Tag: loans

Posted on and Updated on by 100cryptoblock

Borrow Against Your Crypto: The Benefits and Risks

Cryptocurrency has been gaining popularity in recent years as an investment option, with many people holding onto their digital assets as a long-term investment. But what if you need cash for something unexpected or to fund a new project? Selling your crypto may not be the best option, as it could result in significant losses if the market crashes. Fortunately, borrowing against your crypto is becoming an increasingly popular alternative. In this article, we’ll discuss the benefits and risks of borrowing against your crypto and provide some guidance on how to approach it safely.

How to Borrow Against Your Crypto

The first step in borrowing against your crypto is to find a lender. There are many different lenders available, including both centralized and decentralized options. Centralized lenders are typically traditional financial institutions that have added cryptocurrency loans to their offerings. Decentralized lenders, on the other hand, are blockchain-based platforms that allow individuals to lend and borrow funds directly with each other.

When it comes to choosing the right crypto to borrow against, there are a few factors to consider. Stability is key, as cryptocurrencies with high volatility may be too risky for lenders. Liquidity is also important, as more liquid assets are easier to sell in the event of default. Finally, loan-to-value ratios should be taken into account to determine how much collateral will be required to secure the loan.

Once you’ve found a lender and chosen the right crypto, you’ll need to apply for a loan. The loan application process will vary depending on the lender, but typically you’ll need to provide some personal identification and collateral details. The amount of collateral required will depend on the loan-to-value ratio and the lender’s risk tolerance.

Benefits of Borrowing Against Your Crypto

One of the biggest benefits of borrowing against your crypto is the ability to access cash without selling your assets. This can be particularly valuable if you believe that your crypto holdings will appreciate in value in the future. Borrowing against your crypto also typically comes with lower interest rates than other forms of lending, such as credit cards or personal loans. This can make it a cost-effective way to access cash.

Borrowing against your crypto can also be used for a variety of purposes, such as funding a new business, buying a home, or paying for education expenses. This flexibility can make it a valuable tool for investors looking to put their crypto to work.

Risks of Borrowing Against Your Crypto

While there are certainly benefits to borrowing against your crypto, there are also risks to consider. The biggest risk is the potential for liquidation and loss of collateral. If the value of your crypto drops significantly, you may be required to put up additional collateral or risk having your assets liquidated to pay off the loan. This can result in significant losses if you’ve borrowed more than you can afford to lose.

To mitigate these risks, it’s important to set appropriate collateral levels and understand the loan terms. It’s also important to choose a reputable lender that has a strong track record of fair lending practices.

Conclusion

Borrowing against your crypto can be a valuable tool for investors looking to access cash without selling their assets. However, it’s important to approach it with caution and understand the risks involved. By choosing the right lender, the right crypto, and setting appropriate collateral levels, investors can use borrowing against their crypto to fund a variety of projects and investments while protecting their assets.

Posted on and Updated on by 100cryptoblock

How does bitcoin help you make money?

The world is increasingly going digital. Banks are issuing cryptocurrency cards, governments are legalizing cryptocurrencies, and some are even making their official means of payment. In the world of cryptocurrencies, you can find all the same services that traditional banks offer – transferring funds, paying for goods, deposits, and loan usdt – for a long time. In essence, these services are similar but in practice have several differences. Let’s understand can bitcoin earn interest?

Taking credit from a bank is not only unprofitable, but it is also often not given. Especially investors and traders who cannot prove their wealth in the form of investment assets often face this problem. Conveniently, with cryptocurrencies, there is no need to make sacrifices and sell crypto to get fiat.

Another important advantage in this situation is the ability to regulate terms and payments on a schedule that is convenient for you. Banks don’t provide enough flexibility, with them, you can’t choose which payment to give monthly, whether you need interest or amortized type of loan, and which interest rate is most comfortable. Traveling or, say, repairs are expensive activities, but crypto investors have advantages here, too: having kept their investments, they will more than repay all their investments when the rate of cryptocurrency grows.

So, secured cryptocurrency loans offer the following advantages to borrowers:

  • The loan is processed online and very quickly, no need to sit in queues at the bank.
  • Almost 100% approval – the solvency of the client is confirmed not by checking credit history but by the presence of collateral of the right amount. The only thing – the collateral must be larger than the loan, often even double.
  • In most cases, the repayment schedule is free or even prolongation of the agreement subject to the accrual of additional interest. Lack of penalties for early repayment.
  • Prompt receipt of fiat money to your card, bank account, or e-wallet.
  • Saving on exchange operations. When selling cryptocurrency, up to 14% of funds can be spent on commissions. It is unwise to spend such an amount of money in case you are not going to exit the asset forever.
  • If the cryptocurrency rises during the loan period, the client is even at a profit when he returns his collateral.
  • The terms offered by platforms are becoming more and more flexible and loyal, thanks to growing competition.
  • There are platforms that accept not only Bitcoin as collateral but also other cryptocurrencies, as well as Stablecoins. In addition, many services issue loans in cryptocurrency, which in certain cases is also convenient.
  • It is necessary to pledge cryptocurrency, not an apartment or other property. It is, in any case, less risky.

It is always important for a trader to have the maximum possible turnover of funds. possible turnover of funds, which has a positive effect on their earnings. That is why traders often invest in ICO projects, mining, and new coins. Loans secured by cryptocurrency assets make these processes more profitable and secure.

Traditional loans vs. cryptocurrency loans

The main disadvantage of cryptocurrency loans compared to traditional loans is the high volatility. If a coin drops in value, you’ll have to pay more back. But, firstly, it often, on the contrary, plays into the client’s hands because the coin can grow. And secondly, in the crypto world, there are stablecoins whose price is attached to fiat currencies, such as the dollar. Therefore, the volatility factor can be mitigated.

The second disadvantage of cryptocurrency loans is cybercrime because crypto creditors are not subject to the same level of control as traditional banks. Therefore, if you lose money due to a security breach, you could lose everything. But even this risk can be mitigated by choosing an exchange with a good reputation. Otherwise, cryptocurrency loans prevail over traditional loans. In short, cryptocurrency loans provide instant access to funds at low-interest rates with no credit check.

Binance Savings

Binance Savings offers floating and fixed-rate savings deposits. In the first case, the deposit will be 7 days, and profits are calculated daily. In the second, you need to select an asset for fixed-rate investment and invest the deposit for a period of 7 to 60 days. Fixed-rate deposits bring less profit but are more reliable. If the price of a token or coin decreases at the end of the term, you risk earning less than you planned or even losing money.

Binance now offers 9 fixed-rate savings assets, including BTC at 7% APR and USDT at 4.24%. For some currencies, the term of savings can be chosen – from 7 to 60 days. With a floating rate of only 116 deposits with a yield of up to 5% per day.

To participate in Binance Savings, you need to fund your wallet and then on the savings deposits page to transfer funds into assets by clicking “transfer assets”. AAX Saving offers investments in two areas – Fixed and Flexible. Here you can also store assets at a fixed rate of 7 days, but the rate is higher – 20% per annum for the same BTC, ETH, USDT, and USDC.

The exchange has a large selection of USDT and USDC stablecoins and cryptocurrencies – Solana, XRP, Polkadot, and others. Accruals occur every minute. Deposits are deposited and withdrawn without loss of interest instantly – this is an advantage compared to “irrevocable” deposits of banks. To make savings on one of the assets, it is enough to transfer funds from the spot account to Saving. Interest begins to accrue on the savings account immediately.

For some assets, you can choose the storage period, and the exchange determines the amount of the minimum deposit. After the registration of the deposit, the accrual on it is made the next day at 00.00. For example, OKEx Earn offers savings deposits on more than 120 assets. The list also includes BTC, ETH, and USDT with an average annual rate of 0.9%, and tokens TRON, WAVES, Bittorent, etc., for which the rate is higher – from 1.4% per annum.

In addition to savings deposits, the cryptocurrency exchange offers asset storage in a P2P-loan format, staking with higher dividends – up to 45.5% and other terms. To find out the exact interest rate of the OKEx savings account system, you need to open the “savings” tab opposite the desired asset. For example, BTC can be stored at 0.89% per annum. However, this is an example of a single platform, other resources may be different.

Advantages of the loan service

Speed and flexibility: you can get a loan instantly, with flexible repayment terms from 7 to 180 days. Early repayment: you can repay the loan at any time before the due date without penalty. If you repay the loan amount, the crypto-exchange charges interest only for the actual number of hours you use it.

High loan-to-value ratio: cryptocurrencies have a high LTV compared to other platforms. With such services, you can borrow up to 100% of the value of your crypto assets. Low-interest rates: interest rates on cryptocurrencies are lower compared to other platforms – the hourly interest rate is from 0.0002%.

Ability to use wherever you need: borrowed funds can be used anywhere in the ecosystem, including making trades or using services such as spot trading, derivatives trading, and staking in Earn products.

How to use crypto-assets

Cryptoassets borrowed against a loan can be used however you want:

  • With funds from a cryptocurrency loan, you can reduce your risk in leveraged trading by increasing your available margin.
  • You can also use the loan to increase your deposits or get free tokens by streaming them to Launchpool projects.
  • The loan can even be taken out to lend to others through DeFi protocols to generate high returns with rates that can be as high as 100% on an annualized basis.

Crypto exchanges with Savings

While many of the big players in the crypto market offer savings products, you should be careful in selecting a platform to deposit on.

Take into account the current operating status of the crypto-exchange in the world and the news background. For example, Binance has recently been receiving warnings and operating bans from regulators in some countries. Recently, the Securities Commission of Malaysia (SC) accused the exchange of operating illegally in the country and also obliged to shut down the website and mobile application in the region. Earlier, the UK banned Binance from trading cryptocurrency in its country, and in the U.S., the exchange is under active inspection by the tax authorities.

Opening a savings account for the cryptocurrency exchange can be called a test of its strength. Coinbase also decided to launch Savings in 2021 with a yield of up to 4% and raised questions from regulators. Now the crypto-exchange is being audited.

Conclusion

CoinLoan offers customers strong protection and favorable terms. Licensed cryptocurrency exchanger with exchange functions supports bank cards and fiat currencies, cryptocurrency loans and deposits are available on the platform. It is CoinLoan that gives a clear answer can bitcoin earn interest?