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How To Get A Cryptocurrency Backed Loan
Cryptocurrency has become more than a simple internet hobby with startups embracing this new technology to create businesses aimed at disrupting current practices. While blockchain and cryptocurrency have the means to be applied to many sectors, one, in particular, seems to be getting the most attention.
The fin-tech industry appears to be the market most blockchain projects aimed at improving with its revolutionary technology. One exciting application for BTC and cryptocurrency has been the dawn of Bitcoin loans.
What are these cryptocurrency loans?
Cryptocurrency loans are loans that one can take against their Coin holdings. These loans could be done using BTC or a mixed bag of cryptocurrency assets to back up the loan.
For simplicities sake, let's look at one currency Bitcoin and how a Bitcoin loan works. In BTC loans one needs to keep their BTC holdings as collateral for which they get the extra cash they need in USD or some other stable coin.
Loans are drawn using the deposited Bitcoin as collateral and are often referred to as Bitcoin loans. These lending programs allow borrowers to borrow cash for BTC and lenders can earn interest by lending their BTC. The company works as an intermediary and charges various fees for the facility.
Why would you want a cryptocurrency loan?
Cryptocurrency investors may be wanting to hold their position long term to acquire larger returns or they do not want to sell at a loss but need liquid capital for some reason. Instead of selling and taking on a loss and not having the asset, these crypto-backed loans provide the borrower with access to extra money without having to give up the advantage of HODLing their Bitcoins.
Once you've paid back the money you can get access to your cryptocurrency and continue to HODL or sell at a price you are now comfortable with and take your returns. Crypto-loans allow for more liquidity in the market and gives holders an option to extract instant access to fiat capital from their holdings
Where can I get a cryptocurrency loan?
If you're keen on using your cryptocurrency holdings to access the funding you can approach the following sites. Create an account and complete their various KYC requirements, send your cryptocurrency to an assigned wallet address and follow their loan process.
Visit - https://nexo.io
Visit - https://crypto.com/
3. Celcius Network
Visit - https://celsius.network/
Visit - https://ethlend.io/
Visit - https://nebeus.com/
Visit - https://blockfi.com/
Visit - https://www.youhodler.com/
8. Coin Loan
Visit - https://coinloan.io/
9. Salt Lending
Visit - https://saltlending.com/
Backed by Bitcoin
As cryptocurrency continues to make inroads into mainstream fin-tech and creating its own products we will continue to see improvements in this field. While I'm personally not comfortable handing over cryptocurrency to 3rd parties.
I do think this is still a proof of concept stage. As we move to a more decentralised approach where these loans can be handled on a Smart contract basis and remove the need for handing over your funds but locking it in a decentralised manner.
If you would like to know more about digital assets or would like to market your digital asset company then don’t be shy we’re happy to assist. Simply contact us
Are you looking to promote your business?
South African finance business owners can create your free business listing on nichemarket. The more information you provide about your business, the easier it will be for your customers to find you online. Registering with nichemarket is easy; all you will need to do is head over to our sign up form and follow the instructions.
If you require a more detailed guide on how to create your profile or your listing, then we highly recommend you check out the following articles.
If you enjoyed this post and have a little extra time to dive deeper down the rabbit hole, why not check out the following posts on cryptocurrency and blockchain.
- Why Blockchain and Cryptocurrency Is The Future Of Money
- 24 Ways To Earn Cryptocurrency
- How To Pay Tax On Cryptocurrency In South Africa
- How To Buy Bitcoin In South Africa
Disclaimer: This article should not be taken as, and is not intended to provide any investment advice and is for educational purposes only. As of the time posting the writers may or may not have holdings in some of the coins or tokens they cover. Please conduct your own thorough research before investing in any cryptocurrency as all investments contain risk.