How do crypto bots make passive income?

There are lots of ways to earn passive income from the crypto market. One of the best methods is to use a robot. This guide explains how crypto bots make passive income.
By:  &  James Knight
Updated: Aug 3, 2022

The best Bitcoin robots offer a great way to make passive income and earn money while you’re doing other things. Read on to find out how bots can help you to make passive income and whether you should use one.

Can a crypto bot make passive income?

Yes, crypto bots can make passive income. To get the best results you’ll need to configure your robot correctly and pay attention to it regularly. It is very unlikely that a bot will perform for a long period of time and generate passive income unless it is maintained. Many  cryptocurrency auto traders are sold as ‘set and forget’ software, although most of them require some adjustments to perform consistently. 

‘Passive income’ refers to money that is earned with very little day-to-day work on your behalf. A crypto bot is a piece of software that trades the market automatically, which can be a great way to earn passive income. You need to make sure to choose a profitable robot first, and you can either purchase a bot or make one yourself.

How to make passive income using a cryptocurrency bot

As previously mentioned, using a bot to earn passive income isn’t as easy as installing it and then walking away. There are a few rules you can follow to help ensure your robot generates passive income. Below are 5 steps to follow give you the best chance of success. 

  1. Find a profitable bot. You won’t be able to make passive income unless you use a profitable crypto bot. You can either develop your own, buy one, or find a free automated trading bot. You can search for trading robots online, or use the many independent reviews we have on Invezz to find one that’s profitable. 
  2. Initial set up. Before you start using a robot you need to make sure you have set it up correctly. If you buy a bot, it may already come preinstalled with the right functions and settings. It is still worthwhile checking settings to make sure they are working correctly and efficiently. 
  3. Risk management. During the process of setting up your automated trading software you will be able to set your risk parameters. If you want to make passive income using a bot it’s important to keep your risk at a level that is able to sustain volatile market conditions which are often experienced in cryptocurrency. 
  4. Regular maintenance. To make the most amount of money you will have to check up on your bot at regular intervals. It is risky to not pay attention to how your robot is performing. If your bot is not generating as much passive income as you’d like you may be able to change its settings, or adjust your risk parameters. 
  5. Use multiple bots. There are lots of types of crypto bots and making passive income can be easier if you use more than one. You could use a scalping robot to capitalise on short term price movements when markets are slow. You could combine it with a swing trading bot to earn money from trending markets. 

Should I use a crypto bot to make passive income?

There are lots of opportunities to earn passive income from crypto and robots are one of the top ways you can do it. It could be a good idea to add automated software to your investment or trading portfolio. If you’re an active day trader, a bot could save you lots of time and earn you money with very little work. 

If you’re an investor, using a bot could be an excellent way to supplement your income while focusing on the long term outlook of your investments. Crypto bots are one of the easiest ways to make passive income, compared to more complex strategies like farming or trading for yourself. 

It is important to remember that the unregulated nature of the cryptocurrency market has led to a large number of scams. There are lots of robots available and many of them are designed to benefit the creator and not the user. That’s why you should always make sure to research any robot you plan on using before making a purchase.

Our editors fact-check all content to ensure compliance with our strict editorial policy. The information in this article is supported by the following reliable sources.

Invezz is a place where people can find reliable, unbiased information about finance, trading, and investing – but we do not offer financial advice and users should always carry out their own research. The assets covered on this website, including stocks, cryptocurrencies, and commodities can be highly volatile and new investors often lose money. Success in the financial markets is not guaranteed, and users should never invest more than they can afford to lose. You should consider your own personal circumstances and take the time to explore all your options before making any investment. Read our risk disclaimer >

Prash Raval
Financial Writer
When not researching stocks or trading, Prash can be found either on the golf course, walking his dog or teaching his son how to kick a… read more.
James Knight
Editor of Education
James is a lead content editor for Invezz. He's an avid trader and golfer, who spends an inordinate amount of time watching Leicester City and the… read more.