The Bitcoin Savings Account: A Safety Net During a Pandemic
This year, we’ve all gotten a glimpse of what it’s like for the world to get turned upside down. While many people have turned to different hobbies to pass the time during the COVID-19 pandemic, Bitcoin investing and opening a Bitcoin savings account should be at the top of your list of things to do. If you are fortunate enough to have extra income, which many people are due to decreased spending overall, you want to be smart about how you use your resources and in what manner you save your money. 2020 has thrown many curveballs our way and everyone has adjusted to the pandemic differently. According to The Atlantic, “Super-Savers” have been hoarding money since the lockdown and a Bitcoin savings account is the best money managing storage out there.
What Is a Bitcoin Savings Account?
For experienced and newcomer investors alike, a Bitcoin savings account may be the more profitable option than a traditional savings account. The two are similar in that you deposit your assets into a third-party account, where it can gain interest but that’s where the similarities end. A Bitcoin savings account specifically earns interest on your crypto assets. Account providers will loan out your Bitcoin to traders for a certain amount of time. In turn, these borrowers will pay you interest (in the form of cryptocurrency) on your investment and you turn a profit.
A Greater Risk, A Greater Reward
There are certain key factors to consider when pursuing a Bitcoin savings account. In uncertain times, you want to make smart financial decisions and invest wisely. When comparing a Bitcoin savings account to a traditional savings account, you don’t want to leave any stone unturned.
FDIC Insurance
Bitcoin saving accounts do not have access to the $250,000 coverage that the Federal Deposit Insurance Corporation (FDIC) provides to secured banks. Cryptocurrency is an ever-changing and constantly growing field, advancements in money-saving technology and regulations are made daily. It’s vital to understand that a Bitcoin savings account is an investment and with any investments, you take the chance to secure a better future. The currency has to make the leap into cash to be considered for FDIC protection. In order to keep your Bitcoin savings account secure, you’ll need to do your research into impregnable Bitcoin savings account providers, who have your best investment at heart. Providers have their own protection through custodians, like Gemini or Anchorage, who secure crypto keys and safeguard investor identities.
Your Best Interest
Many turn to Bitcoin investing because of the higher interest yield. The interest rate of a Bitcoin savings account could be anywhere from 4% and often, with some stable coins, much higher. Anyone with a traditional savings account knows that it’s nearly impossible to get an annual percentage yield above 0.9%. You might as well watch paint dry. At least at the end of staring at a wall, you’ll have a nice looking paint job. With a Bitcoin savings account, you can passively earn interest almost instantly and on an ongoing basis. There are account providers who will begin paying you interest on the same day you opened up your account. Bitcoin savings accounts can offer competitive interest rates because of the age old price driver: supply and demand.
Supply and Demand Fluctuations
There is a predetermined supply of Bitcoins in circulation and new Bitcoins are created at a fixed rate. This rate decreases over time as Bitcoin miners mine more coins. Bitcoin mining is adding transactions to the Bitcoin ledger and creating new Bitcoins to roll into circulation. When the demand for Bitcoin is high, the price increases as the production of the supply has slowed to its fixed pace. Bitcoin savings accounts can afford to promise high yielding interest rates because they’re not printing money on demand.
Their Losses Aren’t Your Losses
Essentially, you’re a bank. You are lending out your Bitcoin through a third party and collecting interest from that loan. The Bitcoin traders who incur losses have nothing to do with you. Your initial investment is only impacted when the entire account provider struggles. You will have access to the original amount you invested at any time. Some Bitcoin account providers do have restrictions on the amount to be withdrawn or limit withdrawals to certain times of the day.
Your Next Bitcoin Savings Account
Here are a few Bitcoin savings account providers committed to transforming you into a Bitcoin investor today:
BlockFi - These interest bearing accounts lead in yields with an interest rate of up to 8.6%, depending on your investment and the type of cryptocurrency used. They offer crypto-backed loans, which allow you access the cash value of funds without having to sell your original Bitcoin investment.
Coinbase - This is a digital wallet that can also be used as a Bitcoin savings account. They broker digital currency transactions and exchanges. Coinbase also offers a whopping 1.25% interest rate on US Dollar Coins.
Nexo - Nexo utilizes the most efficient blockchain technology to yield high value amounts from cryptocurrency in the largest digital currency network. Currently, Nexo has a 10% of compounding interest that they pay out to consumers daily. They insure their customers’ assets up to $100 million and have no hidden fees.
Binance - Binance Lending offers Fixed Deposits, which allow you to set a predetermined time and interest for your investment, or Flexible Deposits, which have rates that fluctuate and flexible access to your funds. For first time investors, Binance is a great choice.
Withdraw Your Bitcoin with Pelicoin
Once you’ve set up your Bitcoin savings account, it’s time to let the Bitcoins sit and reap the rewards of your interest. When you’re ready, withdrawing your cryptocurrency from a Bitcoin savings account is easy. You simply transfer your Bitcoins into a secure Bitcoin wallet, then you can access any one of Pelicoin’s many Bitcoin ATMs across the country. Let the Pelicoin cryptocurrency ATM take your Bitcoins and put money in your hand today.