How to Earn Interest on Bitcoin Cash?
Bitcoin Cash is a fork of Bitcoin, and though it is not as popular as Bitcoin, hodling Bitcoin Cash has proved very profitable for many crypto users. It has been ranked among the top 20 cryptocurrencies by market cap for the majority of a period of its existence. If you are hodling Bitcoin Cash, you can earn even more while depositing BCH in an interest account. Follow the steps below to earn interest up to 7.2% on Bitcoin Cash:
- Sign up for an Interest Account
To begin earning interest on Bitcoin Cash, go to the website of a BCH interest account provider. Now, go to the registration page and provide your name and email address. Once you have entered the details, click on the submit button.
- Verify Your Interest Account
Check for a verification link from the interest account provider as it contains an email verification link. Click on the link to verify your email address. Even after verifying your email address, your account is not ready yet, to earn interest on Bitcoin Cash. For that, you must activate your account by completing the KYC process.
In the KYC process, you will have to submit your personal details like address, nationality, among other things. Additionally, you will also have to upload a government-issued identity card like a driving license or any other relevant documents. You will also need a photo of yourself holding the same card during the process. Once you have added the information and uploaded the documents and the photograph, click on the submit button.
You will soon receive an email about successful KYC verification if everything is in order and you have followed the process as per the instructions of the interest account provider. Depending upon the interest account provider you chose, you will receive an email within the next few days.
If you want to earn interest on BCH from a DeFi interest account provider, the process becomes even easier. The reason is that you do not have to sign up for an interest account on a DeFi platform. A DeFi interest account provider does not even ask for any KYC process.
- Deposit Your Bitcoin Cash
Once you receive a KYC verification email from the interest account provider, your account is ready for earning interest. Now is the time to deposit Bitcoin Cash into your account. Go to a page that lists all the supported cryptocurrencies for deposit. Click on Bitcoin Cash or BCH to receive a unique wallet address.
Copy the wallet address & paste it on the BCH wallet withdrawal page. Now enter the amount of BCH you wish to withdraw and click on the withdrawal button. You will soon receive Bitcoin Cash in your interest account.
- Start Earning Interest
Depending on the platform you choose, the interest accrual will begin within 24 hours or after 24 hours after your interest account receives BCH. You do not have to do anything else once you receive BCH in your interest account, as the interest accrual will begin automatically. You can also use Bitcompare's Bitcoin Cash income calculator to calculate your interest earnings on Bitcoin Cash.
Why Earn Interest on Bitcoin Cash?
If you are hodling Bitcoin Cash in your wallet, you will only benefit when the prices of BCH start rising. But if you deposit BCH in your interest account, you will be multiplying your profits while hodling. It means that you will earn interest on Bitcoin Cash and also benefit from the price appreciation of Bitcoin Cash at the same time. Also, the interest that you earn on Bitcoin Cash is more than what many banks offer on fiat currencies.
- Easy Process
Earning interest on BCH is very easy as it involves a 3-step process. Sign up for an interest account, complete the KYC process, and deposit Bitcoin Cash. The interest accrual will begin soon as the process is automated on most crypto interest provider platforms.
If you choose a DeFi interest account provider to earn interest on Bitcoin Cash, the process will be even easier. You do not need to sign up for an account on a DeFi platform and nor do you have to complete any KYC process. Connect your wallet such as Trust Wallet & Metamask with the DeFi platform. Once your wallet is connected to the DeFi platform, deposit BCH to your interest account and begin earning interest on it.
- Low Risk
Overall, the risk of earning interest on BCH is comparatively lower. Most crypto interest account providers share a part of their income with their interest account holders in the form of interest, which they earn by lending cryptocurrencies and fiat currencies to borrowers. As their main business involves lending cryptocurrencies and fiat currencies, there is a risk. But most of the interest account providers manage the risk by making over-collateralization mandatory for the borrowers.
- Passive Income
Once interest accrual begins, you will even earn while you are asleep. By signing up for an interest account and depositing BCH, you will see the magic of passive income, and your crypto wealth will continue to grow.
Where can I earn Interest on Bitcoin Cash?
There are multiple interest account providers offering interest on Bitcoin Cash. But the leading ones are Celsius Network, Nexo, and YouHodler.
With Celsius Network, you can earn interest up to 5.66% on Bitcoin Cash. To earn 5.66% interest on your Bitcoin Cash deposit, you must agree to receive an interest payout in CEL tokens. But you must be a resident of a country other than the United States to receive interest payout in CEL tokens as US residents can only earn the in-kind reward rate on Celsius Network. The current in-kind reward rate on BCH is 4.51%. An international user will also receive 4.51% interest on Bitcoin Cash if they do not want to receive interest payout in CEL tokens.
Nexo offers interest up to 6% APY on Bitcoin Cash. But Nexo has multiple criteria that you must meet to become eligible to earn the highest interest rates Nexo offers. First, you must agree to receive interest payout in NEXO tokens, the native token of the Nexo platform. Then, you must hold 10% or more of your investment portfolio on Nexo in NEXO tokens. Also, you must agree to lock your BCH funds for a one or three-month period. If you meet all these criteria, you will earn 6% interest on your BCH deposit. As for the minimum deposit requirement, Nexo does not mandate depositing any minimum amount of Bitcoin Cash to earn interest.
With a YouHodler interest account, you can earn 5.5% interest on your BCH deposit. YouHodler does not mandate depositing any minimum amount of BCH to begin earning interest. Also, there are no specific criteria that you should meet to earn 5.5% interest on your Bitcoin Cash deposit. YouHodler pays interest every week, and you are free to withdraw your funds anytime you wish.
Is it Risky Earning Interest on Bitcoin Cash?
Yes, it can be risky if you do not do your research well. We must also understand the risks involved in earning interest on Bitcoin Cash to do it safely. The first thing that you should know is that the interest the platform pays to its interest account holders comes from the income. They generate income by lending cryptocurrencies and fiat currencies. You must know that they also use your funds for lending if you are their interest account holder. But most of the platforms make over-collateralization mandatory, and that is how they manage the risks.
Some platforms do not require over-collateralization from their borrowers. If you are choosing such a platform, your funds will be at a comparatively higher risk. They will offer higher interest compared to other platforms. But you must understand that the risks are higher as well.
If some of their borrowers' default on their loans and the collateralized assets start losing value, the platform will face losses. In this case, the platform cannot meet its obligations of offering the interest rates it promised. Now, if the number of loan defaults becomes bigger, the platform can also go bankrupt. Once the platform goes bankrupt, its interest account holders will lose their funds.
Many interest account providers have insured their user funds today. But if the insurance amount will be enough or not will depend on the amount of losses. If the losses are less than the insurance amount, interest account holders will receive their full funds back. If not, the platform will only refund a partial amount. Thus, you must do your research well to choose a credible and safe interest account provider. To know more about almost every major interest account provider, you can also check out the honest reviews on them by Bitcompare.
What to Look for When Choosing a Platform?
The process of choosing a platform is the most crucial part of earning interest on Bitcoin Cash safely. While choosing a platform, you must check and ensure that the platform meets some important criteria. The two most important factors are the interest rates and how long the crypto interest provider has been in the industry. Do not consider only interest rates while choosing a platform as many new and unreliable interest account providers may offer you the highest rates, but they are also comparatively riskier.
The next thing that you should check is if the platform has insured its user funds or not. It is a crucial factor as if the interest account provider loses its funds for any reason or goes bankrupt, the insurance company is liable to pay the insurance amount to the platform. A large part of insurance funds will go to the interest account holders of the platform. The amount that the interest account holders will receive depends on the amount of losses. If the insurance amount is enough to cover the entire user funds lost, every interest account holder will receive their funds in full. Otherwise, they will only receive their funds partially.
Now, check what criteria does the platform have for earning the highest interest rates. Many require their interest account holders to receive interest earnings in their native tokens. Some will ask its users to deposit a minimum amount of Bitcoin Cash on the platform and lock the funds for a specific duration to earn the highest interest rates. Some won't ask its interest account holders to meet any specific criteria.