Cryptocurrency Peer to peer (P2P) trading is on a steady rise as the demand for top crypto assets such as Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC) and Tether (USDt) surges. Unlike the legacy centralized day trading of crypto, whereby you need to keep looking at charts and finding patterns (a tiresome and very risky activity), P2P trading offers you a passive option to make money and earn without having to actively be on the market.
In this article, we highlight the intricacies of trading on one of the crypto P2P exchanges – OKEX; what you need to know before starting to passively earn money through P2P trading.
Understanding P2P trading
Peer-to-peer trading builds on the fundamental feature of cryptocurrencies – decentralization – allowing you to directly buy, sell and trade cryptocurrencies over a distributed network. P2P exchanges do away with third party influences giving you (the trader) enhanced privacy and security of your crypto assets.
However, it is important to note that while P2P platforms deal on a distributed network, not all platforms are decentralized.
Traders prefer P2P platforms over centralized exchanges as they offer a faster trading option, more payment and withdrawal options, and no KYC requirements hence providing more privacy.
In the next segment, we look at OKEx P2P crypto exchange and how you can make money passively off them.
How to earn money through P2P trading
Before we dive into the world of finances and how to passively earn on P2P exchanges, there are several key points you need to understand. These will help you trade safely, secure your crypto, and earn better through P2P exchanges.
Let’s get right into it.
What do you need to know?
- Security is key
The most important thing to look for in an exchange before starting to trade is the overall security of your assets. Crypto and Bitcoin P2P exchanges offering non-custodial services, which allows you to be in charge of your own wallet keys and coins, rank as the safest. For instance, OKEx P2P exchange, a market on one of the largest exchanges, offers non-custodial services as well as an escrow service to ensure prudence between traders.
- Hard work, relax later
This is the biggest factor in differentiating passive income earners on crypto P2P exchanges. You need to put in the effort so that you can start earning well through the methods listed below. Each method entails different levels of hard work, discipline, and patience for you to start passively earning income.
- The fee is everything.
Similar to security, different exchanges offer different fees on their crypto assets. It is important to look out for these fees to ensure you do not lose your earned income on exorbitant fees. However, there are zero transaction fees using the OKEx P2P.
How to passively earn crypto on P2P exchanges
Taking into account the rules above, we can now dive into how to passively earn cryptocurrency on P2P exchanges. We focus on the best P2P crypto exchanges on the market with Bitcoin as the selected trade currency of choice.
1. Buying and HODLing
The first and easiest step to earn Bitcoin passively is buying from the cheapest P2P exchanges and holding the crypto. Over the past few years, the price of crypto assets has surged, with early traders heavily profiting from the crypto bags they filled. Bitcoin, for example, has seen a 240% increase from its Jan 1 price to trade above $11,500 at the time of writing.
All that is needed in this step is patience and a secure wallet to store your coins.
>>Buy Bitcoin on OKEx P2P exchange here.
2. Buying and HODLing
Another method you can earn crypto is by directly starting your crypto-marketplace on a P2P exchange – becoming your own crypto exchange. OKEx P2P exchange, for instance, allows you to create buying and selling orders on the platform allowing you to set a low buying price and higher selling price for profit.
Here you need to create your OKEx P2P trading account, consider the best tradable cryptocurrencies at the moment and set your geographical location to start trading. Once done, you can set up multiple payment methods, advertise your rates and allow traders to buy and sell. Setting up a payment that is scarce in your area and amounts no one else is offering, gives a better chance to make a market.
>>Open buy and sell advertisements on OKEx P2P exchange here.
3. Arbitrage opportunities
Arbitrage in P2P exchanges is obtained when you buy a crypto asset at a lower price on one exchange and sell it higher on another exchange. This is the most common way to earn crypto passively across P2P exchanges. The two major methods to earn crypto through arbitrage opportunities are:
a. Across different exchanges
This entails buying crypto, in this instance Bitcoin, at a discounted price on one P2P exchange and selling it at a premium on another exchange. These kinds of opportunities arise due to volatility, liquidity difference across exchanges, payment options across exchanges, and geographical price differences. These kinds of arbitrage opportunities offer small margins (if you calculate the fees) and are taken up fast.
b. Across different coins
The second way to make arbitrage earnings is through the trading of different coins with large spreads between them. For example, if the spread between USDt and BTC prices is large enough on a multiple-coin P2P exchange, you can simply buy one token (USDt), exchange it with the other token (BTC) and sell off BTC for an arbitrage.
Remember!! Arbitrage opportunities close really fast and always check at the fees across different exchanges and cryptocurrencies.
Other ways to earn money through P2P exchanges
4. Lending Bitcoin
Another simple way to earn passive income through P2P exchanges is lending crypto (i.e. Bitcoin). This requires an exchange that allows you to borrow and lend BTC such as OKEx.
To earn, go create an account on OKEx P2P exchange and buy a sufficient amount of BTC from the traders using the multiple payment options available. Next, you can lend the BTC through the OKEx Loans feature allowing you to earn interest by lending out your crypto.
If you’d like a loan, stake tour BTC in the loan escrow and receive up to 65% of the value of your BTC in Tether (USDt) loans. If the value of BTC rises (more than the interest payable), you can return the loan and take back your BTC at a profit.
5. Referral programs
The final and second-most passive way of earning crypto on P2P exchanges is affiliate and referral programs. Exchanges offer commissions and passive income to you if you refer friends to their platform. Referral programs give you a chance to earn crypto every time a friend you refer trades on an exchange.
>>Join the OKEx referral program here for a chance to win $10 in crypto.
As seen above, making money off cryptocurrencies is not only for the traders who remain glued to the trading charts. P2P exchanges such as OKEx and LocalBitcoins gives you an opportunity to earn money through P2P trading without actively participating in the market.
Security of your funds, fees charged, and liquidity of exchanges are some of the important factors to consider before selecting how you would like to earn money through P2P trading.
- What is the best passive earning techniques using P2P crypto exchanges?
As mentioned above, you can earn money on crypto peer-to-peer exchanges through arbitrage opportunities, buying BTC and holding, creating your marketplace, referral and affiliate programs and lending crypto.
- Is Crypto P2P trading safe?
It depends. Crypto P2P trading is safe on accredited exchanges such as OKEx P2P which provide non-custodial services as well as an escrow to protect your trades.
- What are the best Bitcoin peer-to-peer exchanges?
There are a number of top Bitcoin peer-to-peer exchanges providing services globally including OKEX P2P exchange, LocalBitcoins, Paxful are among others. for the list visit here.
- Is earning through crypto legal in India?
Yes. Earning cryptocurrencies such as Bitcoin and Ethereum is legal in India after the Supreme Court of India lifted the ban on crypto across the country.