Dividends are one of the major sources of income for market investors. Both stocks and mutual funds pay dividends. But now, you can also receive dividends from your crypto investments. There are a number of popular cryptocurrencies that pay regular dividends to their holders.
In this article, we will discuss the top five reasons why investors should consider dividends when investing in cryptocurrencies.
1. Additional source of income
Dividend-paying assets can become an incredible source of additional income for professional investors. By purchasing and accumulating good dividend assets over time, you can generate a substantial income for yourself. Because these assets will keep paying you dividends for as long as you hold, this is one of the best side income sources for crypto investors.
2. Passive income
Another benefit of crypto dividends is that they are a passive income source, i.e. they do not require you to be actively involved in order to receive dividends. All you need to do is buy good dividend cryptocurrencies and then forget them, and you'll receive dividends automatically in your linked account as and when the dividends are distributed by the company.
3. Increase investor profits
Dividends are a great way for investors to increase their investing profits. While markets are unpredictable and may not always give you good returns, dividends are always your best friend and will keep earning you a stable passive income for as long as you hold them, irrespective of the market behaviour and conditions. Also, if you choose to reinvest dividends, the value and profits of your holdings will keep compounding with time.
4. Tax benefits
Income from dividends is generally taxed at rates lower than regular income from other sources including stocks and cryptocurrencies. This is one of the reasons why many investors choose to invest in dividend-paying assets so that they have to pay less tax on the income made from these assets.
5. Beat the inflation
One of the biggest and lesser-known benefits of dividends is that they help your money beat inflation. Thanks to dividends, the value of your holdings and, therefore, the buying capacity of your money will keep growing with time, irrespective of the market behaviour. This will help your money beat inflation.
For those who don't know, inflation refers to a decrease in the purchasing power of money with time. Typically, the buying power of a currency can decrease by 4–8% in a year, depending on the currency.
Example of a dividend-paying cryptocurrency
If you are looking for the perfect cryptocurrency that will also pay you dividends, check out the SEEK COIN.
SEEK COIN is a decentralised DeFi crypto coin that pays real-time dividends directly to the wallets of the holders for every transaction in the SEEK ECOSYSTEM.
In order to receive dividends from the SEEK COIN, all you have to do is buy the crypto and wait. For every transaction in the system, a portion of the transaction fee is distributed among the token holders in real-time. That's it. Keep buying SEEK COIN and keep receiving real-time dividends for as long as you hold.
Originally published at https://www.bloglovin.com on March 9, 2022.
Also, if you choose to reinvest dividends, the value and profits of your holdings will keep compounding with time.
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