Being in the crypto market and having used a few or several exchanges, you might have come across the term ‘crypto-backed loans’.
Like a regular loan gotten from the bank, a crypto-backed loan is not too far from what you’ve come across. It simply is a service that lets you take loans using a crypto asset as collateral.
Why would you need a crypto-backed loan?
You are already a user on Naijacrypto. You’ve been trading crypto for a while, and have bought some BTC in bits overtime amounting to 10,000 naira equivalent, you’re also hoping to put in more money to buy more as time goes on because BTC, as you know, is the next big thing yes?
Now it’s towards the end of the month and you do not have much cash left until your next paycheck and there’s an unexpected problem with the pumping machine in your house. You call the plumber, and he tells you it’ll cost 5000naira to get it fixed but you have no money. Your friend tells you to sell your BTC to get that money to pay for it and you know how much you do not want to sell your crypto now.
With the crypto-backed loan, you can get that money as urgently as you need it with the crypto in your wallet that you are not willing to part with at the time. Using your crypto and collateral, you can get a certain amount. With your BTC worth 10,000 naira, you can get a loan of 5,000 Naira and payback at the end of the loan tenure which by then you would have your paycheck. This is interesting because you still have your crypto intact in order not to miss out on your market gains from the increase in the value of that asset.
So, crypto-backed loans can save you from emergencies.
You are a great and experienced crypto market trader who knows the ins and outs of most financial markets. You’ve gotten predictions about a particular bullish or bearish market and you have possession of a cryptocurrency that you aren’t willing to liquidate at the moment. Crypto-backed loans help to save the day.
Your crypto-asset could be used as collateral to get you a loan amount of whatever fiat you would need to take your market decision with. With your predictions being just what you planned, you have earned yourself a profit when returning the loan amount and interest.
Here, again, crypto-backed loans have worked for you.
Finally, with this revolution in the money and financial sector around the world, there are more opportunities to grow one’s portfolio as an investor. If you are an investor looking to diversify investment in other markets in 2021, getting inclined with crypto opportunities is one great way to start.
Start today on www.naijacrypto.com/loan
written by Abia Joy