How to Earn Interest on Dogecoin • Benzinga

Dogecoin is a meme cryptocurrency with a market capitalization of over $7 billion. It’s widely regarded as a joke, but investors are still putting real money into the cryptocurrency. 

Tesla CEO Elon Musk is a vocal supporter. Most investors see Musk’s tweets as jokes and not investment advice. 

Either way, Musk brings attention to Dogecoin and the entire cryptocurrency market. Learn how you can earn interest on Dogecoin now.

Step 1: Open a crypto account.

There are very few cryptocurrency exchanges that support interest bearing accounts for Dogecoin. 

If you want to earn interest in cryptocurrency, using a more widely used and less volatile asset like Bitcoin or Ethereum may be in your best interest. Some accounts that let you earn interest on major cryptocurrencies are Coinbase, BlockFi, Celsius and Binance. 

Unfortunately, the only major exchange that supports earning interest on Dogecoin is Binance. Investors can put their Dogecoin in an interest bearing account on Binance to earn a 5% annual interest rate on their crypto. 

To open a binance account, go to Binance.us and sign up with email and password. 

Step 2: Look at interest rates.

The only accredited platform for earning interest on Dogecoin is Binance. Binance currently offers a 5% annual interest rate on DOGE, but this is subject to change based on market demand and the supply of coins in investor savings accounts. 

Compared to other cryptocurrencies, Dogecoin offers a mediocre interest rate. Dogecoin is a highly volatile asset, much more so than Bitcoin and other large market capitalization cryptocurrencies. 

Platforms that allow you to earn interest on Bitcoin offer rates from 4% to 8%, and you don’t need to be exposed to Dogecoin. 

Another interest bearing option is to stake Ethereum on it’s Eth 2.0 network, which currently pays investors an interest rate of about 8% annually. 

Step 3: Add Dogecoin to your portfolio. 

To earn interest on Dogecoin, you’ll need to own the asset. This means you’ll be exposed to the high volatility of Dogecoin. 

Although you’ll be earning 5% interest on your holdings, this doesn’t mean that your portfolio will grow in USD value. 

If Dogecoin depreciates 10% (which its done several times in short time intervals), then your initial investment and interest will be worth less than 

Step 4: Earn interest.

You can monitor the interest rate you earn on your investment on the exchange you make an account with. For Doge, you can see the current interest rates on Binance’s website. 

These interest rates are floating rates, meaning they can change with market demand for the asset. It’s a good idea to monitor the interest rate you’re earning on a daily or weekly basis to make sure that you’re earning enough interest to make your investment worthwhile.

How Does Compound Interest Work for DOGE?

Binance savings accounts are compounded daily. Compounding interest is advantageous to investors because it let’s you earn interest off of your previously earned interest. 

For example, if you earn 10 DOGE a day, then at the end of each day Binance will credit 10 more DOGE to your savings account. These coins will earn interest for each day going forward. As your account grows, so will your interest payments.

Pros and Cons of Earning Interest in Dogecoin 

If you plan on holding your Dogecoin for the long term, then earning interest on Dogecoin is a good way to increase your cryptocurrency holdings. 

If the price of Dogecoin increases while it’s in your savings accounts, so will the interest you’ve earned and the interest you will earn in the future. This is because all the interest you earn from your savings account is paid directly in Dogecoin. 

If Dogecoin decreases while it’s in your account, then you will lose money on the interest you’ve earned and the interest you will earn. Dogecoin is currently trading at almost 6 cents per coin, appreciating over 1,000% in the past 12 months. 

If you invest in a DOGE savings account and the coin dips to 5 cents, then your initial deposit plus the interest earned over the span of a year will be less than your initial investment in USD value.

Earn Interest or Hold Dogecoin?

Instead of earning interest on Dogecoin, you could choose to simply hold it as an investment. Holding Dogecoin makes your investment more liquid, so you’ll be able to sell your asset quickly if Dogecoin’s price fluctuates dramatically. 

Many crypto exchanges support Dogecoin, but very few support interest bearing accounts on DOGE. Your crypto exchange options are expanded if you decide to hold Dogecoin as an investment. 

If you want to earn interest in cryptocurrency but don’t want to be exposed to a currency based on a meme, consider earning interest on bitcoin or Ethereum. 

And if you don’t want to be exposed to high risk assets like cryptocurrency, then you can earn interest on stablecoins. Stablecoins are cryptocurrencies that are pegged to certain assets, usually the U.S. dollar. Depending on the platform you use, you can earn anywhere from 3% to 13% annual interest on stablecoins. 

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