Bitcoin Lending Platforms In 2021
Outside of BlockFi, there a suite of other platforms that can be used to lend Bitcoin and earn a passive return.
- Binance *
*Indicates our suggested choices on this list. The important thing to keep in mind here is that all of these providers vary in their rates, security and risk. Its very important to ensure you do your homework prior to lending Bitcoin on any of the aforementioned platforms as there may be varying degrees of risk associated with trusting these platforms with your assets.
Turn Bitcoin Into Cash Using Coinbase
To make things a little easier for you, I will now show you how to cash out Bitcoin at Coinbase.
1. First, you will need to open an account with Coinbase, link your bank account, and make a deposit. If you need help on how to do this, view our guide here. If you have already done this, proceed to step 2!
2. Once you have set up your account, you will need to send your Bitcoin to your Coinbase Bitcoin address! To do this, click on the accounts tab, open your Bitcoin wallet, and click Receive. You will then be shown your Bitcoin Coinbase wallet address. This is the address you need to send your Bitcoin to.
3. Once you are all set up, click on Buy/Sell at the top of the page.
4. Next, click on Sell.
5. The next step on how to cash out Bitcoin is in the wallet. Assuming you have now sent your Bitcoin to your Coinbase wallet, you should see your Bitcoin wallet and your default fiat currency here. In the example image below, I opened an account from the EU, so my deposit wallet is in Euros .
This will change depending on where you are located. For example, U.S customers have the option to withdraw to USD, and Japanese users can withdraw to JPY.
You will also see your withdrawal limit. If you have already verified your account, your limits will be quite high. However, if you need to increase this, click on See Limits and follow the additional verification instructions!
7. Once you click on Sell Bitcoin Instantly, your funds will now be in your fiat currency wallet.
The Crypto Exchanges Customers Can Obtain Cash Via Their Paypal Or Bank Accounts
Cryptocurrency exchange Coinbase is now allowing customers to borrow as much as 40% of their bitcoin value up to $1 million with no credit checks, the company tweeted on Tuesday.
- The borrowing minimum and maximum amounts may vary by state, Coinbase added.
- The loans will be issued with an annual percentage rate of 8%, and borrowers wont be required to show credit checks, Coinbase said.
- Customers can obtain the cash using their PayPal or bank accounts. They will need to make minimum $10 monthly interest payments, and Coinbase is offering flexible repayment schedules.
- Coinbase said that it wont lend or otherwise use the collateralized bitcoin but instead continue to hold it.
- Earlier this year, Coinbase dropped plans for a crypto lending product after the U.S. Securities and Exchange Commission raised concerns. The lending product was supposed to power a crypto savings account that would earn customers a 4% annual percentage yield , a return thats multiples higher than most savings accounts at traditional banks.
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Bitcoin Loan Without Verification
An easy bitcoin loan is an excellent alternative to a traditional loan such as PersonalLoans.com because you do not have to have good credit to get a low interest loan. With an instant bitcoin loan you do not have to have a credit score , nor you need to prove your creditworthiness. With a bitcoin loan, you don’t prove your reputation, you build it. Bitcoin lenders have created internal reputation systems that are independent and you create your reputation within the community.
Getting a loan in bitcoin is not too difficult. Once you established your reputation in a platform, you are likely to be trusted by others and overtime you could even be lending bitcoin yourself. Some lenders offer a fast bitcoin loan. Some offer instant bitcoin loans, with other bitcoin loan sites offering bitcoin micro loans. There is no such thing as getting bitcoins without verification nor a free bitcoin loan. What exists are low cost loans. Bitcoin is so profitable that lenders can afford to offer low interest rates to borrowers.
How To Choose A Lending Site For Bitcoin
It is up to you to make the decision and pick the site that you wish to use for a loan to buy Bitcoin. Each one comes with its pros and cons. But the best way to really choose the top option is to determine the reasons to take a Bitcoin loan.
You can achieve this by simply asking yourself a few questions, including:
Read Also: How To Sell Cryptocurrency On Coinbase
Wanna Borrow Against Your Bitcoin Coinbase Says Ok
Bitcoin continues to blaze a trail in the crypto space.
And it just just took another step in its quest to become a respected asset class.
Plenty of folks remain unconvinced bitcoin is actual money. And some skeptics continue to call it a scam.
But based on the latest announcement by Coinbaseone of the largest regulated crypto exchanges in the worldits getting harder to doubt bitcoins status as a financial asset.
In short, it sure acts a lot like money. And it continues to expand into areas previously reserved for traditional financial assets.
Today, I explain why this move by Coinbase is a win-win for exchanges and investors.
A couple of weeks ago, Coinbase announced it would allow customers to borrow U.S. dollars using bitcoin as collateral. Customers who own bitcoin can borrow cash up to 30% of the value of the bitcoin holdings in their Coinbase account.
This is a valuable feature for any bitcoin owner who needs cash for any reason. Instead of having to sell their crypto holdings for U.S. dollars, they can simply borrow the cash they need. The loan is secured by their bitcoin, which acts as collateral.
Collateralized loans arent anything new. As most readers probably know, borrowing money is a basic service in the financial industry. Most banks and similar institutions are happy to issue credit backed by a persons assets, whether its their house or a portfolio of stocks.
Top Bitcoin And Crypto Lending Platforms Rated And Reviewed
Cryptocurrency has seen a rise in popularity, and mainstream adoption means more avenues for growing savings and boosting investments. One of these avenues is through crypto lending. With a crypto loan, you can pledge a portion of the crypto you hold as collateral for the money you borrow. As with other secure loans, such as mortgages or car loans, you retain ownership of the cryptocurrency as you pay off the loan.
In most cases, lending platforms will allow you to borrow up to 50% of your digital asset balance, though some platforms will let you borrow as much as 90% of your portfolios value. Depending on the platform you use, you may receive your funds in US dollars or specific cryptocurrencies.
The lending platforms operate in a straightforward manner, making it easy for even novice crypto investors to get involved. As a result, more and more people are attracted to crypto lending platforms because they offer low-interest rates and fast funding. And, these platforms typically dont run credit checks, making them an attractive option for those with poor credit or no credit history.
Heres a look at our top bitcoin and altcoin lending platforms on the market.
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Best For Crypto Variety: Celsius
Interest rate: 3.2% to 21.49%
Celsius has been operating since 2018 and has processed $8.2 billion in loans among its 340,000 users. Celsius has passed an asset verification from a trusted auditor, Chainalysis, so you can invest worry-free.
Celsius offers a plethora of cryptocurrencies to fund your savings account with. Celsius and BlockFi offer similar APY for Bitcoin and Ethereum, but Celsius offers a more competitive APY for stablecoins. Celsius offers a staggering 13.86% APY for tether, USDC, GUSD and TUSD, which are all stablecoins.
Similar to BlockFi, Celsius also offers loans to its users with a minimum loan of $500. There is no maximum loan you can take out, but you need to put up a proportional amount of crypto to receive the loan.
- Limited cryptocurrencies
If youre constantly on the go, Celsius offers a great mobile app to manage your finances from anywhere. Both its PC and mobile user interfaces are simplistic and easy to use.
Pros And Cons Of A Bitcoin Loan Site
- BTC is not vulnerable to the actions of a central governing authority such as financial institutions, political body or bank executives.
- Borderless transactions: Bitcoin’s the world’s first worldwide currency that can easily be sent across borders without delay. As the world moves to a globalized economy, this will become even more important.
- Super Security: Bitcoin is very secure due to its blockchain design which features advanced cryptography during the transaction process.
- Popularity: As the most popular cryptocurrency, Bitcoin is the first choice for crypto traders looking to enter this new market.
- Volatility: Bitcoin is infamous for its volatility. Any day, there can be a dramatic price swing and for the most part, it’s largely unpredictable. However, in recent years, this volatility has become less dramatic as the market matures.
- Competition: As a cryptocurrency in the first generation, there are many facets of Bitcoin’s technology that have been improved upon with second and third generation crypto’s to date. Many question the longevity of BTC in the years to come.
However, with YouHodler, this volatility does not have to be an issue. By choosing a Bitcoin loan on YouHodler and using BTC as collateral, crypto investors do not risk losing any potential growth in the future as they would be selling it. Actually, a loan Bitcoin just might be the difference in growing your portfolio.
Read Also: When Can You Buy Crypto On Robinhood
How To Cash Out Bitcoin Using Localbitcoins
1. First, you will need to open an account at Local Bitcoins. You can do this by .
2. Choose a username and a strong password. You also need to enter and confirm your email address.
3. Once you are logged in, click on Sell Bitcoins at the top of the page.
4. Then you need to choose the country where your ideal buyers are located. I recommend using your own country , however, this is up to you. In this example, I have selected the UK. You also need to enter the amount of Bitcoin you wish to sell.
5. As you will see below, there are many different ways to cash out your Bitcoin.
6. In this example, I will show you how to cash out Bitcoin using PayPal. As you can see, the buyer has a 100% feedback rating, and has completed more than 1000 trades! This is a sign of a serious, legitimate buyer.
7. Confirm the amount of Bitcoin you want to sell and enter your PayPal email address. Then click on Send Trade Request.
8. Your buyer will then receive a notification to say that you would like to sell your Bitcoins to them. Once they accept, you will then send your Bitcoins to the LocalBitcoins escrow . So, the buyer will not receive your Bitcoins until they have paid you, and you confirm they have done so.
9. The buyer should contact you to let you know that the funds have been sent. Check that the funds have arrived in your PayPal, then click on Payment Received, and you’re finished.
Congratulations! You now know how to cash out Bitcoin using a P2P exchange.
What Is A Crypto Loan
A crypto loan is a type of secured loan, similar to an auto loan, in which you pledge an asset to secure financing.
In this case, cryptocurrency is the asset offered to a lender in exchange for cash that youll pay back in installments. If you fail to repay the loan, the lender will liquidate or cash out the cryptocurrency.
Crypto lenders like BlockFi, Celsius and Unchained Capital have relatively low annual percentage rates and one- to three-year loan terms, but high minimum loan amounts.
For example, BlockFis crypto loans start at 4.5% APR on one-year loans, but the minimum loan amount is $10,000.
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Loan To Value / Collateralized Bitcoin Loans
The arguably most revolutionary crypto/Bitcoin loan type is the LTV/Collateralized loan model. In this bitcoin lending model, a specific asset is put up as collateral for the loan. Collateral is traditionally some form of value that is locked-up and used in lending to 1.) Ensure that the loan will be repaid, and 2.) Give the lender confidence to issue a loan as you already own something in similar value. For example, completely unrealistic, but lets say someone offered you a loan of $10,000 but before that, you have to keep $5,000 worth in jewelry with an escrow account. In this case, if it ever becomes apparent youre not going to pay off the loan, the $5,000 worth of jewelry will be sold to pay for the loan. That might be confusing, but keep in mind its just an example, lets get more into the details.
While collateralized loans are apparent in legacy finance, they are much more efficient and quick when used in cryptocurrency.
A loan-to-value ratio is important to understand in this case: LTV ratio is an indicator of the value of certain collateral compared to the loan that has been given. This is very common in real estate and has been transferred more apparently for Bitcoin and crypto loans. LTV ratios are demonstrative of how close or far your loan is from liquidation, or selling your underlying collateral in order to pay back the loan. Confusing? Probably so lets use the image and scenario to assist:
Can I Get A Bitcoin Loan With No Verification
Although we came across a number of crypto loan sites that require no verification, the reputation of these platforms remains to be seen. As such, its best to stick with trusted crypto loan sites like Aqru and Crypto.com both of which require verification documents.
This article was written for Business 2 Community by Kane Pepi.
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Should You Borrow Money To Buy Bitcoin
Borrowing money to buy bitcoin is a perilous undertaking with tremendous risks. What if you borrow $19,000 to buy one bitcoin, but BTC suddenly drops to $10,000? You still have to pay back the $19,000 with interest and your asset has lost nearly half its value. These kinds of declines, even if they are temporary, can leave you in agony, hoping your asset returns to the price you paid for it.
It is possible to borrow money from your credit card to buy bitcoin, Litecoin, Ethereum, or Bitcoin Cash through CoinBase. If you pay off the credit card every month, you should be okay. Credit cards are a convenient way to lend money. However, do not miss payments because you can suffer from late fees, interest expenses, or possible downgrading of your credit score.
If you are a holder of bitcoin, you can use your bitcoin to borrow money in order to buy more bitcoin. This type of leverage has been common for stocks on Wall Street for a long time, but now these types of arrangements are popping up in the crypto markets. If this type of arrangement interests you, check out our recent article detailing seven borrowing and lending platforms for bitcoin.
Could Blockchain Be The Future Of Loans
Yes, it could be. Cryptocurrency could be the future of money making blockchain the future of loans. Although these projects have had billions of dollars locked into their protocols, they have a long way to go before taking over the multi-trillion dollar debt industry.
Right now most crypto loans are consumer-oriented. For crypto loans to truly become mainstream, developers need to create a better system of credit on the blockchain this will allow more users to receive loans and increase the utility of borrowing money through the blockchain.
Is crypto lending safe?
So long as you use a reputable platform, receiving crypto loans and lending out your cryptocurrency is safe. However, there will always be risk associated with the volatility of cryptocurrency. If youre a risk-averse investor, then you may want to stick with lending stablecoins like DAI, USDC and USDT.
How much can I make from crypto lending?
There are many factors that go into how much you can make from lending cryptocurrency. For stablecoins, you can expect to make between 6% to 12% annually, but interest rates for other cryptocurrencies. For Bitcoin and Ethereum, you can expect to make between 4% to 10% annual interest.
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Centralized Crypto Lending Platforms
Centralized cryptocurrency lending platforms operate most similarly to banks. Platforms like BlockFi allow you to earn interest on your cryptocurrency by storing your funds on its platform. BlockFi then lends your money to trusted institutional and corporate buyers.
The interest rate you earn is a floating interest rate, meaning that it changes with supply and demand. Over the past year, however, the APY for stablecoins on cryptocurrency lending platforms has remained relatively stable around 6% to 10%. The cryptocurrency you chose to fund your account affects the interest rate you earn. For example, you can earn a 6% interest rate on Bitcoin, but if you choose to fund your account with USDT you can earn 9.3% annually.