8.7 C
New York
Saturday, December 4, 2021

7 Ways To Earn Free Bitcoin and other Crypto in 2021

Credit cards offer sign-up bonuses, bank accounts earn interest, and there are tools that allow you to earn cash back when shopping online.

And now, many of these rewards can be earned in cryptocurrencies instead of credit card points or US dollars.

If you’re already adding cryptocurrencies to your investment portfolio, these options can add some coin to your initial investment, but you need to know exactly how they work before you participate. You also need to be prepared for the additional responsibilities that free cryptocurrency requires, especially as tax season approaches.

Some free cryptos, like credit card rewards, are only taxed on capital gains when you cash them in (just like other cryptos purchased with your own money), while others may be considered taxable income when you receive them, and you are responsible for reporting them to the IRS. Find out in advance about your own tax obligations.

1. compensation for purchases
Lolli, a browser extension for Google Chrome or Firefox, offers “bitcoin back” when you shop at its merchant partners. This is similar to browser extensions like Rakuten and Honey, which offer discounts or cash back when you shop online through their portals or extensions. Similar to these programs, Lolli rewards you for spending regular money on regular online shopping instead of encrypted purchases.

Lolli’s stores range from Nike to Sephora to Malaysia Airlines. Rewards range from 1% to 30% bitcoin back, depending on the retailer and product. Rewards go into your Lolli account and can then be transferred to your cryptocurrency wallet or exchange account. 2.

2. credit cards
A cryptocurrency credit card works just like any other rewards credit card, but instead of getting cash or points for every payment, you get cryptocurrency. While we love cash back rewards (and you can always buy crypto with your cash back earnings), these cards can help you replenish your crypto wallet seamlessly.

Gemini and other exchanges, along with financial technology companies like BlockFi and Upgrade, have announced plans for cryptocurrency rewards credit cards. The reward categories of these cards are similar to those of many traditional cash-back credit cards. For example, the BlockFi credit card will give back 1.5% in Bitcoins for every purchase made after earning a 3.5% return rate for the first 90 days of account opening.

In addition to the difference in redemption rates, each of these cards offers different redemption amounts: the Gemini card allows you to choose which cryptocurrency you want to redeem your rewards in, while BlockFi rewards you in Bitcoin and the other cards limit your rewards to only certain altcoins. are limited.

As with other credit cards, the rewards earned with these cards are only worthwhile if you avoid their high interest rates. If you use your card to earn cryptocurrency rewards, be sure to charge only what you can pay off in full on time each month without carrying a balance of debt.

3. look for registration bonuses and referral bonuses on exchanges.
Some cryptocurrency exchanges offer registration bonuses or referral bonuses for using their services. For example, Coinbase’s previous bonus offered $5 to new users who invested in the cryptocurrency, while the current exchange offers a $10 bonus to both you and your referrals if you open an account and trade $100 or more.

Be sure to pay attention to the terms and conditions of these bonuses. You may need to provide more personal information or take other actions in order to claim these rewards. Most of these offers are not lucrative enough to justify signing up for an entirely new exchange if you already have an account, but if you are a beginner, keep an eye out for other interested friends to see if the exchange you are considering offers a sign-up bonus or referral bonus. Keep your eyes peeled. 4.

4. coinbase 
The popular cryptocurrency exchange Coinbase offers incentives for using the platform’s Learning Center. To receive a free exchange, you need to watch a Coinbase video, answer a quiz, and then Coinbase will deposit a small amount of crypto into your wallet. The content usually focuses on a specific altcoin (such as GRT or BOND), and as a result, these are the coins you get for following the lessons.

Altcoins are generally not recommended for long-term investment, so once you have acquired these lesser-known coins, you can convert them to Bitcoin or Ethereum. However, remember to keep track of these transactions, as all crypto-to-crypto transactions are taxable. You will also need to track the price of all earnings earned through Coinbase Earn and report them as income on your federal tax return. If you earn more than $600 through this program, Coinbase will issue you a 1099-MISC form, which you can use to report your earnings.

In order to earn with Coinbase Earn, you must have a funded Coinbase account, live in an eligible country, and verify all personal information.

5. earn interest on bitcoins
Some cryptocurrency exchanges allow you to earn interest on the cryptocurrency you hold. For example, Gemini Earn is a program where you can lend your crypto to institutional borrowers and earn up to 7.4% APY; BlockFi has a similar service called BlockFi Interest Account, which earns up to 7.5% interest. Lending your own crypto to these institutions can add more risk on top of the risk of the built-in cryptocurrency, so read the terms and conditions carefully before signing up and don’t lend more than you can afford to lose.

You can also earn interest by gambling on some cryptocurrency exchanges such as Binance.US. Gambling means leaving cryptocurrency in your wallet to earn rewards and interest. By doing so, you help maintain the blockchain network. Usually, only certain coins can be gambled within an exchange, so you may need to buy riskier altcoins to earn rewards.

Interest earned on coins and profits from gambling are taxable and you are required to declare them as income. If you participate, you will need to track the cost basis of your earnings throughout the year and include it on your tax return.

6. airdrops
Of all the ways to earn free cryptocurrency, airdrops are probably the riskiest and not worth the profit for most investors. Developers do airdrops when they want to gain support for their new cryptocurrency. Simply put, developers try to gain adoption by handing out coins.

You can check online to see when an airdrop project will take place. Airdrop projects are often announced on company websites or by users of social media platforms and some cryptocurrency news sites. If you are eligible to participate, developers can send a specific amount of coins directly to your digital wallet address.

It is important to be wary of cryptocurrency startups. Fake airdrops and ICOs (Initial Coin Offerings) are common scams used by hackers. Many of the coins issued in airdrops, while genuine, do not add up to a store of value for investment. Experts recommend sticking to the most popular cryptocurrencies, Bitcoin and Ethereum, especially for beginners. If you follow that recommendation, then pass on airdrops.

Crypto earned through airdrops is also taxable, and according to the IRS, you are required to report it as such based on its fair market value on the date it is recorded in the distributed ledger (in most cases, when you receive the airdrop in your digital wallet).


Related Articles



Please enter your comment!
Please enter your name here

Stay Connected

- Advertisement -spot_img

Latest Articles

%d bloggers like this: