Should You Earn Interest On Your Crypto?

By Derek McCloud, M.Ed

The Million Dollar Question, or should I say, the 16 Bitcoin Question is should you put some or all of your crypto in an interest-bearing account or store it offline on a cold wallet?

A cold wallet is when you store your crypto’s keys offline. Many traditional crypto investors will say this is the safest way to store your crypto. And they are right (technically). Your crypto is absolutely safe on your offline wallet as long as you 1) don’t lose your hardware wallet or stored keys (cold wallet), 2) protect it from being damaged by water, fire, and thieves 3) don’t lose or forget your password.”

*For more information about the benefits and usage of cold wallets check out Jake Snow's blog post.

If you are anything like me, I lose my car keys and my wallet at least twice weak. “Honey, have you seen my keys?” “Babe...where is my wallet?”

Just this fact alone makes me choose to use a hot wallet because I don’t want to store a massive amount of wealth on a ledger and lose it. Consider the man who threw away a hard drive with over 7,500 Bitcoin on it.

Or the guy who can’t remember his password to his ledger that has 7002 Bitcoin on it. At the current prices of around $60,000 each, that’s over 420 million dollars worth! DON’T be like these guys.

My friend Bryce said it this way, “Accidental self-sabotage from overcomplexity is the most common cause of losing crypto.”

A much simpler method of storing your crypto is using a hot wallet or storing your crypto with a crypto bank. A hot wallet is already online and you can buy or sell crypto immediately while using the app of your choice. When your crypto is stored with certain crypto banks, you are able to earn up to 6% interest or higher on your digital coins.


Think about the last time you went to a “normal” bank. I know, Covid and such, but TRY to remember back in the past. You go to the bank, you see several people with nice suits and dresses on, a secure building, maybe a police guard and other things that must surely cost a TON of money. How do they afford millions in overhead costs per bank? They do that because they are making a killing off of you storing your money there. If you give the bank $1,000, they are investing $900 of it and keeping the $100 just in case I need it. This is called fractional reserve and it’s practiced by all traditional banks. Fortunately, the bank is kind enough to give you a measly .01% interest on your money. Maybe you put your money into a really good money-market savings account and get a little more than 1%.

Traditional banks invest your money and make a fortune off of you.

When you store your Crypto with Celsius, BlockFi, Crypto(dot)com, or Voyager those banks are giving you 6% interest or higher on your crypto. These online banks have low overhead costs and can afford to do that.

Basically, consider this, my wife desperately wants a NEW car. In order to buy my wife a new car, will I cash out my Bitcoin, heavens NO, you HODL that stuff till we hit the moon!!

NEVER ever sell your Bitcoin until you reach your financial goals. #HODL (Hold On For Dear Life)

Q: Do I get a loan from the bank? A: NO, the banks are going to steal from you and laugh at you while they do that.

Perhaps, the wisest thing for me to do to buy a car for my wife is to get a loan off of the crypto that I do have and pay around 1% interest on it. Honestly, I don’t need banks anymore. Now, I AM THE BANK. With crypto, I can call the shots and just use my crypto as collateral for things I want/need.

This is just one of the many ways crypto banks are making their money and why they can give you 6% interest or higher on your crypto.

(Update since I wrote this blog.) Here is the car I bought my pregnant wife using my Bitcoin as collateral. This is a dream come true for us! <3 name

What are the risks of storing your crypto in an interest-bearing account?

#1 The crypto bank goes under or gets hacked. Fortunately, the crypto banks I am recommending are “insured” (they are not FDIC insured or insured by the gov’t, but they do have insurance from private companies. These crypto banks usually have enough resources offline and online to reimburse you should a tragedy befall you or the crypto banks.)

#2 See risk number 1.

Conclusion: There are risks involved whether you choose to invest in crypto or choose not to invest. The US dollar is losing value/ purchasing power as we speak due to inflation while the price of Bitcoin is going up due to scarcity and there only ever being 21 million bitcoin.

There are also risks storing your crypto on a cold wallet (you could lose your password, the ledger, or the ledger could get damaged) and there are risks storing your crypto on a hot wallet (the bank could fail and not pay you back).

While I consider the risks and opportunity costs, I personally feel your safest and wisest investment is to buy some Bitcoin every week (rain or shine), and store your Bitcoin in three or more interest-bearing accounts. Why multiple accounts? There is safety in spreading your coins out among banks. God forbid if one bank goes under, you at least have your crypto available in the other banks. Don’t forget, these crypto banks have some massive security protocols, “insurance” if you will, and it is in their best interest to treat you, the customer, very well.

I have vetted these companies below myself and I use them weekly. I am not a sponsor, but wish I was. I just like these companies and their customer service.

Earning interest on crypto has become my bread and butter investment strategy.

*I spread my crypto out among five specific crypto apps to help mitigate risks, get the maximum amount of FREE crypto, and also be able to move my crypto around easily when needed. *Whatever the highest interest rate is, I will take advantage of those offers with the proper amount of Bitcoin. *For example, it makes sense to put $10,000 of BTC in FTX to take advantage of their 8% interest rates…but it does not make sense to hold more than that on that specific app.

#1 Choice /// Voyager -Super Easy App to Use. Download the app and buy $100 of BTC to get $25 free Bitcoin. -Use code 1AE3C8 or this link to claim your BTC. Make 5.75%– 7.25% interest on your BTC depending on your VGX holdings.

#2 Choice /// Celsius -Automatically make 6.20% interest on your BTC up to .25 BTC. It’s 3.05% interest after that. -Join Celsius Network using this referral code 1866831288 when signing up and earn $50 in BTC with your first transfer of $400 or more!

#3 Choice /// FTX -Trade Bitcoin and other cryptos with zero fees on FTX. Use the referral code and get a free coin when you trade $10 worth. -Referral code 17352180 -Make 8% interest on your BTC up to $10,000 worth. It’s 5% interest after that.

#4 Choice /// Crypto(dot)com -Make up to 6.5% interest on your BTC (when you have the Jade Green Card) or 4% interest with the Ruby Steel Card. -Get $25 when you apply for Ruby or Jade Card. -Referral code: tqg3f3uvj8

#5 Choice /// Blockfi -Make 4.5% interest on up to .01 BTC. -Use this referral code and earn $10 worth of BTC after depositing $100 or more. -BlockFi is really best for their credit card that gives you 1.5% BTC back on all purchases. 👉 See video here about their credit card.


“Two Player Mode”

Once you have taken advantage of all of the free crypto out there, if you share finances with a spouse or significant other, you can enter “Two Player Mode.” I use my wife’s phone to sign up again for every promo and crypto app bonus I can think of. It feels like it’s raining crypto here at my house.

For example, use this referral for a $25 sign up bonus with Voyager. Then use your referral with your s.o. for a $25 bonus (and you get a $25 bonus for sharing the link). This is a total of $75 of sign up bonuses for just one app. How neat is that?



About the Author

Derek McCloud, M.Ed has a master’s degree in education which helps him simplify complex ideas like crypto and explain them in ways that the masses can understand. He is passionate about Bitcoin and crypto because it can provide financial freedom to those who invest wisely. He hopes that people who make massive amounts of money from crypto will help him have fresh water wells dug around the world for those in need by the year 2025. To learn more about crypto and joy, check out his youtube channel.


*Nothing in this document should be considered financial advice. Do your own research. Only invest what you can afford to lose.

*Using referral links in this blog will offer you incentives as it also helps this blog stay alive.