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The Business of Crypto Lending for the Crypto HODLer

Businesses are built around opportunity costs. Real entrepreneurs say that there is an opportunity cost for everything under the sun. The need to make more from the growing cryptocurrency industry has led to the creation of new services. Cryptocurrency lending platforms are one of the most robust emerging narratives in crypto.

Businesses are built around opportunity costs. Real entrepreneurs say that there is an opportunity cost for everything under the sun. The need to make more from the growing cryptocurrency industry has led to the creation of new services. Cryptocurrency lending platforms are one of the most robust emerging narratives in crypto.  

The purpose of these platforms is to assist crypto holders to leverage their digital assets without liquidating them. Before the emergence of these platforms, any digital assets holder had to sell their tokens to access capital.

Crypto lending suits Holders’

Crypto Holders are investors who purchase a digital asset and hold on it whether it rises or falls. These folks are highly invested and confident in the use case of cryptocurrencies. The term is a 2013 creation, an acronym for Hold on for Dear Life. The abbreviation is apt for the severely volatile up and down price movements of digital currencies. 

Most cryptocurrency holders purchase these assets for speculative purposes. The process known as Holding is synonymous with Bitcoin holders. Bitcoin Holders, for instance, believe that one-day one token will be worth $1 million. Most of them will, therefore, not part with their tokens until then.

Others digital assets investors are in it for quick cash.  They will buy and sell as the assets as their prices rise or fall for profit. This group of investors is profoundly affected by the market’s volatile nature, and they trade in the same way as day traders.

Holders usually turn to these lending platforms to enjoy earning a passive income. What you need to need is to deposit your digital assets with one of these startups and make interest over time. Your digital assets will gain exposure to the market’s upward price movements.  

Institutional investors are rather fond of this option. With it, they can hedge their positions and implement safe and new trading algorithms for profit.  Another great benefit of digital assets lending is that it does not ban crypto users with poor credit scores from accessing funds.

 If you have had a rough time accessing credit from traditional lenders, these platforms will be a breath of fresh air. This form of financing has in the past not had a tax bill, though the US IRS has been implementing crypto taxation laws. As it is, leveraging your digital assets to get fiat financing is still not taxable. It is, consequently, a very attractive form of funding. 

Types of cryptocurrency lending

Margin lending

This type of crypto lending will allow you to use your digital assets collateral. To enjoy margin lending, you first need to deposit or lend you assets to a lending exchange. You are then expected to mark your holdings as available for credit and assign an interest charge.  

The person who is going to borrow your digital assets will do so hoping that their prices will rise. They will request the capital from your lending exchange if your interest rate suits them. After they have traded with your cash, they will return it to the exchange plus the interest amount owed to you. 

How are the digital assets protected when lent out?

Cryptocurrencies are operable online and very volatile. This characteristic of high volatility is the part of the reason why they can make you huge profits in margin trading. Digital assets are also very prone to theft and loss. 

To protect you from losses from volatility, the exchange has certain safeguards. The borrowers, for instance, have put down a percentage of their crypto as collateral for your loan. If the trade dips, a margin call will be rung and the borrower will return your funds plus interest. Some of the most common lending platforms online for margin lending include Coincheck, Bitfinex, and Poloniex.

Peer to peer crypto lending

Also known as P2P lending, this form of crypto lending will allow you to borrow capital straight from investors. There are no institutions or intermediaries in between which makes it easier, faster, and more affordable to get a loan. 

The process works in an online borrower lender-matching marketplace, you can see by clicking here . These platforms will match you with a private investor who has money to lend. You, the borrower will need to repay the borrowed crypto, and the lending platform

 sets the interest charge. 

Your creditworthiness plus the cash transfers dictate the interest charge. It is also dictated by the payments done through the platform.

How automated P2P crypto lending works

  • An investor with crypto to lend needs to first open an account on the lending site.  The digital assets will then be deposited on the account
  • A borrower will log on to their account on the website and fill out a loan application 
  • The lending site will perform a credit check to ascertain the borrower’s creditworthiness. They will then assign an interest rate as per results.
  • The crypto lender will offer a loan to the borrower who is free to reject or accept it the offer
  • Perchance the borrower agrees with the offer, the lent crypto has to be returned bank with interest after the lending time has matured. If the borrower is late with payments, they will pay the penalty. 

Some of the most common P2P crypto lending platforms, include CircleBack and Upstart.

Advantages of crypto lending

This lending process is not reliant on the use of credit scores, unlike traditional financing. The digital assets are instead utilized as collateral for cash borrowing. All you need to do therefore is to post your Bitcoin, for instance as security for a loan.  

You will receive your funds and pack in monthly installments. Once you are done repaying the loan, you will get your Bitcoin back. If you default on the loan repayments, your cash lender will have the right to seize your digital assets placed as collateral.

Crypto lending protects the players in the market by over collateralizing borrowing. If you, for instance, need to borrow $5000, you might be expected to place $10,000 worth of your Bitcoin to access cash loans.

While excessive, it protects the lender from the extremely volatile cryptocurrency market. Over collateralizing, these credit facilities keep more players in the platforms, who would otherwise be put off by the sudden devaluing that could happen to crypto. 

Crypto lenders are also allowed to liquidate digital currencies held as collateral if the market dips. This mechanism is a failsafe to protect the lender if digital assets are suddenly devalued. If you have experienced substantial financial gains in the crypto market, crypto lending is one of the best ways to protect your capital gains from taxation. 

You should secure crypto-backed loans, which are untaxed. This borrowing is not considered as sale of digital assets, which is taxable by US law. With crypto lending, anyone with digital assets can earn some passive income on a lending platform. The interest earned by lending out crypto can be plowed back to purchase more of the assets.

Lending platforms will protect your assets by holding them in cold storage wallets. Some platforms also enable lending via smart contracts and blockchain technology to ensure trust. The loans are therefore secured and the records immutable.

Lending your cryptocurrencies is an easy way of making passive income. You do not have to man the assets while they are on the platform. All you have to do is sign up, lend, and wait for the interest payments. In contrast, day traders have to keep their eyes on their assets to cash in at the right time. 

The lender has minimum risks. The systems are automated to ensure that you receive the funds automatically.

The risks

  • The market is not highly regulated. If there any arising legal matters, you could find yourself in uncharted waters. With conventional banking and lending systems, there are well-governed laws.
  • Interest charges are set daily, so your profit is never assured. 
  • The platforms could also charge extremely high commission rates, which may encourage less borrowing.

The final word

There are many benefits to crypto lending when compared to traditional loans. This new type of credit line is accessible 24/7 with minimum counterparty risk. There is also real-time transparency into lending due to blockchain technology. The UI/UX on these lending sites is still niche and mostly attracts crypto fans.


Bitcoin Profit review 2020

Bitcoin is the first decentralized digital currency and as we know that Cryptocurrency has number of advantages as compared to flat money. It allow users to send coins from one person wallet to another via internet, with very low amount of fees. It can be traded all over the world on different exchanges and we know that Nowadays, bitcoin trading is on its peak, people are experimenting different techniques for such trading i.e. some ways are successful while others are scam. Automatic trading platforms like bitcoin profits have been developed to provide an ease in bitcoin trading.

What is Bitcoin Profit?

An automated trading website, developer (John Mayers) claim that they have implemented a strong software that works 0.01 seconds faster than any other trading bot available in the market. The application generate trade signals for users and automatically make transactions (buying and selling of bitcoin and Ethernet). The whole process of signal generation and brokers trading is fairly simple and free of any hidden charges. However, 1% of profit will be taken by developers as their dividend.

Remember, Bitcoin profit is legit and registered. There are some negative critics about this platform on the internet but they are fake. It is recommended to start trading with a minimum deposit of $250.

You can also read
What is Bitcoin Trading How You Can Trade like a Pro?

Why Bitcoin profit?

  • Accurate with success rate of 92%, maximize your profits with bitcoin profit
  • Available in app, feasibility for users
  • Simple interface and easy to use, highly responsive software as compared to its competitors
  • Accept debit and credit cards
  • Minimum deposit of $250, do start by using this conservative option
  • Fast registration and seamless withdrawal
  • 24/7 customer service is available
  • No hidden charges
  • On average user earn $1300 per day

How to start trade?

Step1: Create an account
All you have to do is to fill the short form available on the official website of bitcoin profit. For signup the required information include full name, email address, phone number and a strong password for your security. You will need to verify your account by following a link sent to you via the email address provided. Alternatively, you can receive a text on your phone with a code with which you can activate your account. After verification, you can go ahead and create a password for your account. The process will hardly take 5 minutes and you will be taken to the main dashboard.

Step2: Fund your Account
Now it’s time to deposit real money into your account to start trading. Bitcoin Profit trades with many pairs, including BTC/USD, ETH/USD, XRP/USD, LTC/USD and Crypto/Crypto as well. The cryptocurrencies available in the platform are Bitcoin, Ethereum, Ripple and Litecoin.
The payment options include MasterCard, MerchantPay, SafePay, Visa, GiroPay, and other Debit card options.

Step3: Demo or live Trading
To get familiarize with the bitcoin profit you use demo trading either before trading or after trading. The things are same as live trading procedures but you do not need any real money for demo trading.
Live trading option will be activated with live trade button. Different settings need to be done like to set the stop loss limit. This feature helps to protect you from unexpected downfalls.

Key features

Bitcoin profit claims to an average earning of $1300 per day. After live trading sessions, the earned profit will be credited to users account.

Verification system
This feature seems to work smoothly, they verify all the details and make sure that right person receive the money.  Bitcoin profit works for two objectives, (1) to protect our business from money launderers and other bad actors, and (2) to help you recover your account in case you lose the password.

Brokers will assists you in the withdrawal process, the request will be processed in 24 hours and amount will be credited to user account. 1% of profit will be taken by bitcoin profit software.

Customer support
Bitcoin profit hire professional customer support staff. The team will guide users 24/7, you can contact them via live chat or send an email.

Software hire only highly skilled brokers available in the market, they trade on behalf of users.

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Cardano [ADA]

Cardano Climbs Above 0.061727 Level, Up 3% – Cardano rose above the $0.061727 threshold on Sunday. Cardano was trading at 0.061727 by 02:14 (07:14 GMT) on the Index, up 3.46% on the day. It was the largest one-day percentage gain since February 5.

The move upwards pushed Cardano’s market cap up to $1.60054B, or 0.54% of the total cryptocurrency market cap. At its highest, Cardano’s market cap was $23.91700B.

Cardano had traded in a range of $0.060029 to $0.061959 in the previous twenty-four hours.

Over the past seven days, Cardano has seen a rise in value, as it gained 7.68%. The volume of Cardano traded in the twenty-four hours to time of writing was $127.15397M or 0.09% of the total volume of all cryptocurrencies. It has traded in a range of $0.0553 to $0.0627 in the past 7 days.

At its current price, Cardano is still down 95.43% from its all-time high of $1.35 set on January 4, 2018.

Elsewhere in cryptocurrency trading

Bitcoin was last at $10,102.8 on the Index, up 3.34% on the day.

Ethereum was trading at $228.60 on the Index, a gain of 3.61%.

Bitcoin’s market cap was last at $183.69694B or 62.45% of the total cryptocurrency market cap, while Ethereum’s market cap totaled $25.10960B or 8.54% of the total cryptocurrency market value.

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Russian Central Bank Head Says “No Obvious Need” to Issue a National Cryptocurrency

Speaking at the Finopolis forum of innovative financial technologies, Elvira Nabiullina, Russian economist and head of the Central Bank of the country said the regulator doesn’t see a need to issue a national cryptocurrency, reported Russian News Agency, Tass.

“As Russia’s Central Bank, we have been studying this topic and the need to issue a national cryptocurrency is not obvious for us,”

said Nabiullina addressing Deputy Governor of the People’s Bank of China Fan Yifei.

“Not only for technological reasons, but also because it is (difficult) to really estimate what advantages will the national digital currency give, for example, in comparison with existing electronic non-cash payments. There are many risks, and the advantages may not be obvious enough,”

she added.

Back in July, Nabiullina said that one day the institution could launch its own digital currency but the technology must ensure “reliability and continuity.” But at that time as well, she said that fiat currency settlement systems are improving and already have

“good dynamics.”

She has repeatedly pointed out in the past that the regulator does not support the legalization of cryptocurrencies as a legitimate payment facility.

Earlier the lower house of the Russian parliament, the State Duma adopted a bill on digital assets.

Meanwhile, Fan Yifei said China is exploring the possibility of creating a national cryptocurrency. He believes it is important to cooperate with other countries so that regulatory standards could be developed.

After five years of research, China is finally ready with its cryptocurrency which is expected to launch soon.

Fan YiFei didn’t specify the launch date but said first there is a need to conduct studies and also take into account other countries’ experience.

Source: bitcoinexchangeguide

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