December 2022 – Crypto Hash Auctions

Bitcoin took the crypto world by storm with his coronation as one-hundred million dollars were exchanged in just ten minutes, marking him out immediately to be a force that would not be reckoned with soon enough!

The market cap is currently sitting at around 500 billion dollars – more than 40% share on both bitcoin cash and ethereum combined (though these two still have quite some way ahead).

Cryptocurrencies are becoming more and more popular with investors, especially those who believe in cryptocurrency as a store of value or an inflation hedge. Bitcoin is seen by these groups due its premier status among all cryptocurrencies- it has grown tremendously over time which gives credibility to this investment decision!

Bitcoin has grown beyond being just an investment and can now be used for all sorts of things. You even have Bitcoin ATMs where you exchange your digital currency into cash easily!

Let’s discuss why that is in this article.

What Is A Bitcoin Loan?

Bitcoin loans are a new and exciting way to get your hands on some bitcoins. You can either borrow money using the cryptocurrency as collateral, or lend it out in exchange for an interest rate that’s either determined by professional lenders around the world who want this type of exposure to diversify their portfolios with greater risk-adjusted returns than traditional financial products offer – but with lower risks associated too!

Though it is now possible to find many crypto lending platforms that provide this service, Bitcoin probably started as a peer-to-peer transaction between two parties.

The recent growth of Bitcoin as an investment and technology has led to a new industry, where people can borrow cryptocurrency for short periods. This is not only safe but it’s also highly profitable!

Why Take a Bitcoin Loan?

Why should you bother with Bitcoin loans? Here are a few reasons to consider:

Bitcoin Loans vs. Traditional Loans

Instant Disbursement

Bitcoin loans provide a quick and easy way to get money, without all the hassle. Unlike traditional lending practices which can take days or even months before approval-disbursement process is completed; with bitcoin it’s almost instant!

No Geographic Limitations

Bitcoin loans are a way to get funds when you need them without moving your assets, letting people who don’t have bank accounts take advantage of this financial service. The process is simple and quick-you just submit an application online or over the phone!

Lower Interest Rates

Those who want to get a loan for cryptocurrency should look no further than Nexo. With an APR of only 13%, it’s much cheaper than other platforms which charge up 35,99%.

Little or No Credit Check

The average person would be denied a traditional loan because they don’t meet the requirements. But with Bitcoin loans, all you need to do is deposit some collateral and your application will go through!

There’s no need to worry about meeting bank-high standards when you apply for a Bitcoin loan. The process is much easier than traditional banks and doesn’t require any identification or credit checks!

Bitcoin Loans vs. Other Crypto Loans

Deeper Liquidity

With Bitcoin’s market cap at over twice that of Ethereum, there is less risk in loan liquidations with bitcoins because they are more stable.

A Wider Variety of Lending Platforms

The demand for bitcoin is at an all-time high, with more crypto lending platforms offering the currency as a service. Some even offer only bitcoins in loan proceedings!

Higher Loan-to-Value Ratio

While most cryptocurrencies have low LTV ratios, Bitcoin offers you the opportunity for high-interest loans because it comes with such a good rating.

What Are The Risks?

Before making the decision to invest in Bitcoin lending, it is important to balance the potential risks with the benefits. Some of those risks include:

Liquidations

Liquidations are always possible when the price of your collateral decreases to a certain threshold. This can be especially true for Bitcoin, since it’s so volatile and has experienced many extreme shifts in value over short periods on multiple occasions already!

In the event of a crisis, it is important to keep an eye on your LTV ratio and have some cash handy in case you need extra collateral.

Platform Security

You’re way too deep with these guys. If they go bankrupt or if their site gets hacked – what was your collateral? You’ll never get it back!

You can reduce this risk by finding out as much about the Bitcoin lending provider before entrusting your collateral to them.

Regulation Problems

Crypto loan providers are not insured, which means you don’t know what to expect when dealing with them. The Nexo andBlockFi offer insurance policies for unexpected events but it’s the exception rather than rule in this industry of unlicensed businesses that often lack transparency or honesty about their business practices – something we can’t accommodate at Anonymizer Pro .

How to Get a Bitcoin Loan

So now that you know what bitcoin loans are, it’s time to get your hands on one. The next step is straightforward – just sign up for a lenders platform and complete KYC registration!

In some cases there’s no need to provide any collateral, or even verify your identity. You just come with the funding you want and get it approved instantly!

Factors to Consider Before Getting Bitcoin Loans

The Loan-to-Value Ratio

The loan-to-value ratio (or LTV) is a measure of how much money you will get back when your house sells. The higher this number, the less likely it’ll be for lenders to give out any more loans because there’s not enough equity in their portfolio!

That’s right, if your Bitcoin LTV ratio is 50% or higher then you’re entitled to get up to half of what remains after a loan. The lower this number goes down the more risk there will be in getting repayment from others for their cryptocurrency assets as collateral on an advanced contract with them which has been incurred at today’s rates and conditions set by market forces beyond our control!

The Interest Rate

This is a common misconception that the lower your interest rate, the better. It’s important to remember this when applying for loans from different platforms because they all have their own rules and regulations regarding eligibility which can vary based on what type of lending institution it is.

Nexo’s loyalty program, for instance, allows you to take advantage of their low interest rates by getting 0% APR on lending out NEXO tokens when at least 10% is invested in that cryptocurrency.

Tax Regulations

The tax on bitcoin loans may be complicated. You should know how much of your earnings will go towards paying off the debt, as well as if there are any provisions in place to reduce what you owe taxes wise!

Where to Get a Bitcoin Loan

The four following platforms offer reliable Bitcoin lending services.

YouHodler

Youhodler is a unique platform that provides crypto loans and allows users to spend cash while saving or holding their digital assets. The choice for which cryptocurrencies are supported on YouHodler run into the thousands – including Bitcoin, Ethereum and more!

When you hold onto crypto with YouHodler, your digital assets are protected by a partnership between Ledger Vault and other top-tier security providers. Not only does this protect the health of every last penny in our reserves but it also provides insurance up to $150 million dollars should any harm come near them!

Users of YouHodler have access to a variety of products, including crypto loans and exchanges. The company also offers savings accounts with interest rates higher than those found on traditional banks for those who want more control over their money or just need some extra cash when needed!

Nexo

Nexo is a cryptocurrency lending platform that supports 33 different cryptocurrencies. It offers its users banking services by allowing them to loan Bitcoin and other digital assets based on blockchain technology instead of traditional banks who only provide fiat currency accounts or credit cards for purchasing goods with money you haven’t earned yet as soon as possible after saving up all those coins in your crypto wallet!

The platform’s security is second to none. It has third-party audits and a $775 million insurance fund, meaning your Bitcoins are safe with them!

Nexo offers a variety of services that can be useful to crypto enthusiasts. For example, you get 2% cashback on all your purchases when using the card and there’s also an impressive referral program!

CoinLoan

CoinLoan is a revolutionary platform that offers users daily interests on their bitcoins. All you have to do in order for this service to work, deposit funds and then access them from anywhere at no cost!

The opportunity to earn cash by staking your crypto assets is one you should not miss! You can find all the information on which coins are supported and their rates here, it doesn’t matter what currency or token type (unless there’s something specific I haven’t seen yet). And with just one click of a button; offering/buying sell swap contracts becomes easy as pie.

CoinLoan is like having an insurance policy for your assets. You can use biometric authentication in the apps, so that no one but you know what’s going on with them!

Binance

The world’s largest cryptocurrency exchange is also one of its most popular. Binance has near-instantaneous transactions and accepts a wide variety of coins, making it easy to trade altcoins or Bitcoin alongside more established ones like Ethereum with ease!

Binance offers crypto lending and borrowing where you can get an instant loan backed by Bitcoin that lasts up to six months. The interest charge is hourly, but there’s a 65 percent LTV ratio if your request for funds comes in at the beginning of any given hour – meaning it won’t take much before this becomes profitable!

The Binance platform is not like many other lending sites that charge prepayment fees. You can pay back the entire loan even before your period of use ends!

Final Thoughts

Bitcoin loans are a fantastic way of keeping your Bitcoin without selling it. While the security risks and lack of regulation might make some hesitant, these types of loans offer numerous benefits that should not be ignored.

Stablecoins are cryptocurrencies that maintain a stead value, by being pegged to anothercurrency, commodity or financial instrument. They provide an option for investors of high volatile cryptocurrencies, such as Bitcoin (BTC), who want to partake in common transactions without the worry of outrageous swings in their investment.

Bitcoin, though still the most popular cryptocurrency, is highly volatile in price. For example, its value increased from $5,000 to over $63,000 within a one year time span; however it then decreased almost 50% in worth just two months later. Furthermore, intraday swings are often large; at times the currency will move more than 10% in less than five hours.

This volatility can be ideal for traders, but those performing regular transactions, like buyers and sellers, are left to speculate on the risks. Those investing in cryptocurrencies for long-term appreciation don’t want to become famous for paying 10,000 Bitcoins for two pizzas. Most merchants also don’t want to take a loss if the price of a cryptocurrency plummets afterthey’ve been paid in it.

A currency that’s not legal tender must remain relatively stable to serve as a medium of exchange, meaning those who accept it are assured it will retain purchasing power in the short term. Among traditional fiat currencies, forex trading daily moves of even 1% are rare.

As the name implies, stablecoins aim to keep the value of cryptocurrency from changing rapidly.

While some argue that stablecoins are unnecessary given the ubiquity of the U.S. dollar, many cryptocurrency investors believe digital tender not regulated by central banks is the future. There are three types of stablecoins, which each use a different method to maintain their value.

Fiat-Collateralized Stablecoins

Fiat-collateralized stablecoins derive their value from being backed by a reserve of fiat currency, such as the U.S. dollar. In theory, other forms of collateral could be used to back these stablecoins (e..g precious metals or commodities), but most currently in circulation are only backed by USD reserves.

Tether (USDT) and TrueUSD (TUSD) are popular stablecoins backed by U.S. dollar reserves that are maintained by independent custodians and regularly audited for parity to the dollar.

Crypto-Collateralized Stablecoins

Stablecoins that are backed by other cryptocurrencies are known as crypto-collateralized stablecoins. Because the reserve cryptocurrency may also be volatile, these types of stablecoins are overcollateralized— meaning that the value of cryptocurrency held in reserves is greater than the value ofstablecoins issued.

In order to issue $1 million in a crypto-backed stablecoin, MakerDAO holds $2 million in reserve. This is done as an insurance policy against a 50% decline Ethereum’s value (which Dai is pegged to), should it happen. For example, though DAI is pegged the USD, 150% of all circulating DAI is backed by ETH and other cryptocurrencies.

Algorithmic Stablecoins

Algorithmic stablecoins are those that use an algorithm, or a set computer program, to stabilize the value of the coin by controlling its supply. This is as opposed to holding reserve assets which some stablecoins do and some don’t.

In contrast to central banks, which rely on a reserve asset to maintain the value of their currency exchange, cryptocurrencies are not backed by anything. Rather, the issuing organization establishes monetary policy in public and its status as tender reinforces credibility.

Algorithmic stablecoin issuers don’t have the same advantages as traditional issuers, and thus can’t fall back on them in a crisis. On May 11, 2022, the price of TerraUSD (UST) plummeted more than 60%, decoupling it from the U.S. dollar peg overnight. This was caused by an over 80% Luna token value drop that is related to Terra’s pegging system.

Stablecoin Regulation

Stablecoins have come under fire by regulators recently, as the market has grown rapidly to be worth $130 billion. In October 2021, IOSCO said that stablecoins should be regulated in the same way as other financial infrastructure, including payment systems and clearinghouses. The proposed rules would focus on those stablecoins which are considered systemically important by regulators- i.e., those with potential to disrupt existing payment and settlement transactions..

Furthermore, politicians have advocated for stricter regulation of stablecoins. For example, in September 2021, Senator Cynthia Lummis (R-Wyoming) called for audits of stablecoin issuers to become routine, while others support replicated bank regulations for the sector.

Month: December 2022