Unleash The Potential of Bitcoin Backed Loans in Today’s Bear Market

The father of cryptocurrencies – Bitcoin has indisputably become a frequent point of discussion among traders, investors, entrepreneurs and startups. Amongst all the cryptocurrencies, Bitcoin has the highest market cap value of $112. After Bitcoin faced so many headwinds, it is now the ‘Internet of Money’ and continuously directing itself towards the succession and the next wave of Blockchain revolution.

Bitcoin backed loans

As of now, retailers are witnessed accepting Bitcoin as a ‘Point-of-Purchase’, so crypto hodlers and investors have turned their attention towards lending using Bitcoin as collateral. Bitcoin being a growth driver is gradually stepping into the lending industry, replacing the time-consuming processes and high interest rates of the traditional banking system.

How do Bitcoin Backed Loans Work?

Borrower comes to the P2P lending platform, pledges Bitcoin with the lender and gets the cryptocurrency in the form of USDC or whichever the case may be as a loan. The interest is determined by the platform itself and the borrower apply for the loan that matches the terms of the lender. Some platforms even allow lenders to state as against how much Bitcoin they are willing to lend and at which interest rate. Borrowers can then apply for the loan and lenders can choose whether to grant the loan or not.

Why A Bitcoin-Backed Loan Is A Next Frontier?

There are two reasons why Bitcoin-backed loans are about to become the next gigantic thing with investors in the digital currency and if you have no intention of investing in Bitcoin, you need to pay attention as the financial infrastructure to support crypto-lending gets built. Let’s have a look at the two major reasons why Bitcoin backed loans has become a big thing of the future:

1. Bitcoin Lending Does Not Require A Bank Account

In the developed country, loans and credit are the lifeblood of the economy. An initiative like Project Loon has set its own standard, which exhibits global internet penetration is rising at a much higher rate than bank account penetration. In Africa, internet penetration has risen by 7,000% in the last 15 years while Asia experienced growth rates of 1,467% in the same period. Bitcoin has another benefit of requiring only an Internet connection to work. Thus, Bitcoin offers an excellent chance to make the modern economic system more inclusive.

2. Bitcoin Owners Need a Tax-Friendly Exit Strategy

A loan is not a taxable event and if you use Bitcoin as collateral for a dollar-based loan, you can spend the money without paying any taxes on the gain in value in your Bitcoin holdings. You can pay back the dollar-based loan but you can sell Bitcoin later on when the loan comes due and defer any taxes until that later sale. Otherwise, you can extend the loan if your lender agrees as long as the value of the Bitcoin collateral remains completely enough to secure the loan. A wish to avoid paying high taxes will drive huge demand for Bitcoin backed loans.

To Sum Up

Of late, peer-to-peer lending has established itself as a credible competitor to traditional loan and investment opportunities. It gives an access to an asset class with an exciting risk and return profile; net returns are ranging between 4%-8% per year which is far more superior to other interest-bearing investments. Therefore, now when the peer to peer lending industry has become mainstream, it has turned out to be an ‘engine of growth’ for the blockchain technology.

How the Best Peer to Peer Lending Platform Helps to Enhance Your Business

Crypto Loans - An Amazing Idea to Boost Your Business

A network of lenders on the platform is providing collateralize loans secured against cryptocurrency so people can access their crypto wealth without selling them.

Funding a business is no longer a daunting task with peer to peer lending platform serving its purpose well. Whether you need to fund business expansion or to pay your employees, indeed the hunt for extra income can be quite difficult for SMEs and small businesses. Traditional bank lenders drag businesses into costly and strict agreements that limit businesses from reaching its full potential. For businesses that have cryptocurrencies, they should visit the best peer to peer lending platform like DIY Rates offering a smart way to access USD Stable coins.

Crypto backed loans provide a great avenue to increase the growth of crypto economy, opening new doors to the financial sector under the purview of blockchain technology. The way blockchain is disrupting the banking domain, it won’t be wrong if we say that blockchain is slowly and steadily ushering into the era of new financial economy.

Best Peer to Peer Lending 

How Does Peer to Peer Lending Work?

Anyone can apply for a crypto-backed loan. To understand it completely, let’s delve into a simplified example.

In order to be eligible for availing a loan against cryptocurrency, you need to register with a digital lending platform. These lending platforms work similarly as a crypto exchange, the only difference is that they offer lending solutions to borrowers, creating an interface between cryptocurrency and cash.

Once you have registered on your lending platform, you will be able to apply for a loan from a network of lenders, putting up cryptocurrency such as Bitcoin and Ethereum- as your collateral. When the loan is serviced, you will get the collateral back.

Basic Steps to Apply for a Crypto Loan

• Choose the right peer to peer lending platform
• Create a user profile, which is likely to include KYC
• Requesting of loan
• Finalizing the loan amount, and duration of payback
• Getting a perfect match to a lender

Lending Cryptocurrencies as an Investment Idea

If you own any token or coin, cryptocurrency lending is a simple way to earn profits for your business portfolio while being diversified. This process is extremely helpful when you do not have extra time on your hands to deal with nuances or if you are planning to sell your digital money in the short-term.

So, if you are looking to make passive income, consider cryptocurrency lending as a great alternative that only requires a few easy steps.

What is the usage of crypto-backed loans?

These loans are very cost-effective and efficient ways of managing cryptocurrencies while earning profits out of it. Simultaneously, user pledges the crypto with the lender till the loan amount is due. Some of the uses can be:

• Paying off the travel expenses such as going on a vacation, business meeting, and more via crypto.
• Funding a business activity.
• Lower the risk of your portfolio by diversifying.
• Traditional lenders does not accept cryptocurrency as payment

Conclusion

Crypto-backed loans are an increasingly sought after service in the cryptocurrency and blockchain domain, as they are suitable for people who have acquired cryptocurrencies. So, if you also want to get instant money without losing your cryptocurrency, DIY Rates is a trusted and best peer to peer lending platform on the market with enormous benefits such as easy to get cash- easy to pay off, fast approval, lower interest rates, no credit check, and trustworthy. To know more about DIY Rates, reach us.