How can one create passive income through one's bitcoin (profits)?

3132 sats \ 70 comments \ @Fabs 9 Feb Personal_Finance

Title.

I'd like to reduce the risk-on approach in the coming years, and start thinking about ways to generate a passive income.

Anyone here who has done the above, or is thinking in the same direction?

I don't wanna go too much into details about my holdings; therefore I'd simply like to ask what's needed to generate, for example, €800,00 per month in passive income- wether this is through ETF's or something else.

I won't be able to rent-out property.

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947 sats \ 9 replies \ @freetx 9 Feb

I think the risk / reward isn't going to be worth it.

I doubt you'll be able to earn more than 4-5% in a passive scenario. If price is going up 35% per year....why are you worrying about another 4% given that one scenario has 0 counter-party risk and the other is 100% risk.

230 sats \ 8 replies \ @Fabs OP 9 Feb

Because prices can also go down 70% over a period of two years.

30 sats \ 2 replies \ @freetx 9 Feb

then hold for 3 years.

33 sats \ 1 reply \ @Fabs OP 9 Feb

I'd reckon dude's like you get a mortgage on the house and go all-in on BTC because "it'll work out, just wait three years."

It could, or it could fuck you in the ass.

0 sats \ 0 replies \ @orange_crush 10 Feb freebie

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105 sats \ 4 replies \ @doofus 10 Feb

Learn about low-time preference behavior. Embrace stoicism.

545 sats \ 2 replies \ @elvismercury 10 Feb

I hate this take so bad.

Q: "Hey, I need stuff to live my life."

A: "Embrace low time-preference behavior!"

You know what else you could do? Move to a warm-weather climate and live under a bridge in a cardboard box. Try not to move around too much so as not to expend precious calories. Stoically experiment with just how much you can smell like piss before it compromises your ability to stack sats.

313 sats \ 0 replies \ @doofus 10 Feb

No need to be hyperbolic.

4 sats \ 0 replies \ @Fabs OP 10 Feb

💯💯💯

4 sats \ 0 replies \ @Fabs OP 10 Feb

Oh come on, ain't you the perfect pseudo-bitcoiner.

829 sats \ 7 replies \ @OT 9 Feb

I don't think you'll need to with bitcoin growing purchasing power over time.

I guess if you want to hedge some risk you could trade futures or options in case of some large downward swings.

There are DLC's that you could use over lightning. Or there's the "stable sats" thing with blink wallet.

0 sats \ 6 replies \ @Fabs OP 9 Feb

Nah, I don't want to sit-out bears again and again, only to hope for a "good" exit around the "top" next time... I want some stability.

ELI5 on stable sats?

0 sats \ 5 replies \ @OT 9 Feb

I haven't used it but as I understand it fluctuates around the USD. It does this through market makers going long and others short. Basically what happens is that if the price goes down you get more sats, and if the price goes up you get less.

0 sats \ 4 replies \ @Fabs OP 9 Feb

Pretty much a stable coin with a nuance of gambling, then?

10 sats \ 3 replies \ @joda 9 Feb

kinda the opposite of gambling; you are locking in an exchange rate. I guess you could consider that "betting against bitcoin". If BTC:USD goes up, you "lose", and vice-versa.

0 sats \ 2 replies \ @Longtermwizard 10 Feb

@super_testnet said something like that the other day with monero: Now that I think about it, it's possible to use monero right now without exposing yourself to its volatility. If you use an exchange where you can short monero on the xmr<->btc pair, just do a 1x short. As monero falls to lower and lower prices in satoshi terms, your bitcoin stash on that exchange will grow by an equivalent amount. Conversely, if monero grows in value in satoshi terms, your bitcoin stash will go down, but your monero stash will increase proportionally to equal out the difference. Whenever you want to cash out of monero you can sell your xmr tokens for bitcoins, putting you at the same amount of bitcoins you had when you started (minus some exchange fees). So if you want to buy and use -- say -- $300 of xmr, first put up a 1x short on monero using $300 of your bitcoin as collateral. As you spend it, reduce your collateral til you're all out of both monero and collateral, then if you want to you can put up collateral again to repeat the procedure. This does mean you have counterparty risk on the exchange as well as slippage risk due to trading fees and low liquidity on that trading pair. But for some people who want to treat monero like a sidechain, this is a way to do it that should work today. But the "peg" is secured by a centralized entity (the exchange), so there is that.

10 sats \ 1 reply \ @OT 10 Feb

That would not work in a bear market. Bitcoin and monero would both go down in USD value.

0 sats \ 0 replies \ @joda 10 Feb

Yep, likewise they go up together, often at different rates during "altcoin season".

There is no perfect hedge.

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741 sats \ 11 replies \ @kurszusz 9 Feb

Fact: 100% passive income does not exist (imo) To have 800 Euro monthly income: It depends on how much money do you want to invest for this "semi passive" income. I think you need around 80k initial capital (1% monthly income) to realize your target with minimum risk (because it easy to say...put 800 euro on "black" on the roulette, and double your money...but this is not investment, just gambling). If you thinking in digital are, you can try to run some nodes. But...you can try to create digital content on youtube / tik tok. It depends also in which country you live, becuse of specific laws about taxation, etc...

101 sats \ 4 replies \ @DiracDelta 11 Feb

Exactly. Believing in passive income is literally a mental illness. It may be milder than, say, believing in MMT or soviet communism, but it falls within the same category. Just like with a shitcoiner, I do not see value in "arguing" with these sort of people. If they want to be humble and seek to learn, I am happy to spare some time for them.

0 sats \ 3 replies \ @Fabs OP 11 Feb

Passive in the sense of not having to actively work for said yield / income.

You don't have to actively work on renting-out a property each day, there's work attached to it, but that can be done outside of a regular job, too.

You're one of the zealous nutcases it seems.

1 sat \ 2 replies \ @DiracDelta 11 Feb

Get a part time job then, bum, and call things what they are! Or buy stocks. You're a nutcase that loves buzzwords. You're just asking people "how do I make money in ways that have non linear upside rather than being proportional to the time I spend working on them?". That's not what passive means.

As someone who has a business that I have gotten to the stage of your definition of passive where I don't have to actively operate, I can tell you precise communication with whoever your point person is is the key thing that still matters.

0 sats \ 1 reply \ @Fabs OP 11 Feb

Nah dude, you don't.

Have fun in your little bubble, you're muted from now on, and down zapped as well.

1 sat \ 0 replies \ @DiracDelta 11 Feb

lalalalala, I'm not listening

To the extent "passive income" is a real thing, it is not available to arrogant imbeciles such as yourself as it requires a modicum of intelligence you obviously do not possess. There is a thing called bitcoin that you might want to learn about.

0 sats \ 5 replies \ @tomlaies 10 Feb

Fact: 100% passive income does not exist (imo)

Why not? There are plenty of families that have been relaxing for 3 generations due to owning companies, stocks, landlords

I think you need around 80k initial capital (1% monthly income)

Anyone with a minimum of serious investment experience will tell you that's nuts. A return of 12.7% annually is unsustainable in the long run.

961 sats \ 4 replies \ @kurszusz 10 Feb

To own companies => not a passive income, because you need to involve in company decisions, make the good decision depending on the market / demography / changing laws / etc conditions. So it is not a passive income at all. To own stocks => you also need to follow the market, the FED policy, the new technologies, whales, etc... => alsno not a 100% passive income. To be a landlord: you have a lot of CAPEX cost (liming, wall painting, changing installations, etc)...these costs are around 10-15% from your profit. Plus, you have the risk that the chartere mooves out, and until you find the next (for this you also pay for a real estate agent) you will have a loss of income.

In plus...all of these previous 3 needs a major investment ;)

About your affirmation "return of 12.7% annually is unsustainable in the long run" I think it is really sustainable. Not 100% passivelly, but it is sustainable long term.

BUT...as I said in my previous comment....these are just my personal opinions, based on my past experriences.

Hope you don't hate me, because I don't agree with you 100% :)

967 sats \ 0 replies \ @elvismercury 10 Feb

It's a good point, that what counts as "passive" income is pretty complex. How much is a person willing to do? My friend "passively" makes a nice income with rental properties, but kills himself with the maintenance, responding to issues, etc.

Even the most passive of the passive things are active someplace, even if it's regulatory capture or something weird and indirect.

EDIT: should have read further, @kr already made this point.

0 sats \ 2 replies \ @tomlaies 10 Feb

To own companies => not a passive income, because you need to involve in company decisions

Just own shares and relax. (Edit: i a bitcoin context this would even apply to EVERYBODY. Everything or all of the world GDP divided by 21 million.)

About your affirmation "return of 12.7% annually is unsustainable in the long run" I think it is really sustainable. Not 100% passivelly, but it is sustainable long term.

We can argue about the first point but you're unambiguously wrong on this one. The trinity study is one of the most fundamental works in the science of economics and talks about 4%. For economists even 4% is highly controversial. Your 12,7% are so far out of the question.

Hope you don't hate me, because I don't agree with you 100% :)

Nah. As I said, we can discuss what "passive" means. Fun little discussion. But I won't let the 1% monthly return slip. That's actually dangerous advice to people - especially if someone was to actually plan to retire on this math.

0 sats \ 1 reply \ @kurszusz 10 Feb

If you talk about the 4% yearly income, based on your investment as net profit, AND in NPV (Net Present Value)...maybe I can agree partially... But if you talk just simple as 4% income... => you're in loss, because of inflation (which is bigger than 4$)...I talk about the REAL inflation, not about the FED "math" ;)

I will tell you an example: here, in my city (it is almost the most expensive city in Romania) you can buy a block house of ~70 square meter for around 100k euro, and you can rent it for ~700 euro / month. This is also much more than 4% yearly income...but if we take in consideration the additional costs, a part of this income will evaporate (issues, government taxes, real estate agent, etc)...

0 sats \ 0 replies \ @tomlaies 11 Feb

The 4% from the trinity study are adjusted for inflation

630 sats \ 0 replies \ @realtrader 9 Feb

I believe there is more than one answer, regardless of right or wrong.

I particularly use the forex market, I make deposits in shitcoin and I withdraw the PROFITS immediately via BTC, unfortunately these pigs take a while to deposit, around 24/48 working hours. Anyway....

but you need to have experience and not be an addict thinking that you will buy and sell all the time and make a profit.

I recommend going to a 4H team and buying at tops and bottoms. (if you have no experience)

267 sats \ 4 replies \ @kristapsk 9 Feb

Ways to generate passive income without giving up your bitcoins, although you need to put some in a hot wallet then.

Build LN routing node and earn routing fees.
Run JoinMarket yield generator but, earn fees by providing liquidity for coinjoins.

65 sats \ 1 reply \ @ek 9 Feb

Build LN routing node and earn routing fees.

Also good way to generate negative passive income afaict

0 sats \ 0 replies \ @Fabs OP 9 Feb

Yeah... This.

0 sats \ 0 replies \ @TheWildHustle 9 Feb

S9 space heaters Robosats non kyc arb Stacker News Bitcoin company rewards Reduce your consumption

Havent had much success with JAM on start9 Lightning Terminal says my node is profitable, but i'm suspect......

I'd look out for gputopia and CASCDR Rigly looks interesting

Selling things via nostr marketplaces might become more of a thing Geyser offers a cool crowdsourcing platform for any project you'd feel like entertaining

0 sats \ 0 replies \ @Fabs OP 9 Feb

From what I've heard running a LN node isn't something you do for a profit, but for the sake of helping the network; it often comes with costs one has to pay upfront and isn't likely to get back through routing fees, correct me if I'm wrong.

Also, there's problems with channels being forced to close, I'd rather stay away from LN.

What's the deal with JoinMarket though, any dangers or opportunities I'd have to be wary of?

31 sats \ 0 replies \ @TheFish 10 Feb

Buy businesses that produce something. And run them so that they produce more things. Truly passive income is a scam.

10 sats \ 1 reply \ @spraveenitpro 10 Feb

BlockFI and Celsius enter the room..........

10 sats \ 0 replies \ @arrivederci 10 Feb

Exactly. Ppl fooled by the lure of 'passive income' are easy prey for fraudsters.

10 sats \ 6 replies \ @kr 9 Feb

What does “passive” mean to you?

323 sats \ 5 replies \ @Fabs OP 9 Feb

I set it up once and it pretty much yields enough that I can "scoop" approximately €800,00 per month off the initial amount.

1010 sats \ 4 replies \ @kr 9 Feb

if i were to guess, i’d say you need 50-100x the amount of money you’re trying to earn each year in “passive” income.

i don’t recommend trying, in fact i do recommend removing the word “passive” from your mind and pretending it doesn’t exist. far too many people go down the “passive” income rabbit hole only to realize there is no free lunch.

10 sats \ 3 replies \ @Fabs OP 9 Feb

Hmm, that's step 1, and on?

0 sats \ 2 replies \ @kr 9 Feb

Step 2 is spending time studying possible investments to learn the answer to the question “where does the $800/month come from?”

0 sats \ 1 reply \ @Fabs OP 9 Feb

Lemme guess: step 3 is executing step 1 & 2, right? Right?!!

0 sats \ 0 replies \ @kr 9 Feb

Step 3 is picking one of them.

0 sats \ 2 replies \ @DiracDelta 11 Feb

You can't, but thank you for your service in inevitably becoming poorer and learning to shed your arrogance so that your bitcoin can find their way into wiser hands.

1 sat \ 1 reply \ @Fabs OP 11 Feb

Yeah, fuck you too little know-it-all.

1 sat \ 0 replies \ @DiracDelta 11 Feb

lmao

0 sats \ 1 reply \ @muteness11 10 Feb

start a ponzi scheme... with more participants you will have your passive income ;)

on a serious note, such thing called passive does not exist ... its just a marketing jargon to make people believe its low risk and guaranteed income (for a safe mind) ....the reality, any investment is subject to price fluctuations, market dynamics, success or failure

0 sats \ 0 replies \ @Fabs OP 10 Feb

You know what would also be of help? If you'd simply donate every fucking Penny on your name to me.

On a serious note: I'm looking for something that yields the above amount akin to etf's and their "fire" movement.

0 sats \ 0 replies \ @designsats 10 Feb

No such thing exists imo.

0 sats \ 3 replies \ @PRA3S3NT1A 10 Feb

I have some idea that got in my mind but they might not work for everyone. What about owning Coca Cola shares ? Staking ETH ? Buy paring spots and give out for rent. Vending machine ? They might not be fully passive but thats what I could think about for now. Of course there is no better than Bitcoin but they might help to create cashflow.

0 sats \ 2 replies \ @Fabs OP 10 Feb

About the vending machine: My sister's Ex tried his luck with those, bought a fancy Pizza machine for around €80k Euro, but couldn't find a place to set it up.

He'll most likely sell it again with a loss.

0 sats \ 1 reply \ @PRA3S3NT1A 10 Feb

Ohh that's sad. Location is everything. Even if you do not have a fancy machine but you have the right spot, you can make a lot of money. By the way I am shock how expensive that machine is. I thought it is around 20k EUR.

0 sats \ 0 replies \ @Fabs OP 10 Feb

Depends on the features of the machine.

Well, he should've done things differently altogether anyways...

0 sats \ 0 replies \ @Ge 10 Feb

Just hodl n use as a bank account for your personal savings my step dad got lured into blocking thinking this and that 3-4% was enough for him to lose his coin after I told him repeatedly to pull his funds...not worth it he says now and gets it from hodling alone he's made more than "staking" it...

0 sats \ 1 reply \ @cryotosensei 10 Feb

I’m a painfully small fry, so I get my passive income sats from: -Satogram

Cointiply

I wrote about it here: #390212

Now working to spread my Bitrefill referral link far and wide so that I may get $5 BTC when my referee spends $50 haha

0 sats \ 0 replies \ @Fabs OP 10 Feb

Hah! I used cointiply too, a few years ago, though. There used to be this rewards app... Boltz or something like that (not the exchange) where you could earn like 0.015 eth for completing some steps in a game. I've managed to circumvent the limit and do it over and over again... Worked way up to one eth and lost it to gambling 🤣

Money goes fast when one doesn't have to work for it the hard way.

These sites can work, but I think SN is the new standard in that regard.

0 sats \ 1 reply \ @Coinosphere 10 Feb

What a fiat mindset.

Bitcoin goes up 5x that most years and you still want to risk your sats on a gamble to make those pennies.

The words "passive income" wouldn't need to exist if our money was scarce.

1 sat \ 0 replies \ @Fabs OP 10 Feb

Yeah, y'all can stop using these catchy terms; I'm in it for seven years now, I also know a thing or two, and I have also made my mind up.

The thing is: our money isn't scarce, and most likely won't be for another decade or two- and that's being optimistic.

I ain't gonna hold that long, that's pretty much a made decision, might be the wrong move, but I got other things to worry about in the future than Bitcoin, and a steady paycheck without too much effort would be welcomed there.

0 sats \ 0 replies \ @mallardshead 10 Feb

I feel bitcoin isn't ready for that, not without significant risk and trust. It will be though. It's in a growth phase, and beyond that is rent-seeking, or risk, littered with dead bodies. Build a bitcoin business or HODL. jmho

0 sats \ 0 replies \ @0348090484 10 Feb

Go learn some skill, earn in bitcoin. Then when affordable use bitcoin to take out loans to create own enterprise.

0 sats \ 0 replies \ @arrivederci 10 Feb

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0 sats \ 0 replies \ @OriginalSize 10 Feb

Have €1M of Bitcoin and sell 1/12% per month. Think about who came up with this term "passive income" and what were they selling? They could've just called it free money but they didn't. Why not?

0 sats \ 0 replies \ @saunter 9 Feb

You can try https://atomic.finance/

There's risk involved though, but it doesn't seem to be scam or anything. Built on DLCs.

0 sats \ 0 replies \ @Ice9 9 Feb

Maybe we eventually get to the point where you can lend your Bitcoin to a nation state like El Salvador. Perhaps get a good interest payment and be confident you won't get rugged. At this point, if you're super concerned about getting yield and stability....I guess stick with dollars/euros and money market/Tbills? Maybe eventually there will come a time there's reliable/safe yield and stability in Bitcoin. Then you can come back and compare how much you would have had if you just held Bitcoin without needing it to work for you. 😬😝

0 sats \ 0 replies \ @03de75cc7b 10 Feb freebie

Have a look at "Thorchain". It is basically a decentralized exchange with no KYC and minimal trading fees. You can use it to sell the top and wait it out in Tether or stake some BTC to get parts of the trading fees (around 2%-4% annually) without any shitcoin exposure. https://thorchain.net/thorfi/savers

0 sats \ 1 reply \ @anon 10 Feb

yield farm you dirty shitcoiner

1 sat \ 0 replies \ @Fabs OP 10 Feb

Don't call me that, fuck off.