Crypto-Backed LoansGain Popularity
As Bitcoin continues to be the best appreciated asset in 2019, beating off tough competition from oil and the stock markets to more than double its price at the start of January 2019, the crypto market rally has infected other related sectors, including that of crypto-backed loan services.
An industry source spoke to Bitcoin.com, telling of a growing customer base thanks to crypto holders now more willing to stake their funds and borrow against it, instead of selling their assets outright.
According to the source, there have been more and more platforms providing loans backed by cryptocurrency over the last two years. Their services have also diversified, including providing interest on crypto savings and these are becoming more attractive as central banks and other conventional financial institutions lower their interest rates.
Salt Lending, which now operates in over 25 global markets, boasts users in the tens of thousands and accepts Bitcoin, Ethereum, Litecoin, Dash and even meme-inspired crypto Dogecoin. They offer up to 70% of the asset value of loans for 5.99%APR, loaning values from USD 5,000 to USD 25 million. Another platform is Youhodler that will loan up to USD 30,000 for 90% of staked crypto. It even supports buying of crypto assets and provides services typical to crypto exchanges.
Critics of loan services, however, say that these are merely mirrors of models used by traditional banks, and can only be sustained by bull market trends.
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