We have been earning passive income with Bitfinex lending, or margin funding, since 2015 so we have a lot of experience to share.
In this article, we will transfer all our knowledge regarding passive income on Bitfinex platform to you so you can maximize your return.
If you are interested in margin trading and futures trading, we recommend our full Bitfinex review 2020.
First, we need to answer some short questions
What is Bitfinex Lending or Margin Funding?
Bitfinex lending or margin funding simply means that you are lending your funds to a trader that needs them trade crypto with leverage
For example, Alice lend 1 BTC to Bob via Bitfinex lending by:
- Alice make her 1 BTC available for margin funding at Bitfinex by writing down her predetermined conditions (lending rate and lending time)
- Bob has 1 BTC but he wants to take a position with 2x leverage and he must lend 1 BTC to full his position. Through the Bitfinex platform he founds that someone (Alice) is willing to lend her coin for a certain rate and a maximum lending time.
- Bob accepts Alice´s terms and the trade is complete.
- Bob can choose to cancel the lending before the maximum time has been reached.
What is passive income?
Passive income is earnings derived from an investment that doesn´t necessarily needs a lot of time commitment. It could be interest account, rental property, stock dividends and more. Many people are looking for passive income as an alternative or secondary income. Also, its a great way to put your money at work rather than have them at a 0% bank account.
Margin lending with Bitfinex is a great source of income. However, its important to diversify your passive income portfolio. With Crypto.com Exchange staking you can earn up to 20% APY. In addition, we have a $50 free referral code for you.
How to make passive income with Bitcoin Lending on Bitfinex?
Here we will provide a step-by-step guide on how to make passive income with Bitcoin Lending on Bitfinex.
- Sign up and create and account with Bitfinex
- Deposit Bitcoin or purchase Bitcoin at Bitfinex
- Go to Funding in the header menu. In the image below you see funding marked. Now you see all the available cryptocurrencies for lending in the left menu. Here, you can see Bitcoin marked with red and you see the current lending rate which is 9.73% per year. This screenshot was taken 2020-09-06
4. After this, you need to set you Bitfinex lending criteria for Bitcoin. In the screenshot below you see the funding form marked with red to the left. The market interest rate is auto-fill by Bitfinex and you can change it if you like. You must fill in max amount you want to lend and minimum days and maximum days.
5. Optional auto renew option we do really like. In the same print screen above, you can see the settings for auto-renew you Bitcoin lending on Bitfinex. You must set max amount, max days and rate here and Bitfinex will automatically try to lend your Bitcoin again once the first borrower did cancel the lending or the lending terms were running out of time.
6. Also, in the screenshot above you see that the complete order book is available to see. This is good to know so you know where to set your lending rate.
Bitfinex Lending VS Poloniex Lending
We have tried all different margin lending or margin funding features out in the market. We have used Bitfinex, Poloniex and Liquid. We think Bitfinex is superior the other ones in terms of usability, available coins for lending and the lending volume.
How much does Bitfinex charge for margin lending?
Bitfinex charges a 15% fee from you Bitfinex lending income. This is industry standard and Poloniex apply a similar fee for the same feature. However, Bitfinex lending is superior to Poloniex lending.
Conclusion - How to make passive income with Bitcoin Lending on Bitfinex?
Bitfinex lending is a perfect way for Bitcoin passive income. We only have positive experience with this feature. The only thing to remember is that the interest rates can vary throughout the year and that Bitfinex charges 15% of the lending income.