Deposit in cryptocurrencies

Deposit in cryptocurrencies
Deposit in cryptocurrencies

Inflation in Poland and the world in 2022 is very high, hence many people and investors are thinking about diversifying their investment portfolio. One such option is to buy cryptocurrencies, but also various forms of holding deposits in cryptocurrencies - be it Bitcoin, Ethereum or USD-T.

What is a cryptocurrency deposit based on?

Many of the existing cryptocurrency exchanges, such as the most well-known one Binance offers so-called staking. Staking is a laternative form of "mining" cryptocurrency for digging them with smart cards. With staking, users transfer their virtual coins to a special wallet and get some percentage of the mining profit from them. For example, the Ethereum cryptocurrency intends to move from proof of work to proof of stake in 2022, and having 32 ETH we can staked them for a certain percentage. For smaller amounts, we have to use collective staking through, for example, Binance or other exchanges.

Binance in 2022 in its offering of theoretically "safe" investments similar to deposits offers:

  • Savings - a form of lending cryptocurrencies for a percentage, e.g. for USDT (Tether) it is 10% APY, for BTC 5%
  • ETH 2.0 Staking - staking Ethereum for an as yet unforeseen percentage
  • Locked Staking - staking various cryptocurrencies for a specified period of time

Other entities also offer similar deals for the most popular cryptocurrencies:

  • Nexo - Up to 12% on "deposit" of BTC, ETH, USDT
  • BlockFi - up to 12% in cryptocurrencies
  • Celsius - Up to 9% on USDC, BTC, ETH

Many of these services also offer very high APYs (annual percentage return on investment) of several tens of percent for lesser-known cryptocurrencies or tokens - it's worth remembering here that their value against traditional currencies can fall sharply at any time, so this is an investment with a high risk of losing funds.

Bank deposits vs cryptocurrency deposits

Bank deposits in Poland or savings accounts offer a 2022 return on investment of 1-3%, while cryptocurrency deposits are 5-10%. Of course, the risks associated with investing in cryptocurrencies are significant all the time, even if you consider investing in so-called stablecoins - that is, USDT or USDC, whose rate is tied "permanently" to the value of the US dollar. However, it is worth considering this type of investment as a way to diversify your investment portfolio, rather than investing a large percentage of your savings. This article is not investment advice, but merely provides an overview of the available opportunities.

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Categorized as Internet

By Viktor Greenwood

I have been interested in IT since 2005, and I have been working in IT since 2010. I like to solve problems, and in my free time I like to run in the wilderness.

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