How To Invest Bitcoin (BTC)?

These days we have so many options to grow our bitcoin that its hard to pick one. However, it all comes down to your needs and goals. Understanding that you have options to invest your bitcoin but you also have the option to leave your bitcoin in your wallet. Its the safest option you have. If your current holdings do not suit your needs or goals. I understand why you would want to grow your holdings.

Below we will go through each option to grow your bitcoin including information about the risk vs reward. Because this isn’t financial advice but for educational information on your options. Its totally on you what to do with your bitcoin.

Invest Bitcoin In Lending/Savings Interest

Earning interest on your bitcoin is similar to having a savings account with a bank using fiat. Banks lend fiat out, gain a profit, and pay you a small interest. These companies will do the same in the crypto space. So remember at the end of the day, you’re trusting a 3rd party to hold your funds and pay you interest on those funds. Besides looking at the annual percentage rate (APR) they offer you, also look into their business. Understand how they make money to maintain paying the interest rate being offered.

PROS
Holding BTC
Getting Paid In BTC
Passive Income
CONS
Limited Earning Potential
Don’t Control The Private Keys

Bitcoin Interest Offers

SitesCrypto.comStakeCubeBinance
APR1.5% up to 6.5%7.57%Varies Daily
Minimum Balance0.025 BTC0.0005 BTCNo Minimum
FlexibleYesYesYes
Locked TermsYesNoYes
CompoundNoYesNo
PayoutEvery 7 daysDaily (0.02%)Daily

Invest Bitcoin Into Staking Coins

While bitcoin itself isn’t a proof of stake coin. You can buy an altcoin that is proof of stake, stake the coin, and receive rewards. With the rewards, you can convert back into bitcoin to grow your holdings. If you don’t know what “proof of stake” is, read our staking page for quick details on it. There are a couple of options on how to do this;

  1. Buy the altcoin, transfer to your wallet, and solo stake the coin.
  2. Buy the altcoin, add your coins to a staking pool.

There are pros and cons to each option and you will have to decide what makes sense to you. Solo staking you get the reward to yourself. However, if you don’t have a nice size position in the altcoin, it will take a long time to receive rewards. In a staking pool, you receive rewards often, however, its smaller amounts than solo staking. Sure you can and probably will receive more rewards in a staking pool. The downside is you don’t control the private keys of your coins in the staking pool.

Either option is fine to do, so it comes down to what you’re comfortable with. Also, remember you have one more “risk vs reward” with an altcoin. The altcoin vs bitcoin could go up or down. You could be making an extra profit when selling your altcoin for a higher price than you bought it but you could also be selling your altcoin at a loss depending on the price vs bitcoin.

Before deciding on how to stake your altcoin. You want to pick 3-5 proof of stake altcoins in the top 20 marketcaps in crypto. I would recommend going with an exchange that has a staking pool. This will allow you to buy the altcoin, add to staking pool, and start receiving rewards asap without paying withdrawal fees to receive the altcoin in your wallet for solo staking.

Crypto Staking Pools

SiteCrypto.comBinanceKuCoin
FlexibleYesYesYes
Locked TermsYesYesNo
PayoutEvery 7 DaysDailyDaily

Invest Bitcoin Into Masternode Coins

Investing in a masternode coin is similar to investing in a staking coin. You will need to buy an altcoin but masternode coins have a set amount you need in order to set up a masternode as well as a server. This means you’re investing more bitcoin upfront than buying a staking coin. However, because of tech, you have options on how to go about getting a masternode setup.

  1. You buy x amount of the altcoin, move it to your wallet, pay for the server, setup the masternode, and receive rewards to your wallet.
  2. You buy x amount of the altcoin, move to your wallet, pay a professional service to run the masternode for you, and receive rewards.
  3. Can’t afford x amount then buy y amount, move altcoin to shared masternode service, and receive rewards.

Before we get into why you would want to go through any of this. Let’s talk about the altcoin options like we did with the staking coins. I cannot say pick of the top 20 market caps because there are no masternode coins in the top 20 at the time of writing this article. We will have to look at the top 100 just to find 2 masternode coins.

If you want to reduce risk, enjoy the returns, and maintain a masternode. I would recommend looking into Dash. The first masternode coin and still the best masternode coin years later. You will need 1,000 DASH in order to set up a masternode. This does not include buying enough Dash to cover the withdrawal fee from the exchange itself and a little extra to cover any transaction fees on the network.

The current price of Dash is 0.00781463 BTC per coin. Some of you reading this article, I’m sure can’t afford this, and it is ok. There are other options, but let us stay focused on Dash for the moment. Let’s say you have 1,000 DASH in your wallet. You now have to pay for a Virtual Private Server (VPS), this normally will cost you around 0.00042 BTC monthly at the time of writing. Set up your masternode and receive rewards for securing the Dash blockchain. Currently, at the time of writing, a Dash masternode averages 57 DASH yearly.

For those that cannot afford a whole Dash masternode, you can use a shared masternode service like Stakecube. The service allows us to enter the masternode for 0.25 DASH per slot. This is perfect for a safe return in the masternode space, even if you cannot afford a whole masternode by yourself.

Since I can’t recommend any other masternode without feeling like you’re taking on more risk. I will say use your favorite search engine and research other masternodes as there are cheaper masternodes out there with higher returns but you will be taking on more risk. Just like staking coins, you are taking on an extra “risk vs reward” because the altcoin vs bitcoin is always changing. You could be converting your rewards into bitcoin for a profit per coin or at a loss. Although, as long as you still have your beginning amount of an altcoin, you’re never at a loss until you fully sell your position.

Investing Bitcoin Into Dividend Passive Income

Investing your bitcoin into dividend passive income is the last option I can explain from my personal experience. There are exchanges and online casinos that give you the option to earn dividends from their profits by holding their altcoin/token in your account. Some require you to lock the funds but we will get into that later.

In my personal opinion, out of all the options I have presented in this article. Going for a dividend income is the riskiest option out of them all. However, the rewards can be higher or lower than the other options because the company profits change daily. First, you will have to buy the altcoin, hold the funds in your account (or lock them in your account), and receive a cut of the profits daily. Now the question is, In what crypto do you receive the dividend. Each company has their own way of doing things. So to make things clear, I made a table below for you to clearly see what’s required and how you will get paid.

SiteKuCoinGraviexTrustDice
TypeExchangeExchangeCasino
Altcoin/TokenKCSGIOTXT (EOS Token)
Minimum6No MinimumNo Minimum
FlexibleYesYesNo
LockedNoNoYes
Payment Coin(s)KCSBTCEOS/ETH/BTC/USDT
Payment ScheduleDailyDailyDaily

Please understand that the more of the altcoin/token you’re holding, the bigger your percentage is of the overall total amount earning the dividends. I would only recommend this type of passive income to someone that uses these services often. Because if you like the service then why not get paid part of the profits.

Risk Management Investing Bitcoin

After you’ve read this article and you still want to invest your bitcoin in order to grow your holdings. I highly recommend some type of risk management. The basics of risk management are only risking 1 to 2% of your overall portfolio into 1 altcoin. If you truly believe in the altcoin you’re buying, I would say you can bump that percentage up to 5%.

Can you handle putting 5% of your portfolio into an altcoin and the next few days it drops 30%? If not, only go with 1 or 2%. If you truly feeling the investment and can handle wild swings by all means use 5% of your portfolio but nothing more than that.

If you have a small portfolio and buying any altcoin is more than 5% of your portfolio. You can either take a risk and build your portfolio with one of the options above. Or you can add more bitcoin to your portfolio by investing your time into crypto faucets, crypto mining, or crypto gaming without risking your current holdings.

I hope you learned something today and may your portfolio grow stronger because of it.