The rise of bitcoin became a game-changer in the importance of cryptocurrencies in the world. Now everybody wished they bought Bitcoin or other digital assets when it was cheap years ago. Most people bought their bitcoin cheap and are at least a hundred times richer than they used to be. This is not to say that you should put all your savings in crypto, but it could be a good form of investment saving.
A crypto savings account is identical to a traditional bank savings account. Crypto savings accounts allow you to learn interest rates of up to 20% APY on your assets by merely investing them with a service provider. A cryptocurrency savings account works in a parallel style to traditional savings accounts. For example, in a bank savings account, when you deposit money into a traditional savings account, you give the bank permission to loan out the money in your account to 3rd parties. In return, the bank procures you with a fixed percentage of interest each year. Opening a cryptocurrency savings account requires you to invest your money into digital currencies like Bitcoin, Ethereum, or stablecoins. The savings account provider will proceed to loan out your cryptocurrency to borrowers, giving you a percentage of interest in exchange. If you don’t want to risk being exposed to cryptocurrency price movements, then you can also decide to earn interest on stablecoins which are pegged to the value of the U.S dollar.
Are you a crypto holder and you are just letting your assets sit in your crypto wallet with price fluctuations hoping it keeps rallying up but now you’d like to save your cryptocurrencies? crypto firms affiliated with the ecosystem offer a savings plan for users who’d wish to earn passive income on their crypto assets.
In this article, we are going to further enlighten you on some benefits of having a crypto savings account, the leading crypto savings account, and why crypto savings accounts could soon supersede the traditional savings bank account.
A cryptocurrency savings account gives you access to benefits such as having a passive income, higher returns, the safety of your crypto assets, additional incentives like tokens, and payment of interest using the dollar interest rate. Cryptocurrency savings account firms for newbies to get into the game includes firms like BlockFi, crypto.com, Nexo, etc.
A cryptocurrency savings account provides you with access to the cryptocurrency market while permitting you to earn ample higher interest rates than a regular bank savings account. Nonetheless, there are definitely more risks involved in earning income on crypto than earning interest from a traditional bank, hingeing on the digital asset you provide. If you’re interested in long-term cryptocurrency investing, a crypto savings account can help you gather interest while protecting your coins.
A cryptocurrency savings account is not in any way similar to a cryptocurrency wallet. The fundamental difference between a cryptocurrency savings account and a wallet is the potential to earn interest. When you save your funds in a cryptocurrency savings account, it will accrue interest over time. When you hold your coins in a wallet with keys that only you have access to, your investment will not accumulate interest — the number of coins in your wallet will always stay the same if you don’t withdraw them.
So, are you still wondering if you should open a cryptocurrency savings account? While a cryptocurrency savings account can produce extraordinarily outstanding returns for long-term investors, it’s vital to remember that the cryptocurrency market is recognized for its volatility. Cryptocurrency savings accounts might procure interest like a traditional savings account, but they don’t have the same financial protections that banking institutions have.