Earning extra income with your bitcoin

Suppose you own some bitcoin and you want to make your coins work for you. You want to make extra profit, without losing your exposure to the price. Selling your coins is definitely not an option for you. Luckily there are several options for you to earn extra money or bitcoin with your current stack. We walk you through the most important ones.

Staking

When you stake your bitcoin, you deposit your bitcoin to a third party that uses your bitcoin to generate returns. For this you are compensated, often in bitcoin as well, but some parties will also pay you in dollars or stablecoins. This is a good way to earn extra income on your bitcoin without losing any exposure to the price. This means that you still profit if bitcoin goes up in price.
STAKING BITCOIN

Selling futures

When you sell futures, while holding bitcoins in the right ratio you effectively lock in any premium that might exist between the spot (coin) price and the future price. This is called a 'cash-carry trade'.
TRADING FUTURES

Trading options

When you trade options, while having bitcoin in the right ratio, you are trading the implied volatility of bitcoin. By selling OTM calls for example, you can earn extra income by capping your potential upside. Similarly you could sell puts to sell downside premium with a possibility of having to buy bitcoin at a lower price.
TRADING OPTIONS

Lending

When you lend out your bitcoin you get paid for your bitcoins, without losing the exposure to the bitcoin price. This is quite similar to staking.
LENDING OUT YOUR BITCOIN

Borrowing

When you borrow bitcoin you pay to use bitcoin you do not own. This way you can short sell bitcoin or set up an arbitrage trade by selling futures on the borrowed coins if the premium is bigger than the interest you pay.
BORROWING BITCOIN