and occasional high profits. Copytrading works best for when you already have some capital, know the basics of the market, but can’t handle the emotional load of directly trading crypto yourself. Choose wisely, protect your investments and always handle risk responsibly.
This content is for informational purposes only and does not constitute financial advice or an investment recommendation. Cryptocurrencies are volatile assets, and trading them involves risks, including the potential loss of capital. Before using any platform or service, conduct your own research and carefully assess the associated risks.