Crypto Loans – Is It Possible To Make Money With It

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Crypto Loans – Is It Possible To Make Money With It?

The majority of us would have to work years and years to be able to buy a flat, house or car from our own pocket. However, our need to have our own place to live cannot wait. If we didn’t have a flat or house our quality of life will go down and all the years living without having this property will never be returned to us.

That’s why people reach for loans. Today, you can see loans on the portfolio of every bank – fiercely competing for their clients. Trying to keep up with the trend, the world of cryptocurrencies has recently begun to offer loans as well.

What is a “crypto-loan”?

Crypto-loan is a term that simply defines a loan in any cryptocurrency. The principle is the same as with a traditional loan. We agree with an entity, we take funds from it with the obligation to return them later with interests. The entity may then use the cryptocurrency for anything it wants – trading, purchase of goods or withdrawal from bitcoin ATM. The difference between a traditional loan and a crypto-loan is that cryptocurrencies bitcoin, ether is involved, not fiat money, such as USD, euro etc.

However, there are some more differences between traditional and crypto-leans, namely

  • The highest risk remains with the entity providing the loan, including risk related to frequent fluctuations of the cryptocurrency rate.
  • The process of taking or giving a loan is easier than traditionally. Just a few clicks and we can open an account on any service platform that supports such services
  • Most platforms offering such services in the world of Internet and blockchain technology have embedded software automatically collecting funds from people you borrow them and regulates the “technical” aspects of the loan.

As you can see, these are quite positive differences. Additionally, the one who borrows can enjoy all the benefits of using cryptocurrencies, such as decentralization, increased privacy and anonymity, and the integrity of the blockchain’s “ledger”. What about if you want to lend you Cryptocurrencies to someone else?

Is it possible to earn money thanks to crypto-loans?

In every corner of the crypto-world, there is a chance for profit. But we must never forget that it also involves a certain risk and that some promising projects may turn out to be fraud.

Nevertheless, it is possible to earn on crypto-loans. All that you have to do is to get in touch with someone who is seeking a loan. This can be done for instance via the BitBonds platform. You can try it out with Cryptocurrencies from USD 5 to join other people sharing a loan.

BitBond services

BitBond claims it’s able to offer a 12-26% return on a crypto-currency investment per year, which is quite a lot, especially when comparing with traditional investment instruments.

BitBond is one of the pioneers of this type of service. The company is registered in Germany and offers loans all over the world, also having the option of automating them. The creditworthiness of the clients valued by the company based on a machine algorithm that checks our payments on sites such as PayPal or Amazon. The portfolio includes several types of loans – namely for 6 weeks, 3 months, 6 months and one year. Installments are paid on a monthly basis.

The minimum loan value is set at 0.01 BTC. Each borrower can have up to one loan at a time. Interest rates are determined on the basis of creditworthiness. All prices (services) are displayed as VAT exclusive under German law.

Is crypto-loaning safe?

Certainly, you ask a question of whether the crypto-loans business is safe. What if the one to whom I send my money takes it and disappears? Frankly speaking, this was one of the priorities I checked first.

BitBond states on its website that in the case of delay with paying the installments the company contacts a debt-collection agency in the country of residence (stay) specified by the debtor. Therefore, I believe that the safety of the crypto-loaning business is the same as lending/borrowing of money in general such as with Zonky loan.

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Crypto loans and “margin funding” on Bitfinex

The crypto exchanges such as Bitfinex offer on their websites a service called “margin funding“, where we deposit money on a special account to be used by other exchange participants for their own trading (as long as they want to trade with leverage).

The „margin funding“ service is in general far less risky but brings a smaller profit. The services differ in the mechanism of operation but they have one thing in common – the possibility of automating our investment, thanks to which we put less effort into crypto-loaning.

Next, to Bitfinex, this type of loans is being offered by Poloniex under the name of “margin lending“.

To be allowed to use crypto-loans on Poloniex, you must register and have your identity confirmed – have your profile approved – by sending photos of your identity pass. After that, you must download a photo of your face to be used as evidence that the documents are yours.

To start the process all that you have to do is to transfer the given crypto to your “lending balance” as a normal deposit. Next, you do some small exercise to correctly set up the loans. But don’t worry. Soon we will give you a detailed guide with instructions for crypto-loans on Poloniex and Bitfinex.

Is margin funding safe?

In the official statement, Bitfinex claims that the chances of not returning borrowed capital is nearly zero and that it has never happened since the foundation of the exchange.

If the price would change so dramatically that the majority of all margin positions would drop below zero, losses eventually will be shared with margin funding providers. This has never happened in the existence of our platform, but in theory, it could happen.

Providing liquidity in margin funding is not risk-free; however, interest rates are typically far higher than you achievable at through a typical savings account. In the end, it’s up to the user to weigh this risk and gains. Source: BitFinex

Author

More about the author J. Pro

Unlike Stephen (the other author) I have been thinking mainly about online business lately. I wasn’t very successfull with dropshipping on Amazon and other ways of making money online, and I’d only earn a few hundreds of dollars in years. But then binary options caught my attention with it’s simplicity. Now I’m glad it did because it really is worth it. More posts by this author

How to Make Money with Cryptocurrency (With No Experience)

You’ve probably heard of cryptocurrency (or crypto, in short form), and are interested in learning how to make money with cryptocurrency. Crypto is one of the hottest investing topics right now and there are news articles all over talking about how people are becoming millionaires by investing in altcoins.

Table of Contents

You might have done some research but thought it looked too technical or complicated. We’re here to tell you that it’s not! Anyone can learn how to earn money with cryptocurrency and by the end of this article, you’ll be able to start yourself. We’ll also help you by categorizing the methods based on:

Read on as we walk you through it and cover several great ways of earning an income with cryptocurrency.

– 1 –В

Buy and hold

Buying and holding is the method you’re probably most familiar with when it comes to investing and making money with cryptocurrency: You purchase some sort of asset (like stocks), you let interest build up, and then you eventually cash out.

It’s the same idea in buying and holding with crypto, except you are waiting for the price of your chosen currency to go up so you can sell at a rate higher than when you bought.

This is one of the best and easiest ways to focus on how to make money in cryptocurrency.

For example Bitcoin was worth around $13 in 2020, and at the most peak price we’ve seen so far was nearly $20,000 in 2020. That means if you had just purchased $200 of Bitcoin in 2020, it would have been worth over $300,000 if you sold at the peak price! That’s a 1500x return on your money, nearly unheard of in such short of a time in the stock market. It really shows the power of making an income with cryptocurrency.

If you’d like to know how to make money with cryptocurrency by using buying and holding, we have some articles ready for you so you can get your coins and get started!

How to buy bitcoin

How to buy litecoin

How to buy ethereum

How to buy ripple

While there are MANY different coins out there, we recommend you stick to the 4 mentioned above. These are the safest and have been around for a while. If you invest in a new coin it might be cheap to buy lots of them, but there’s a very high chance the coin could just disappear. Coins that have been around a while don’t have that same risk.

If you’re ready to buy, we recommend that you visit Coinbase, which has been ranked as the most “beginner friendly” exchange. Click here to visit Coinbase and when you sign up, you will receive $10 in FREE Bitcoin on your first $100 order!

– 2 –В

Buy and hold for dividends

The strategy and currencies above will pay you when you eventually sell at a higher price than when you bought. However, some currencies will actually pay you just for holding them, which makes this a very lucrative method of making money You don’t actually purchase or own the cryptocurrency…you simply hold it and keep it in circulation. Some examples of these coins are:

– 3 –

Staking cryptocurrencies

This strategy combines the first two we mentioned: you buy a currency, hold it, plan to sell it for a profit at a later time, AND you also receive dividends from just holding it. This is a great secret in making money with cryptocurrency.

Some examples of these cryptocurrencies are:

В – 4 –В

Mining

When considering how to make money with cryptocurrency, mining is one of the methods that always comes up. Mining cryptocurrency is one of the best ways to make money with altcoins as it’s extremely passive: just invest in the equipment, set it up, and let it run.

But there’s the only possible issue…investing in the equipment. While you can mine cryptocurrency without extremely high end hardware, the better the hardware, the faster it can create more coins for you and the better your chance of actually making money. Mining works by having computers solve complex mathematical problems, and when they solve them, you are rewarded with cryptocurrency.

The thing is that as more cryptocurrency is created, the problems get harder and harder, and so if you don’t have a high end system, it can take a LONG time to solve things. You might also need cooling units, extra electricity upgrades, and more to support all this.

Also MANY different people are trying to solve the same problem at the same time. If your computer is too slow and someone else solves the problems first, you get nothing, so investing in a high end system is almost always needed.

CoinLoan is the first P2P lending platform for cryptoassets backed loans.

Borrowers get money without selling cryptoassets. Lenders offer loans and earn competitive returns. Overcollateralization ensures full repayment on time.

Bank Grade Security

Variety of Currencies

  • First of All

Deposit fiat funds or stablecoins if you want to lend. Deposit cryptoassets to secure a loan if you want to borrow.

Find the most suitable offer to issue a loan instantly or create a custom one.

Borrowers commit to paying interests on time. Otherwise, cryptocollateral ensures this.

Once the loan is paid off, the lender gets funds and earned interests. Сryptoassets return to the borrower.

Ready to Start Lending or Borrowing?

Slow and restricted traditional banking is outdated and doesn’t correspond to the modern globalized world. CoinLoan turns things around. Forget about any delays or hidden fees. Borrow, earn interests, exchange your fiat, crypto or stablecoins from any part of the globe — all in one place.

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  • General
  • Lenders
  • Borrowers

For lenders, CoinLoan is an opportunity to earn interest on their coins or fiat. There are two alternatives for making money: lending platform and interest account. With the lending platform, you can offer a loan on your terms. With the interest account that works as a bank deposit, you receive a fixed rate with no hassle. All the loans on the platform are secured by overcollateralization to ensure full and timely repayments.

Modesty aside, CoinLoan is the most advanced crypto lending platform. Here’s what do we mean by “advanced”:

Hacking attempts, bots, and DDoS attacks are filtered out meticulously thanks to Web Application Firewall and DDoS Protection.

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