Top 5 Bitcoin Lending Platforms
Trading Bitcoin can often be quite stressful. The volatility of cryptocurrency pushes some users to “HODL” their assets in an online Bitcoin wallet, waiting for a better price. Others struggle to acquire enough coins to trade at the level they want.
The solution to both problems is Bitcoin lending. Bitcoin lenders and borrowers are connected via lending platforms.
These platforms have become increasingly popular, and Bitcoin investors can choose which one suits them best. In this article, we’ll focus on five excellent Bitcoin lending services and tell you everything you need to know about them.
Based and regulated in the US, this is a centralized crypto lending platform, meaning a company or a group owns it. BlockFi offers high interest rates for Bitcoin and Ethereum.
You can get up to a 6% interest rate for Bitcoin deposits under five Bitcoins and up to 4.5% on Ethereum lending. These are, without a doubt, some of the best rates offered for both currencies.
There is also no minimum deposit that allows users with online Bitcoin wallets of any size to participate in the lending process.
The platform also provides high security as it’s a licensed custodian with an excellent track record. However, the downside of BlockFi is that it offers limited options in cryptocurrencies.
If you’re a lender looking to get the most out of your coins, YouHodler offers up to a 12% annual percentage rate. In addition, borrowers can expect to get a Bitcoin loan with up to 90% loan-to-value.
This platform is also a member of the Crypto Valley Association, the largest blockchain ecosystem in the world. Rest assured. You can trust YouHodler with your digital money. The service has a low minimum deposit and offers flexible payments.
It also has something called “multi-hodl,” which allows lenders to keep 20% of their portfolio for investing in cryptocurrencies. However, some of the drawbacks include a lack of experience in the field and limited choice in altcoins.
If you are more interested in decentralized lending platforms, CoinLoan is one of the best options. Entirely P2P reliant, it offers complete transparency when it comes to transactions.
Users will appreciate that the platform doesn’t charge fees for depositing and withdrawing, which is not the case with many centralized companies. It also offers a lot of flexibility.
You can choose the interest rate and specify the loan term, amount, and repayment method. For borrowers, it’s one of the best platforms online.
But compared to centralized platforms, CoinLoan has infrequent customer service, which can be a problem for many.
This is a UK-founded lending platform that is currently based in the Marshall Islands. BTCPop offers direct loan servicing and has many currencies available. They also don’t regulate the terms, limits, deadlines, and payout dates.
Everything is up to the users. Another thing they do to provide a better service is to track the reputations of borrowers and lenders. That way, everyone’s coins stay safe.
Another excellent thing about this platform is that they allow clients to use hardware wallets, which is quite rare.
However, borrowers will run into high loan rates, which could mean less traffic for the lenders. They also charge 1% listing fees and 2% fee for late payments.
If you prefer using PayPal to your credit card for Bitcoin transactions, XCoins makes that possible. The platform has only been operational since 2018 but has managed to surpass the competition easily.
Leveraging PayPal is only one of the great decisions made by the company. The incredibly low minimum deposit is another. Lenders can transfer as little as £20 from their PayPal account and start earning interest on their Bitcoins.
As a centralized platform, fixed terms are a part of the deal. Borrowers must pay their loan in a single sum, but lenders can withdraw their funds at any time.
XCoins has over 250,000 users worldwide but has a less than impressive user experience. It also doesn’t offer any insurance against hacks or theft. Finally, it only supports Bitcoin and no other digital currency.
Choosing the Lending Platform on Your Terms
Before you dip into your Bitcoin wallet online and start lending coins, make sure to do your research first. These five platforms are all excellent options but won’t work for every user.
For borrowers picking the right Bitcoin lending platform can even be more challenging. By asking for a loan, you’re always in a more vulnerable position, especially with the volatility of Bitcoin.
Also, keep in mind that even though most lending platforms will grant the loan immediately, you will have to repay it in full before you see any profit.