Earning passive income with cryptocurrency is a way to put idle assets to work without taking on the stress of active trading.
Staking, interest accounts and DeFi tools can generate returns, but they differ in complexity, risk and accessibility. The right choice depends on your timeline, how hands-on you want to be and how much volatility you’re prepared to tolerate.
Disclaimer: This page is not financial advice or an endorsement of digital assets, providers or services. Digital assets are volatile and risky, and past performance is no guarantee of future results. Potential regulations or policies can affect their availability and services provided. Talk with a financial professional before making a decision. Finder or the author may own cryptocurrency discussed on this page.
7 ways to earn passive income with crypto: ordered by difficulty
Not sure which method you’d like to use to earn passive income with crypto? Browse this handy chart to evaluate different options by level of effort, risk, yield potential or the type of crypto user you are. Select the link to learn more about each method.
Staking lets users lock crypto to support blockchain operations and earn periodic rewards. It’s available through major exchanges, wallet apps and direct delegation to validators.
Rewards and risks vary by network. For example, custodial platforms like Coinbase and Binance handle everything but require giving up control of your keys. Meanwhile, non-custodial options let you retain full ownership but require more setup and oversight.
Platform
Est. APY
Coins Supported
Custodial
Notes
Learn more
Kraken
Up to 17%
ETH, DOT, SOL, ADA + 21 more
Yes
Offers both flexible and bonded staking; bonded has a lockup period
Staking begins with choosing the right platform and coin. Not every asset is eligible, and not all platforms offer the same terms or security. Prioritize platforms with a clear track record and transparent staking policies.
Choose a staking platform and supported coin. Look for providers that support the crypto you hold or plan to buy. Some platforms offer native staking, while others pool funds or act as intermediaries.
Create and verify your account. Regulatory compliance usually requires identity verification before funding an account. Expect to upload documentation and complete Know Your Customer (KYC) steps. The crypto exchange will verify your identity by requesting documents like a government-issued ID and proof of address to comply with financial regulations.
Deposit or buy crypto and activate staking. You can typically stake assets directly after purchase or after transferring them in. Some platforms offer auto-staking; others require manual activation.
Monitor rewards. Returns vary by asset, platform and lockup duration. Check reward frequency, compounding options and whether you can track performance in real time.
Risks and fees of staking
Staking offers yield, but not without conditions. Earnings are tied to specific protocols, network behavior and custodial arrangements. Be sure you understand the risks before locking up your assets.
Lockup periods. Many staking arrangements require you to commit assets for a set time. Early withdrawals may be restricted or penalized, reducing flexibility during volatile market periods.
Slashing risk. On proof-of-stake chains like Ethereum or Cosmos, validators can be penalized for downtime or misconduct. If you stake through a validator, part of your funds may be at risk.
Platform staking fees. Some providers may take a percentage of your staking rewards as a fee. These rates vary widely and can impact your long-term returns. Read the terms carefully before committing funds.
Crypto staking income calculator
Estimate your potential staking rewards based on your investment amount, annual percentage yield (APY) and time horizon.
Staking Rewards Calculator
Estimated Staking Results
Rewards: $0.00
Total Value: $0.00
2. Crypto cashback credit and debit cards
If you spend fiat using a crypto rewards card, you can earn cash back in cryptocurrency. Rewards typically range from 1% to 5%, depending on the card and how much you use it. Most cards allow you to redeem, convert or reinvest your earned crypto.
Get $100 from Finder Get a $100 Visa gift card when you sign up for a new Crypto.com account by December 5, 2025 and trade at least $500 within 30 days of signing up.
Not launched yet, but join the waitlist for a chance to win 0.25 BTC
Venmo
Credit card
Up to 3%
BTC, ETH, litecoin, bitcoin cash
“Cashback-to-crypto” auto-purchase option
How to get started
Card application. Apply through the issuer’s official site. Approval depends on your credit profile and location eligibility.
Funding setup. Link a bank account or preload the card with crypto, depending on how the card operates.
Earning rewards. Use the card for purchases to automatically earn crypto back, typically in real time or on a set schedule.
Risks and fees of crypto cashback credit and debit cards
Foreign transaction fees. Some cards apply additional fees when used internationally. Read the fine print to avoid unexpected charges.
Volatility in reward value. Because rewards are paid in crypto, their value can fluctuate significantly before redemption.
Automatic conversions. Some cards convert earned crypto at the moment of the transaction, potentially locking in poor market rates.
3. Interest-earning crypto accounts
Earn passive income through interest-earning accounts connected to your crypto trading. These accounts are typically custodial, offer Federal Deposit Insurance Corporation (FDIC) insurance through partner banks and have no lock-up period. They provide a lower-risk way to earn passive income compared to staking or crypto-based yield products.
Create an account and complete identity verification. These accounts typically require full KYC to meet financial regulations.
Deposit USD. You fund your account with US dollars via bank transfer or a linked payment method.
Activate the interest program. Opt in to the platform’s rewards or earn feature. Some accounts may enroll you automatically.
Start earning interest. Interest accrues on your USD balance and is paid out as crypto, mostly commonly BTC.
Risks and fees of interest-earning crypto accounts
Platform Risk. While FDIC insurance covers bank failures, it does not protect against the failure of the platform itself. In such cases, recovery of funds may depend on the platform’s ability to manage and segregate customer assets appropriately.
Interest rate variability. The APY offered by these accounts can change over time, so you could end up earning less than expected.
State availability. Some platforms have geographic restrictions. For example, Uphold’s USD Interest Account is not available to residents of Colorado, Louisiana and American Samoa.
Crypto APY calculator
Calculate how much interest you could earn by depositing USD or stablecoins into a crypto interest account.
APY Interest Calculator
Estimated Interest Result
Interest:
$0.00
Total Value:
$0.00
4. Crypto exchange tokens with dividends
Some cryptocurrency exchanges distribute a portion of their trading revenue to users who hold their native tokens. These dividend-style rewards vary by platform, token utility and user activity. Participation often requires holding the token in a custodial wallet on the exchange itself.
Cryptocurrency
How it works
Learn more
KuCoin Shares (KCS) from the KuCoin exchange
50% of KuCoin trading fees are distributed among KuCoin Share (KCS) holders
Currently (January 2019) that’s equivalent to about 6% per year returns
45% of net trading fee profits are distributed proportionally to BIX holders
Account snapshots are taken each Friday and rewards distributed once per week
To earn the rewards you have to be holding the coins on the exchange and have traded at least once that week on the exchange
BridgeCoin (BCO) from the CryptoBridge exchange
50% of trading profits from CryptoBridge are distributed to BCO stakers
More tokens staked means higher rewards
Staking tokens requires choosing a lockup period — tokens cannot be withdrawn from a lockup period and longer periods mean higher rewards
The staking options are 1 month (no bonus), 3 months (20% bonus), 6 months (50% bonus) and 12 months (100% bonus)
COSS from the COSS (Crypto One Stop Shop) exchange
50% of trading fees are distributed to COSS holders
Rewards will take the form of a small amount of a wide range of cryptocurrencies
You can hold COSS tokens on the exchange for an easier collection of rewards or set up deposits to an external COSS wallet
How to get started
Buy the token on its home exchange. These tokens are usually only eligible for rewards when held within the platform that issued them.
Hold in an exchange wallet. External wallets typically do not qualify. Rewards are calculated and distributed based on daily or weekly balance snapshots.
Meet any holding or trading activity requirements. Some platforms require a minimum balance or active trading to qualify for rewards or full payout eligibility.
Risks and fees of crypto exchange tokens with dividends
Platform dependency. Rewards are only as reliable as the exchange issuing them. If the platform underperforms or halts operations, returns may stop entirely.
Volatility. Token value is subject to significant price swings, which can reduce or eliminate effective yield even if reward rates remain stable.
Reduced utility during bear markets. Trading volumes drop in down markets, shrinking revenue pools and lowering dividend payouts for token holders.
5. Airdrops, forks and buybacks
Many cryptocurrencies will have regular or irregular buybacks, token burns, airdrop arrangements and more.
Airdrops. Get new cryptocurrencies dropped into your wallet based on your current holdings. These are often arranged ahead of time and are seen as a way of seeding a new cryptocurrency onto a field of users. Airdropped cryptocurrency will usually be worthless, but can often do quite well for something that’s completely free.
Forks. When a cryptocurrency’s blockchain is forked, it sometimes creates a snapshot of a user’s holdings on the chain. The user will then get commensurate holdings on the new fork of the blockchain while keeping their old holdings.
Burns and buybacks. Your cryptocurrency is purchased back by smart contract or the creator company and is typically destroyed afterwards, often growing the value of the token in the process.
You will typically need to hold the cryptocurrency in your own personal wallet to take advantage of forks and airdrops. If you have the funds on an exchange, the exchange will get the funds instead.
The following cryptocurrencies have buybacks and token burns as a feature. However, though coin burns do affect the circulating supply, historically, they’ve tended to have no immediate price impacts. Some of these are regularly planned buybacks, while others are periodic or one-off buybacks.
Cryptocurrency
How it works
MEXC (MX)
Allocates 40% of quarterly profits to buybacks and burns, aiming to maintain a 100 million token supply.
Hyperliquid (HYPE)
Uses trading fees to buy back and burn tokens; over $795 million worth removed via the Assistance Fund.
Bitget (BGB)
Burned 800 million tokens in 2024; plans quarterly burns funded by 20% of platform profits.
MakerDAO (SKY)
Conducts daily buybacks of ~$1 million in SKY using protocol surplus until a cap is reached.
Zebec (ZBCN)
Resumed monthly buybacks in 2024 based on transaction volume from Zebec Cards and integrations.
BONK
Built-in buyback and burn system launched in 2025, funded by a portion of platform transaction fees.
How to Get Started
Use eligible wallets. Many airdrops and forks require self-custodied wallets to qualify. Exchange wallets may not capture snapshots or pass along tokens.
Watch for announcements. Projects typically pre-announce events on social media or via official blogs. Join project channels to stay updated.
Track snapshot dates and registration deadlines. Eligibility often depends on your balance at a specific moment or on completing signup tasks before a deadline.
Risks and fees of airdrops, forks and buybacks
Scam airdrops. Fraudulent projects may impersonate real ones to collect personal data or seed malicious tokens.
Phishing attempts. Never input your private key to claim an airdrop. Legitimate distributions do not require this.
Illiquid new tokens. Even when legitimate, many airdropped or forked tokens have limited demand or low exchange listings, making them hard to trade or convert.
6. Masternode cryptocurrencies for income
Running a masternode means hosting a dedicated server that supports a blockchain network in exchange for ongoing rewards. It requires a substantial initial investment in collateral and a high level of technical setup and maintenance. Masternodes are typically used in networks like Dash, PIVX and Zcoin.
Cryptocurrency
How it works
Learn more
Dash
10,000 DASH is required as collateral
45% of the reward for each Dash block goes to masternodes, while miners also get 45%
But because masternodes are relatively less numerous, the rewards tend to be higher
A set proportion of the block rewards go to masternodes and will vary based on how many nodes there are
PIVX Coin (PIVX)
10,000 PIVX is required as collateral
Rewards are divided between the numerous stakers and less numerous masternodes, and so will average higher for masternodes
Stratis (STRAT)
250,000 STRAT is required as collateral
Masternodes pick up a portion of the Stratis network fees in return
How to get started
Purchase required collateral. Each network mandates a fixed amount of its native token to activate a masternode. This is often a five-figure dollar equivalent or more.
Set up a VPS or hosted masternode service. You can either self-host the node or use a third-party service. Both options require technical configuration and constant uptime.
Configure wallet and node. Follow the network’s documentation to link your collateralized wallet to the running node. Misconfiguration can result in loss of rewards.
Start earning. Once the node is validated by the network, it begins earning a share of block rewards on a regular schedule.
Risks and fees of masternode cryptocurrencies for income
High startup cost. Masternodes often require tens of thousands of dollars in locked collateral, which may not be liquid or usable elsewhere.
Technical failure. Downtime or misconfigured nodes can result in missed rewards or removal from the network rotation.
Price depreciation. Since rewards are paid in the native token, a decline in its market value can erode your effective returns.
7. DeFi yield farming
DeFi yield farming involves depositing crypto into decentralized protocols to earn returns through trading fees, lending interest or token incentives. Platforms like Uniswap, Curve and Yearn Finance offer varying strategies and risk levels. While yields can be attractive, the technical complexity and exposure to smart contract risk are significant.
Protocol
Method
Yield
Risk Level
Notes
Uniswap
Liquidity pools
Varies
Medium
Impermanent loss risk
Yearn Finance
Auto-yield vaults
Varies
High
Optimized strategies
Curve
Stablecoin pools
4%–10%
Medium
Focus on stable yields
How to get started
Connect a Web3 wallet. Use a browser-based wallet like MetaMask or WalletConnect to interact with DeFi protocols directly.
Choose a pool and deposit liquidity. Select a strategy aligned with your risk tolerance, such as stablecoin pools, auto-compounding vaults, or token pairs.
Approve contract interaction. DeFi apps require user authorization to access your wallet’s tokens. Always verify the contract before approving.
Claim and restake rewards if desired. Most platforms distribute rewards regularly, and users can manually harvest or reinvest them into the same or new strategies.
Risks and fees of DeFi yield farming
Smart contract exploits. Vulnerabilities in protocol code can result in partial or total fund loss. Audits reduce risk but do not eliminate it.
Impermanent loss. Providing liquidity to volatile pairs may result in lower total value compared to holding the tokens outright.
High gas fees on Ethereum. Transactions like deposits, approvals and claiming rewards can become expensive during periods of network congestion.
DeFi yield farming calculator
Project your DeFi farming returns based on the amount invested, APY, duration and protocol used.
DeFi Yield Farming Calculator
Estimated Yield
Interest Earned: $0.00
Total Value: $0.00
Advanced strategies
Once you’ve established a passive income base, optimizing your returns comes down to compounding, consistency and thoughtful allocation. These strategies require more planning but can increase your passive income over the long term.
Compounding staking rewards. Reinvesting earned rewards back into the staking pool increases your principal, allowing future payouts to grow faster over time. Some platforms offer auto-compounding, while others require manual action.
Reinvesting cash back. You can use your cash back from crypto rewards cards to purchase additional assets or fund staking, interest or yield farming strategies. This practice keeps small earnings productive rather than idle.
Dollar-cost averaging into yield platforms. Investing fixed amounts on a regular schedule smooths out volatility and builds exposure to APY-generating protocols without the need to time the market.
Portfolio allocations. Dividing funds across multiple strategies — such as 30% in stablecoin lending for lower risk and 40% in staked ETH for growth — helps balance yield potential with volatility management.
How to earn even more free crypto
While not completely passive, some platforms and services offer small amounts of free bitcoin and other crypto for completing simple tasks, making this a low-barrier strategy to get started with cryptocurrency.
Here are the most common ways to earn free crypto:
Signup bonuses. Many crypto exchanges and platforms offer welcome bonuses for new users who create an account and meet basic conditions, such as verifying their identity or making a small deposit.
Earn programs. Platforms like Coinbase, Binance and Bitget reward users with free tokens for completing short educational modules. You’ll watch a few videos or read brief explainers, then take a quiz. If you pass, you get rewarded in the coin you just learned about.
Referral bonuses. Most exchanges offer referral programs where you can earn crypto for inviting friends. Payouts vary, but both you and the person you refer may receive free bitcoin or USDT once they register and trade a certain amount.
Testnet participation and beta testing. Some blockchain projects offer token rewards to early users who interact with testnet features or beta versions of their dApps. These tasks can include bridging tokens, submitting bug reports, or providing feedback during public testing phases.
Social media and community campaigns. New projects often run giveaways or bounties through platforms like Twitter, Discord or Telegram. You might be asked to share posts, follow accounts, or complete small social tasks in exchange for a small crypto payout.
Crypto trivia and gamified learning. Apps like CoinMarketCap’s Learn and Earn or Revolut’s crypto quiz feature reward users with small amounts of tokens for answering trivia questions or completing interactive lessons. These tasks are low-risk and typically take under five minutes to complete.
Tax considerations
Crypto passive income is taxable in most jurisdictions and the reporting requirements can be complex depending on the methods you used. Proper tracking and documentation are essential to avoid penalties and ensure compliance.
Staking rewards as income. In the US, staking rewards are considered ordinary income. You must report the fair market value of the rewards on the day they’re received, not when they’re sold.
DeFi complexity. Yield farming, liquidity pooling and token swaps can create multiple taxable events. Entering or exiting a liquidity pool may trigger gains or losses, and impermanent loss may require manual adjustments depending on IRS guidance.
Record-keeping tools. Tax software and platforms like Koinly, CoinTracker and ZenLedger can help automate transaction tracking, calculate gains and generate tax reports compatible with US filing requirements.
General reminders. Track staking and APY payouts regularly, be aware of IRS rules for crypto assets and watch for 1099-MISC forms issued by platforms that distribute over $600 in rewards annually.
Always consult a qualified tax professional for guidance based on your individual financial situation. Crypto tax laws are evolving and can vary significantly by state.
Bottom line
Crypto passive income methods range from staking and interest accounts to cash back, masternodes and DeFi. Each varies in complexity, yield and risk. Start with lower-risk options and use the tables and calculators above to compare strategies.
Ready to begin? Explore the best crypto exchanges to choose a platform and get started.
Frequently asked questions
What’s the safest way to earn passive income with crypto?
Staking major assets through a reputable exchange or using insured interest-bearing accounts for stablecoins are among the lowest-risk options. These methods are simpler to manage and carry fewer technical or market risks compared to advanced strategies like yield farming.
How do I avoid scams when staking or farming?
To avoid crypto scams, stick to well-known platforms, verify URLs and never share your private keys with anyone. Be wary of unsolicited offers or social media messages that promise unusually high returns, and use tools like CoinGecko or DeFiLlama to verify project legitimacy.
Can I lose money in yield farming or staking?
Yes. Yield farming exposes users to smart contract risk, token volatility and impermanent loss. Even staking carries risks if the underlying asset loses value or if slashing penalties are triggered due to validator misbehavior.
Holly Jennings is the deputy crypto editor and updates writer at Finder, working with writers across all niches to deliver quality content to readers. She’s edited hundreds of financial articles ranging from credit cards to investments. With empathy at heart, she especially enjoys content that breaks down complex financial situations into easy-to-understand information. Prior to her role at Finder, she collaborated with dozens of small businesses to maximize the reach and impact of their blog posts, website copy and other content. In her spare time, she is an award-winning author for Penguin Random House, writing about virtual reality worlds, magical girls and lasers that go pew-pew.
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Put those cryptocurrency assets to work in the DeFi sector with yield farming.
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