In the world of Cryptocurrencies, every decision matters.
Should you leave your digital assets in your wallet, or should you start earning them to get more of them?
The choice between Holding and earning (staking) can revolutionize your investment strategy.
In this article, we will show you why earning (staking) is often a better option.
What is Holding and Earning (Staking)?
Holding - waiting for the profits
Holding means buying cryptocurrencies like Bitcoin or Ethereum and keeping them in a wallet. It is best to use a cold wallet for better security.
It is a strategy for the patient who believes that the price of their assets will skyrocket one day.
Holding is simple, requires no effort, but has one drawback: your crypto lies idle.
It doesn't get more, and you are at the mercy of market fluctuations.
If the price doesn't rise, your profits are zero.
Earning (Staking) - Cryptocurrencies that multiplies
Earning (Staking) is something completely different. In Proof-of-Stake (PoS) blockchains like Ethereum or Solana, you can lock your cryptocurrencies. This helps support the network by verifying transactions.
In return, you receive rewards in the form of additional coins.
It's like a bank deposit, only with a better interest rate - from 3% to even 17% per annum, depending on the coin.
Earning (Staking) is a way to earn more cryptocurrencies while supporting the development of the blockchain.
Why is Earning (Staking) better than Holding?
Earning money even when prices are not pumping
Holding relies solely on price increases, and the cryptocurrency market can be volatile.
Even if Bitcoin or Ethereum have gained in the past, waiting for the next pump - price jump is a lottery.
Your amount of cryptocurrency will not increase!
Earning (Staking) provides regular rewards that accumulate over time. For example, staking Ethereum can yield even 15% per Month.
It Is a stable way to build wealth, regardless of the market situation.
By reinvesting your rewards, you create a snowball effect - your profits will grow exponentially.
Your amount of cryptocurrency will increase!
Supporting cryptocurrency projects and blockchain networks
Holding does not contribute anything to the cryptocurrency ecosystem. Your coins remain in your wallet while you wait.
Meanwhile Earning (Staking) is active participation in the network and supporting cryptocurrencies projects.
Your cryptocurrencies help secure the blockchain and verify transactions, which supports decentralization.
It's not only profit for you, but also a contribution to the future of finance.
We should not forget the platform where you earn cryptocurrency. It makes money from fees and can invest in advertising. Cryptocurrency is getting more popular, and its price is rising.
As a result, your investments trigger a snowball effect.
Investment risk management
Holding seems safe because it avoids technical complications, but it comes with risks.
Price can reduce your profits, and online wallets are vulnerable to hacker attacks.
Staking has some risks, like slashing, which are penalties for validator mistakes. You can reduce these risks by choosing trusted platforms like Pionexa.com.
When the price goes down, it can lower your profits. However, since you earn cryptocurrency through staking, the losses are less noticeable or may not happen at all.
Stay Ahead of Token Inflation
Most PoS (Proof-of-Stake) networks have 3-7% inflation.
Not staking is like leaving a large amount of money in a non-interest-bearing account, it makes no sense!
You only lose out on inflation.
Real example: If everyone stakes except you, your wealth dilutes by 5% yearly.
The compound interest effect
Holding does not allow you to multiply your capital if the price remains unchanged.
Staking is a completely different story. The profits you reinvest generate further profits.
For example, 10,000 SOL at 7% APY could grow to over 17,000 SOL in five years.
That's the power of compound interest, which holding doesn't offer.
Are you wasting the potential of your cryptocurrencies?
The answer is simple: if you're just Holding, then yes.
Storing cryptocurrencies in your wallet means you miss out on earning passive income.
It also limits your active role in blockchain and crypto projects.
Well-known figures in the crypto world do staking
Famous people and companies like Andreessen Horowitz (a16z), Binance, and Coinbase invest billions of dollars each year in staking. This practice brings them large profits.
For example, in its Q3 2023 earnings call, Coinbase said, "Staking is a key part of our revenue strategy."
The Andreessen Horowitz (a16z) team said that staking is more than just making money. They quoted, "Staking isn't just about returns; it's about supporting the networks we believe in."
If big companies and famous people in crypto are investing a lot in staking, it must be worth it.
What about Cryptocurrencies that do not support PoS (Proof-of-Stake)?
This is where pionexa.com comes in handy.
We exchange tokens for ones that we can stake. We also reinvest them in various cryptocurrency projects.
We characterize these by high liquidity (low-risk investments) – we operate like a "bank."
Summary
You can use your cryptocurrencies for more than just storage in your wallet.
Staking lets you earn passive income and support blockchain and cryptocurrency projects. You can earn cryptocurrencies that you can't get just by holding them.
By utilizing platforms like pionexa.com, you can maximize the potential of your crypto assets. Instead of letting your tokens sit idle, you can convert them into more productive forms that generate returns. This process not only enhances your investment portfolio but also contributes to the overall growth of the cryptocurrency ecosystem.
Staking is particularly appealing because it allows you to earn rewards simply by holding and supporting a network. Many cryptocurrencies offer attractive staking rewards, which can significantly increase your holdings over time. Additionally, by reinvesting in various projects, you diversify your investments, reducing risk while potentially increasing your returns.
Moreover, the liquidity of the investments we choose ensures that you can access your funds when needed. This flexibility is crucial in the fast-paced world of cryptocurrency, where market conditions can change rapidly. By operating like a bank, we provide a safe and efficient way to manage your digital assets.
In conclusion, exploring staking and reinvestment opportunities can open up new avenues for earning in the crypto space. With the right strategies and tools, you can turn your cryptocurrencies into a source of passive income while actively participating in the growth of innovative projects. Don't just hold your assets—make them work for you!