12 Best Ways to Earn Passive Income from Crypto in 2025

If you hold crypto and don’t plan to sell anytime soon, there are ways to put it to work. From earning interest to using structured notes, there is now a growing range of passive income options.

The approaches in this guide vary in diffiulty. Some are simple, some are more involved. We’ll also cover how Ledn helps you earn securely with accounts designed for capital preservation and predictable returns.

At A Glance

Can you earn passive income with crypto?

Top 12 ways ways to earn passive income from crypto in 2025

Is passive crypto income taxable?

Know the risks

What is passive income?

It’s income that doesn’t depend on your daily involvement. In crypto, it typically means earning yield from interest, staking, or holding certain tokens.

Read more: Crypto vs. Stocks: Which is the Better Investment?

Can you earn passive income with crypto?

Yes! And more investors are doing so. They’re opting for steady returns over short-term speculation. Options range from interest-bearing accounts to DeFi strategies. Not all are equal in terms of risk or effort, but there’s something for most levels of experience.

Read more: How to Earn Interest on Crypto - The Definitive Guide

Top 12 ways ways to earn passive income from crypto in 2025

1. Crypto lending platforms

Earn interest by lending out your crypto through trusted custodial platforms.

Platforms like Ledn let you deposit Bitcoin or stablecoins and earn up to 11% APY. Unlike DeFi protocols, these platforms use overcollateralised loans and ring-fenced structures to reduce risk. When you deposit your assets, they’re lent to vetted institutional borrowers. You receive monthly interest payouts, and you can withdraw at any time. Ledn also offers independent reserve attestations, helping you verify the safety of your funds. Read more about Ledn’s Growth Accounts here.

How to get started: Sign up on ledn.io, complete KYC, deposit crypto into your account, and start earning.

Difficulty: ★☆☆☆☆ – Beginner-friendly

Read more: The Ultimate Guide to Crypto Lending

2. Crypto savings accounts

Put your crypto to work with stable, passive income. No lock-up required.

With Ledn’s Growth Accounts, you can earn interest on BTC, ETH, USDC, or USDT, with APYs of up to 11%. Interest compounds monthly and is paid out in-kind. There are no lock-in periods, and you can withdraw anytime. Your deposits are lent out securely using overcollateralised structures. Ledn also publishes monthly performance reports so you can track exactly how your funds are being used.

Current rates (April 2025):

BTC: Up to 3% APY

ETH: Up to 4% APY

USDC / USDT: Up to 11% APY

How to get started: Open a Ledn account, deposit crypto into your Transaction Account, then transfer to a Growth Account.

Difficulty: ★☆☆☆☆ – Very easy to set up and manage

Read more: The 8 Best Crypto Savings Accounts For 2025

3. Dual Cryptocurrency Notes (DCNs)

Earn high yields while expressing your short-term market view on Bitcoin.

With Ledn’s DCNs, you choose a strike price at which you’re willing to buy or sell BTC in the future. If the market hits your target, the trade executes. If it doesn’t, you keep your original asset and earn yield. For example, if you think BTC will stay above $60k, you can sell a DCN with a $55k strike, earning a strong yield while positioning yourself to potentially buy BTC at a discount. These are short-term, typically 1–4 weeks, and work best when you’re comfortable with the potential outcomes.

How to get started: After depositing crypto with Ledn, use the DCN interface to select a strike price, tenor, and settlement preference.

Difficulty: ★★☆☆☆ – Requires a basic understanding of price targets and outcomes

4. Long-term holding

Hold BTC or ETH through market cycles and let long-term value play out.

If you believe in crypto’s future, simply holding your assets can outperform short-term trading or yield chasing. You reduce complexity, avoid capital gains events, and keep your exposure intact. You can pair this with products like Ledn’s Bitcoin-backed loans to access liquidity without selling. Holding securely in a cold wallet also gives you maximum control over your assets.

How to get started: Buy BTC or ETH, store it in a secure wallet (preferably hardware), and avoid unnecessary trades.

Difficulty: ★☆☆☆☆ – Simple, but requires patience and discipline

5. Decentralised lending

Lend directly to other crypto users through DeFi protocols without giving up custody.

Using platforms like Aave or Compound, you can supply crypto to lending pools and earn variable interest, all controlled by smart contracts. You keep custody via your own wallet and can withdraw anytime, but need to monitor risks like smart contract bugs or protocol changes. It’s ideal if you want more control, understand DeFi, and are comfortable managing your own keys.

How to get started: Connect a wallet like MetaMask to a DeFi protocol, supply assets, and monitor returns.

Difficulty: ★★★☆☆ – Requires comfort with DeFi tools and wallets

6. Staking

Support blockchain networks and earn rewards by locking up your tokens.

Staking your ETH or other proof-of-stake tokens lets you earn 3–6% APY while helping secure the network. You can stake through exchanges, validators, or liquid staking platforms like Lido. Some platforms allow instant withdrawal; others impose unbonding periods. Be aware of risks like slashing or validator misbehaviour, and always choose a reputable staking provider.

How to get started: Choose a platform (e.g. Coinbase, Lido, Rocket Pool), follow their staking instructions, and monitor your rewards.

Difficulty: ★★☆☆☆ – Fairly easy via exchanges; more technical for solo staking

7. Crypto mining

Earn BTC by validating transactions, either on your own or via a hosted service.

If you have access to cheap electricity or want to use a hosting provider, mining can be a viable passive income stream. You run or rent ASIC hardware to earn block rewards. Services like Compass Mining let you mine without managing equipment. Profitability depends on BTC’s price, energy costs, and hardware efficiency, so it’s not entirely hands-off but can be automated.

How to get started: Buy ASIC hardware or rent a hosted mining plan. Track profitability using tools like WhatToMine.

Difficulty: ★★★★☆ – High upfront cost and technical setup required

8. Dividend-paying tokens

Hold tokens that distribute revenue or fees as passive income.

Some projects, like GMX or Lido, pay out rewards to token holders or stakers based on protocol activity. You might receive ETH, stablecoins, or native tokens depending on the model. It’s important to understand how the dividends are funded and whether the protocol’s usage supports long-term payouts. Returns can vary and are directly tied to performance.

How to get started: Buy dividend-paying tokens and either hold them or stake them in the relevant contract.

Difficulty: ★★☆☆☆ – Easy to participate, but requires research into sustainability

9. Yield farming

Actively manage your assets to chase the highest APYs across DeFi.

Yield farming means moving your assets between lending, staking, or liquidity pools to capture returns. You might provide liquidity to Uniswap, stake LP tokens on a yield aggregator like Yearn, or switch pools weekly to follow rates. While it can be lucrative, it’s complex and risky, requiring regular monitoring and a good grasp of impermanent loss, token inflation, and protocol risk.

How to get started: Use platforms like Yearn, Beefy, or directly provide liquidity to Uniswap, Curve, etc. Keep an eye on pool APYs and token prices.

Difficulty: ★★★★★ – Best for experienced DeFi users

Read more: Stablecoin Yield Farming: Is It Worth It?

10. Cashback crypto cards

Earn crypto rewards on everyday spending.

Crypto debit cards like those from Crypto.com, BitPay, or Coinbase offer cashback in Bitcoin or other tokens when you use them for regular purchases. Rewards typically range from 1% to 5%, depending on the card and staking level.

How to get started: Apply for a crypto card, link it to your wallet or exchange account, and start spending. Rewards are automatically credited in crypto.

Difficulty: ★☆☆☆☆ – As easy as using a normal debit card

11. Referral programmes

Get paid in crypto by referring others to platforms you already use.

Many platforms (Ledn included) offer referral bonuses when someone you invite signs up and deposits. You typically earn a small bonus in BTC or stablecoins, and it adds up over time.

How to get started: Log in to your preferred platform (e.g. Ledn, Binance, Nexo), copy your referral link, and share it with friends or online communities.

Difficulty: ★☆☆☆☆ – Zero technical skills required

12. Interest-bearing stablecoin wallets

Earn interest without price volatility by using stablecoins.

If you prefer to avoid the ups and downs of BTC or ETH, stablecoin wallets like Kraken, Coinbase, or Ledn let you earn up to 10–12% on USDC or USDT, backed by transparent lending models or on-chain lending.

How to get started: Buy USDC or USDT, deposit it into an interest-bearing wallet or account, and start earning.

Difficulty: ★☆☆☆☆ – Very beginner-friendly and low risk compared to other crypto assets

Is passive crypto income taxable?

In most jurisdictions, passive crypto income is considered taxable, though how it’s taxed depends on the activity and local regulations.

• Interest (from lending or savings accounts) is typically treated as income and taxed at your regular income tax rate.
• Staking rewards and yield farming returns are also considered income when received, and may trigger additional tax when you sell the rewards later.
• Dividends from tokens (like those earned from GMX or Lido) are usually taxed as income at the time they’re received.
• DCNs and cashback rewards may fall into a grey area depending on how they're structured, but they’re generally also treated as taxable income.
• Capital gains may apply separately when you eventually sell the crypto you earned.

We recommend tracking all earnings and valuations at the time you receive them, and to consult a tax advisor who understands crypto in your country. Some platforms, like Ledn, offer downloadable transaction histories to help with reporting.

Read more: How to Earn Interest on Bitcoin - Actionable Guide

Know the risks

Every passive income strategy in crypto comes with trade-offs. Here’s what to consider before committing your assets:

Platform risk

When using custodial platforms or exchanges, you're trusting a third party to safeguard your funds. If the company faces insolvency, mismanages funds, or is hacked, your assets could be at risk. Choose platforms with strong security records, transparent reporting, and third-party reserve attestations.

Insurance gaps

Unlike traditional banks, most crypto platforms don’t offer deposit insurance. Even if a provider claims to use robust security or collateralisation, there's no guarantee of recovery in extreme scenarios. Some services offer limited coverage through third-party insurers, but it rarely covers all user assets.

Rate changes

Yields in crypto are market-driven. That means APYs can change rapidly based on borrower demand, token supply, and macro trends. What’s 11% today could drop to 4% next quarter, especially for stablecoin products or during market slowdowns.

Regulatory changes

Regulations around crypto lending, staking, and yield products are evolving. Some services may become restricted in your region, or platforms could be forced to alter products, lower returns, or shut down entirely. It’s essential to stay informed and diversify across jurisdictions when possible.

Market volatility

Even if you're earning yield, the underlying asset could fall in value. For example, earning 10% on BTC isn’t helpful if BTC drops 40% over the same period. Always weigh your income potential against price exposure, especially with altcoins or high-volatility DeFi assets.

Getting started with Ledn

Ledn offers predictable returns with better protection than most alternatives. Its products are designed for transparency, capital preservation, and ease of use.

What makes Ledn different?

Ledn is one of the few crypto lenders to offer monthly, third-party attestations of reserves, maintain segregated client accounts, and focus exclusively on overcollateralised loans to institutional borrowers. That means your deposits are never lent to retail users, never rehypothecated, and are ring-fenced from corporate liabilities. Open a Growth Account here.

How to get started:

• Create a free Ledn account.
• Complete KYC (identity verification is required to comply with financial regulations)
• Deposit crypto (BTC, ETH, USDC, or USDT) into your Transaction Account
• Choose how to earn:
  
  • Transfer to a Growth Account to earn predictable monthly interest
  • Opt for a Dual Cryptocurrency Note (DCN) if you want higher yield based on your BTC outlook
  • Track your earnings in real time via your account dashboard
  • View platform-wide activity through Ledn’s audited, transparent Open Book Reports

Ledn’s Growth Accounts are ring-fenced from other business activity, meaning your assets are protected from the risks of lending operations or corporate exposure. All loans are backed by collateral worth more than the amount borrowed, and institutional borrowers are regularly monitored.

Final thoughts

In 2025, you have more options than ever to earn yield on your crypto, from simple savings accounts to structured products like DCNs and decentralised lending.

Whether you're a long-term holder looking for steady returns or a hands-on investor exploring DeFi strategies, the key is to match your approach to your risk tolerance and time commitment.

With platforms like Ledn, you get access to institutional-grade safeguards, transparent reporting, and products designed for capital preservation, not speculation.

Start earning with Ledn.

Sponsored by 21 Technologies Inc. and its affiliates (“Ledn”). All reviews and opinions expressed are based on my personal views. There are risks involved with buying, selling, or holding digital assets as explained in Ledn’s Risk Disclosure Statement, which can be accessed here.