How to Earn Interest on Bitcoin

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Contributor, Benzinga
May 22, 2022

Want to jump straight to how to earn interest on Bitcoin? Flynt Finance is a secure platform with one of the best Bitcoin staking pools out there, using Bitcoin covered calls to earn 20-80% APY!

With inflation rates climbing over 7% in 2022, investors are looking for ways to outpace inflation with their investments. Decades ago, investors turned to gold as a safe haven to store value in inflationary times. Now, however, more people are turning to Bitcoin to store value in a scarce asset that is accepted globally. While holding Bitcoin may be a good investment strategy alone, there are ways to grow your portfolio faster than simply holding digital assets. The easiest way is to earn interest on Bitcoin, which you can do on several investment platforms today.

Learn how you can start earning interest on Bitcoin now.

Disclosure: ²Sum of median estimated savings and rewards earned, per user in 2021 across multiple Coinbase programs (excluding sweepstakes). This amount includes fee waivers from Coinbase One (excluding the subscription cost), rewards from Coinbase Card, and staking rewards. ³Crypto rewards is an optional Coinbase offer. Upon purchase of USDC, you will be automatically opted in to rewards. If you’d like to opt out or learn more about rewards, you can click here. The rewards rate is subject to change and can vary by region. Customers will be able to see the latest applicable rates directly within their accounts

Step 1: Open a crypto account.

The most common way to earn interest on Bitcoin is through a savings account with a cryptocurrency lending platform. These platforms lend bitcoin to institutional and retail investors and make investors collateralize their loans with cryptocurrency in case they default. 

Some popular crypto accounts that let you earn interest on Bitcoin are Flynt Finance, Uphold and Flynt offers the highest APY pools by a wide margin. Its 5x leveraged Bitcoin covered call strategy earns an impressive 20-80% interest. It earns so much yield by selling short-term far out-of-the-money call options on Bitcoin to collection and compound the premium. This strategy is riskier than many other staking pools because it can lose money on the options if Bitcoin spikes too much before the expiration date. However, this is quite rare because of the nature of the options (short-term and far-out-of-the-money).

Flynt also has an Ethereum covered call strategy and an innovative USDC pool that uses the decentralized exchange GMX's liquidity pool called GLP. You can read more about Flynt Finance and the details of its strategies on its website.

Nexo currently has a promotion that gives new users free cryptocurrency for signing up. The promotion bonuses scale up with the amount one deposits, starting at a $10 bonus for users that deposit $100 and topping out at $100 in free crypto for users that deposit $1,000 or more on the platform.

Alternatively, you can use Bitcoin on Ethereum’s blockchain – Wrapped Bitcoin (WBTC). You can earn interest on Wrapped Bitcoin using many services on Ethereum’s blockchain, and you don’t even need to make an account to get started. Once you connect your Ethereum wallet to a decentralized platform like Compound or Aave, you can start earning interest on your Wrapped Bitcoin. 

For beginners, cryptocurrency lending platforms are the easiest way to earn interest on your crypto. All you need to do is sign up for an account, and once you’ve funded your account, you can start earning interest. Most of these accounts don’t have minimum lockup times, so you can pull out your Bitcoin at any time. A centralized exchange like Uphold makes it easy for beginners to start earning interest on their Bitcoin.

  • securely through Flynt Finance's website
    securely through Flynt Finance's website
    Best For:
    High Interest Staking
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  • securely through Nexo's website
    securely through Nexo's website
    Best For:
    long-term cryptocurrency investors
    Read Review
  • securely through Uphold Crypto's website
    securely through Uphold Crypto's website
    Best For:
    A Fast Trading Experience
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    Terms Apply. Cryptoassets are highly volatile. Your capital is at risk.

Step 2: Compare interest rates.

Depending on the platform you use, the interest rate you’ll receive in your Bitcoin savings account will vary. Most platforms let you earn between 3% to 8% annual interest rate on Bitcoin, but some platforms have tiered interest rates depending on how much Bitcoin you deposit. 

Most of these interest rates are floating rates, meaning they change with market supply and demand. Most interest rates don’t fluctuate all that much, but there can be fluctuations in rates from time to time. It’s a good idea to monitor the interest you’re earning to make sure you’re earning the highest interest rate possible.

Step 3: Add Bitcoin to your portfolio. 

Some cryptocurrency lending platforms let you directly buy cryptocurrency via wire transfer from your bank. To do this, you’ll need to add your bank account number and routing number to your account. Once you’ve added your banking information, you can buy bitcoin and start earning interest.

Other platforms, like only let you deposit cryptocurrencies on its platform. If you don’t already own bitcoin, you’ll need to make an account with a cryptocurrency exchange. 

Some easy to use exchanges that you can buy bitcoin with a bank account are eToro and Coinbase. These exchanges have mobile apps that make it easy to manage your crypto on-the-go.

If you choose to earn interest on Wrapped Bitcoin, you can buy WBTC on Coinbase and send it to your Ethereum wallet of choice. Good software wallets to use for Ethereum are Coinbase Wallet and Metamask, as they’re easy to use with decentralized applications. 

Once your WBTC is deposited into your Ethereum Wallet, all you need to do is connect your wallet to a program like Compound or Aave to start earning interest on your Wrapped Bitcoin.

Step 4: Earn interest.

Once you’ve deposited your funds into an interest bearing account, you should begin earning interest right away. Depending on the amount of bitcoin you deposit and the platform you use, the interest rate you receive from your savings account will vary. 

Since interest rates vary between 3% to around 10%, it’s a good idea to keep your funds in the savings account for the long term if you want to earn any significant amount of interest in bitcoin.

How Does Compound Interest Work for Bitcoin?

There are 2 main types of interest you can earn from a savings account: simple interest and compound interest. Simple interest only earns interest from your principal investment, while compound interest earns interest on your principal investment plus previously earned interest. Because of this, compound interest grows your account at a faster rate than simple interest.

Compound interest is added to your account at certain intervals specified by the savings account you invest with. The shorter the time interval is, the more you will earn from compound interest. This is because you’ll start earning extra interest on your previously earned interest as soon as it's deposited into your savings account. 

Some platforms offers compound interest that’s deposited into your account on a monthly basis. Other platforms offer even shorter intervals for compound interest; offers daily compound interest. 

While shorter time intervals will grow your portfolio faster, there is not a huge difference in earning potential between compound interest that’s deposited weekly and daily. Intervals for compound interest are much more important when the interval is quarterly or monthly, as the interest you earn in this time will be much more than the daily or weekly interest you earn.

Pros and Cons of Earning Interest in Bitcoin 

A major benefit of  earning interest in Bitcoin is the high interest rates you can receive. While most traditional savings accounts offer less than 1% annual interest, most bitcoin savings accounts offer interest rates at least 5 times that of traditional savings accounts. And interest is paid in Bitcoin, so if the value of bitcoin appreciates so will the interest you’ve earned.

The biggest risk of using Bitcoin as a means of earning interest is the volatility of the cryptocurrency’s price. While you can earn 6% interest on your bitcoin, if the price of bitcoin falls just 6% then the USD value of your account will be worth the same after a year of investing. If you believe Bitcoin’s price will rise in the long term, then an interest bearing bitcoin account may be a good investment for you.

Trading Bitcoin vs Earning Interest

As a Bitcoin investor, you’ll need whether you’re going to trade or HODL your bitcoin. Trading your bitcoin is another way to accumulate more cryptocurrency, but you risk losing your investment to the market. 

With the prices of cryptocurrencies continuing to be volatile, trading crypto is a high risk strategy. Instead many investors who believe in Bitcoin simply hold their crypto to speculate on its value. If you plan to hold your Bitcoin over the long term, earning interest is a great low risk way to increase your bitcoin position.

Frequently Asked Questions


Can I get free Bitcoin with a crypto interest account?


Yes you can stake your crypto for free Bitcoin on platforms like Nexo.


What’s the difference between Bitcoin and Wrapped Bitcoin?


Bitcoin and Wrapped Bitcoin hold the same value because they’re tied to the same asset. While Bitcoin is the original cryptocurrency on the Bitcoin blockchain, Wrapped Bitcoin (WBTC) is a token on Ethereum’s blockchain that is pegged to the price of Bitcoin. Wrapped Bitcoin can be used with smart contracts on Ethereum’s blockchain, allowing you to earn interest on WBTC without a centralized 3rd party to manage your funds.

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