The crisis in the banking industry currently making headlines has so far led to the collapse of three US crypto-friendly banks: Silvergate, Signature and Silicon Valley Bank (SVB). The contagion appears to be spreading to Europe as well, given recent concerns about Credit Suisse. As a result, crypto owners are looking for a safer place to store their digital assets, and the most stable and profitable option so far is an interest-bearing wallet.
Interest-bearing wallets offer you the opportunity to keep your funds safe while earning passive profit from your savings. They offer a consistent return regardless of which direction the market is moving. Even if prices suddenly collapse, you will receive the same interest rate for the duration of your savings contract.
How interest-bearing wallets work
An interest-bearing wallet works much like a bank, using your funds to make investments and paying you interest in return. By locking your funds in a wallet savings account for a set period of time, you allow your cryptocurrencies to be used for specific purposes such as day trading, lending, or arbitrage trading, and you are financially rewarded for using your capital.
The process is similar to opening a bank account: you open a savings account and deposit money, after which you earn passive profits. The amount of your winnings depends on the chosen wallet and is calculated based on the savings plan, the duration of the block and the amount of your deposit.
The advantages
Wallet savings plans offer numerous benefits. An important factor, especially in the current economic climate, is that having an interest-generating wallet protects you against inflation and protects you from stock market crashes. They also generate passive profits, so you don’t have to constantly manage your funds and keep an eye on the highly volatile crypto markets 24/7 in order not to miss lucrative opportunities. A wallet savings plan ensures you can focus on other things while your capital generates a return that can be significantly better than banks.
Make the right decisions
In many ways, the crypto industry carries more risk than other forms of investment due to under-regulation, exceptionally high market volatility, and the anonymity that allows criminals to thrive in the crypto space.
The security of the wallet you choose depends on its regulatory status, experience, risk management protocols, investment strategies, best practices and other security policies implemented by your chosen wallet.
While a decentralized wallet gives you more control over your funds, the advantage of a centralized wallet acting as a custodian for your funds is that they are subject to some regulation. Your choice depends on your personal requirements.
Other factors to consider are the savings plans offered as well as the currencies supported. So you should think about which ones best suit your needs. Is there a wide range of supported cryptocurrencies and are FIAT currencies also supported?
Similar to a bank savings plan, a short-term wallet savings plan, where your funds are only locked up for a short time, will offer a lower rate of interest than a long-term plan, where your funds are unavailable for years, not months. So you should be realistic about your financial flexibility and overall liquidity. Otherwise, you can be financially penalized if you withdraw capital before the conclusion of the savings contract.
Let’s take for example ArbiSmart, one of the largest and best established wallets on the market. Since the beginning of 2019 EU licensed and registered wallet supports 30 different FIAT and cryptocurrencies, from BTC, ETH, APE and SHIB to EUR, USD and GBP. There are savings plans for everyone, with short-term contracts of just one or three months and long-term contracts of three or five years. Wallet owners can earn up to 147 percent per year, and interest is paid daily. The exact amount you will earn can be calculated prior to deposit, depending on the currency of your savings, the amount deposited, the length of the savings contract and your account status.
With a digital wallet you can survive the banking crisis with peace of mind. Earn profits with your Bitcoin and Euro by putting your money to work to benefit from the interest rates on offer.
Here it goes to Wallet opening.
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