Perceptive customers are used to receiving free money through sign-up bonuses on credit cards, interest on bank accounts, and even cash back on internet purchases.
These same benefits, which were previously only available with credit card points and US dollars, are now available to you in cryptocurrency.
If you’ve already invested in cryptocurrencies, these alternatives can provide you with some more cash on top of the original investment. However, you need to understand how they function before deciding to participate. As tax season approaches, you should be ready for the additional duties that free crypto may entail.
When you use your bitcoin credit card rewards, you only pay taxes on your capital gains. Even so, certain free crypto, such as those you’ve bought with your own money, maybe considered taxable income, and you’ll need to declare it to the IRS. Do some research upfront to be sure you understand your tax obligations.
If you’re already invested in cryptocurrencies and don’t mind keeping an eye on them, here are several strategies to increase your holdings without spending any money.
1. Shopping rewards
Lolli, a browser plugin for Chrome or Firefox, pays you “Bitcoin Back” if you purchase from one of its retail partners. Like browser extensions like Rakuten or Honey, it offers discounts and rebates when you make online purchases through the portal/extension, respectively. Lolli, like previous programs, pays you for shopping online with conventional currency rather than purchasing bitcoin. Lolli compensates you for using traditional currency.
Nike, Sephora, & Malaysia Airlines are among the retailers on Lolli. Depending on the shop and goods, rewards range from 1 percent to 30 percent Bitcoin back. Your incentives will be deposited in your Lolli account, which you can subsequently transfer to a cryptocurrency wallet or exchange account.
2. Credit Card
For every swipe, you get bitcoin instead of cash back or points. With cashback benefits (which can be used to acquire crypto), this service can help you diversify your crypto holdings without any hassle.
Exchanges like Gemini and Coinbase and fintech firms like BlockFi and Upgrade have offered cryptocurrency rewards credit cards. Many classic money-back credit cards have similar reward categories. Besides earning 3.5 %for the first 90 days, the BlockFi Card Offers 1.5 %Btc back on every purchase.
All of these cards have distinct redemption values in addition to varied reward rates. Only specific cryptocurrencies may be redeemed with the Gemini card, whereas BlockFi offers Bitcoin incentives.
3. Referral Bonuses
When you utilize a cryptocurrency exchange’s services, you may be eligible for sign-up or referral incentives. Before, new users who opened an account and traded at least $100 would get $5 in Coinbase sign-up bonuses to invest in crypto, and the exchange presently gives a $10 sign-up incentive to both you and the referrer.
Be sure to read the fine print on any incentive offers you get. To earn these incentives, you may have to give additional personal information or complete additional steps. Suppose users already have a profile with an exchange. In that case, most of these offers aren’t worth signing up for again, but if you’re starting, keep an eye on the exchanges you’re contemplating to see if they give any sign-up bonus and referral for other people who might be interested in using the exchange too.
4. Coinbase Earn
A well-known exchange for cryptocurrencies, Coinbase rewards users for visiting the Learn section of the platform. After completing Coinbase’s video and questions, you’ll be credited with a tiny amount of cryptocurrency in your wallet. Because the courses are usually centered on a single cryptocurrency (such as GRT or BOND), the coins you receive for completing them are that specific altcoin.
Alternative cryptocurrencies, such as Bitcoin Cash and Litecoin, aren’t suggested for long-term investment because of their speculative nature. Just make sure to keep track of your crypto-to-crypto trades because they are all taxed. It would help if you also used Coinbase Earn to keep track of the price worth of all your profits and submit them as taxable income on the federal tax return. If your gains exceed $600, Coinbase will provide you a Form 1099-MISC that you may use to track your income.
Before you can start earning using Coinbase Earn, you need to have a paid Coinbase profile, live in a country that accepts the service, and have confirmed all of your personal information.
5. Airdrop Campaigns
Airdrops are the riskiest way to gain free bitcoin, and we feel the reward is not worth the risk for most investors. Airdrops are used to promote a new coin. Simply put, they give out currencies to gain adoption.
You can find out about airdrop initiatives online; they’re generally advertised on the company’s website, social media platforms, and some cryptocurrency news sites. Amounts are sent directly to the digital wallet account if you qualify.
Be wary of new cryptocurrency initiatives. Hackers frequently utilize fake airdrops & ICOs (initial coin offerings). Even once they are authentic, many airdropped currencies are not good financial stores of value. Beginners should stick to the most popular cryptos, Bitcoin and Ethereum. If you take that approach, avoid airdrops.