How to make passive income with Exchange Tokens

Most of us if not all are here for the money. And everybody wants to make money one way or another. Some people trade, some people blog and some people are after what we call passive income. One of my main focuses is this area and I am always searching for ways to make my hard-earned money ( crypto or fiat ) work for me.

There ways to create passive income and I will share and explain a method that I use. Enter Kucoin and Bitmaxx exchanges.

Kucoin Exchange

The KuCoin Exchange opened for cryptocurrency trading in September 2017 and it is located in Seychelles. Recently it made the news in a very negative way since it was hacked for more than 150 M dollars. They recovered most of the funds but I think the damage was done and I would be keener to suggest them if it hadn’t been for that incident. It is still in the Top 10 exchanges according to Coinmarketcap if this ranking is any worth. On the other hand, one could say that right now due to the incident is undervalued but in reality, no one knows and everybody is responsible for his own actions. I don’t think I will regret my investment in the long run.

And speaking of regrets, allow me to share my biggest regret in my crypto journey. I had discovered Kucoin a little after they had opened and I got their token very cheap. I managed to purchase a thousand of them and when they hit their peak they were priced 20 dollars each. Did I sell? No, I was stupid and greedy and wanted 25000 dollars. You know the rest of the story … Prices collapsed and panic sold at a couple of dollars each. Still made a profit, but … In hindsight, I shouldn't have sold them since I didn’t need the money and I would have 2 years' worth of earnings in crypto. Anyway, what’s done is done this time I’ll keep my coins for the rewards and sell a portion to have my capital back.

Bitmax

BitMax.io is a Singapore-registered digital asset trading platform servicing retail and institutional clients across the globe and was formally launched in August 2018, making it one of the “youngest” exchanges in Coinmarketcap’s Top 25. Being two years old and hitting Top 25 with a good daily volume shows the potential for growth and improvement. One outstanding feature is that they have copy trading functionality and even though I am opposed to the idea of copy trading as being too risky, it is a feature that they have for anyone to try.

I don’t have any personal or other stories about this one, so let’s see how you can earn passive income.

Tokens and earnings

In both cases, the principal is the same. One portion of the fees goes back to holders of the exchange token. So if you have KuCoinShares ( KCS ) or BTMX you get a daily share of the profit each day of the exchange according to the number of tokens you have. So the more volume they have and the more tokens that you possess the greater is your earnings.

In KuCoin the only thing you have to do is keep KCS in your main account and every day or so login to collect your earnings. Earnings are paid in KCSs which to an extend is more convenient. So you can choose to compound your KCSs or sell them for other assets or do both.

In BitMax you have to register your BTMX at the investment program and to my knowledge, they are not locked. The difference between KuCoin and BitMax is that BitMax pays you in Tether, BitCoin, Ethereum and a couple more stable coins. So, you can trade them or if you want to compound you have to convert them and register the new tokens.

I have no problem with both approaches and for the time being, I just compound my earnings.

And now the money question…

How much can someone earn with this method ???

With KCS I estimate APY of 15% and with BTMX 12-14%. Bitmax advertises earnings of 20% per year, but my actual earnings are in the above range, which is totally fine. I take 15% per year and I am very very happy.

PROs and CONs

What you get is a totally passive income. All you have to do is a couple of clicks per day or week if you are that lazy. And you have the bonus of the appreciation of the token itself.

The risk is that you depend on a third party. The exchange can get hacked or go bankrupt.

We are all adults and take responsibility for our actions.

Here’s my take: I am ok with my funds being to an exchange and the KYC process that will be required to withdraw funds. These two coins make up 15% of my crypto portfolio and it is a long-run investment. I am pretty confident that these two businesses will not fail but until then I will have sold some coins to get my capital back. And I see that APY 15% is not sustainable and I expect it to be reduced in the future. If it drops below 10% I will rethink my strategy, if they continue giving these fat “dividents” I will compound half and withdraw half and will be satisfied.

Do you have any forms of passive crypto income?

I am all ears…

Of course, I am no financial advisor and this is not financial advice. Do your own research, consult with a professional. This post is for educational purposes only.

And until we all live out of passive income

Be healthy and smile !!!

PS : These are my referral links … You know the drill …

Kucoin : https://www.kucoin.com/ucenter/signup?rcode=E45BYb

BitMax : https://bitmax.io/register?inviteCode=ZRWZF0SU

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