Cryptocurrency has a rising popularity, which is growing each day rapidly. This is not a surprise since more pieces of news are appearing under the influence of personalities like Elon Musk or different governments, which start to regulate this market. Mostly, crypto assets like Bitcoin are highly volatile, they can rise and fall gramandosuly within a day, or DOGE, which reacts after Musk’s tweets.
Crypto loans were introduced quite a while ago and had admiration from crypto owners, since it can be a way of earning. Borrowers use digital assets as collateral for loans, similar to how a house or a car is used as collateral for a mortgage or auto loan and once the loan is approved, users receive their stablecoins such as USDT or USDC.
But what exactly are crypto-to-crypto loans?
یہ کس طرح کام کرتا ہے؟
Crypto loans are not a new feature. You could previously try it out with our platform, which offers to take loans both on bullish and bearish markets. It allows you to spend your cryptocurrency without selling it.
But what are crypto-to-crypto loans?
It operates in the same way as traditional crypto loans. Instead of stablecoins, at this moment you can acquire Bitcoin, Ethereum, Digibyte, or Dogecoin, which you can then sell for profit in the future. The customer will receive the crypto immediately after depositing their collateral, excluding stablecoin as a bridge between two currencies.
NOTE: We have to mention that at the moment the max amounts we are able to give our clients for loans are BTC = 0.2, ETH = 1.5, DGB = 190000, DOGE = 40000.
Why consider crypto-to-crypto loans?
Crypto to crypto loans can be considered in a situation where the client predicts or has some insights that the coin they would like to get as a loan will lose in price. If it does, there is an opportunity to sell the coin and get more of it in the dip. Basically, this works for the bearish market.
Here is an example: Our client decides to put their Bitcoin and get Dogecoin as a loan. They put the BTC on CoinRabbit as a collateral and get 50% of a loan, according to our platform’s LTV level, and get Dogecoin. A client can sell their DOGE and wait till its price falls and when it does – get some more DOGE, even more that they’ve got from our platform. In the end, the client closes the loan, giving back the DOGE they got plus the fee, or APR (Annual Percentage Rate), and staying with his BTC and DOGE.
If we take into account this chart of Dogecoin’s price for the period from 7th of October to 30th of October, it can be seen that its price dropped the most on October 27th. If a client had taken a loan against DOGE before it, then it would have been possible for them to get profit from it by selling the tokens beforehand and buying some in this exact dip.
Everything said above basically means that clients get more crypto without paying for it.
Unlike regular crypto loans, where you can lose your collateral when it hits the liquidations price, there are such losses. However, there might be some risks. So, what are they?
کیا خطرات ہیں
Before we explain the risks, let us remind you of loan-to-value ratio, or simply LTV. This ratio is a financial phrase used by lenders to represent the loan-to-collateral value ratio. In other words, Loan-to-Value is the assessment of the loan debt in relation to the value of the collateral asset (LTV).
In both cases of crypto loans with CoinRabbit platform, collateral is volatile and you get 50% of it, as we mentioned earlier.
With regular crypto loans, when your collateral’s price decreases, the LTV may get higher than liquidation level, then your loan will be automatically closed and the collateral will not be able to be gotten back.
With crypto-to-crypto loans, loan-to-value does not work the same way. If the loan’s price rises, then it gets closer to the liquidation level. Due to that fact the loan will be closed when the collateral price will reach the liquidation level.
Even if the crypto-to-crypto loan is automatically closed and you lost your collateral, you will still be left with your loan funds.
Although, in both ways CoinRabbit helps their clients to avoid that risk by notifying you multiple times via SMS notifications , when the current rate approaches the liquidation price.
A real example of getting profit with a crypto-to-crypto loan
Here is the simple explanation of crypto-to-crypto loans with the bear market with the help of CoinRabbit قرضے:
1. مثال کے طور پر، آپ کے پاس ہے۔ 0.0856 بی ٹی سی اور ملے 10.000 ڈوگ۔ سے قرض CoinRabbit for depositing your Bitcoin.
2. The price of DOGE at the time of getting the loan is $0.2665. آپ بیچیں یا تبادلہ کریں۔ 10000 ڈوگ۔ اس قیمت پر. اس طرح کی فروخت کے لئے آپ کے ارد گرد حاصل 2665 USDT
3. A month and a half later, during the cryptocurrency market continuing downswing, the price of DOGE dropped to $0.17.
You buy more DOGE at this rate – for 2665 USDT تم سمجھے 15676 ڈوگ۔
4. With such a market move you earn 5676 ڈوگ۔ آپ سے قرض حاصل کرنے کے لمحے سے فرق CoinRabbit.
5. اب آپ قرض کو بند کرکے اپنی جمع واپس لانا چاہتے ہیں۔
6. قرض کی سالانہ شرح سود ہے۔ 14٪ (اپریل)۔ چونکہ آپ نے ڈیڑھ ماہ میں قرض ادا کر دیا، اس لیے جمع ہونے والا سود ٹھیک ہے۔ 233 ڈوگ۔.
7. آپ اپنے قرض کی ادائیگی کی رقم کو بھیجتے ہیں۔ CoinRabbit جو 10233 ڈوگ۔ اور واپس حاصل کریں 0.0856 بی ٹی سی جمع
8. کل منافع ہے۔ 5443 ڈوگ۔ (یہ ہے کہ $925 at the moment). You can sell it or hold and wait for the right moment.
Step-to-step guide on how to get a short selling crypto loan
Today, crypto loan platforms like CoinRabbit have significantly simplified the loan application processes. To get a crypto loan today, all you need to do is navigate to CoinRabbit’s home page اور ذیل کے مراحل پر عمل کریں۔
- On the homepage, choose bear market loans.
- Under the Loan calculator section, select your prefered collateral and loan currency you would like to get;
- Enter the amount of your asset you want to deposit as collateral, and the Calculator will show you the Loan Amount you will receive and Click “Get Loan”;
- After clicking “Get Loan,” we will ask you to confirm the details, enter your wallet address, and verify your phone number;
- Next, send the collateral to the displayed address. After we receive it, the loan will be sent to you immediately.
اگر آپ کے پاس اب بھی کوئی سوال ہے تو آپ ہمیشہ ہماری ٹیم اور کسٹمر سپورٹ سے رابطہ کر سکتے ہیں۔ ویب سائٹ اور ہم خوشی سے آپ کی مدد کریں گے۔ یا ہمارے ساتھ شامل ہوں۔ ٹیلیگرام گروپ.
کے ساتھ آگے کرپٹو لون پر دوبارہ غور کریں۔ CoinRabbit.
Not financial advice. Do your own research and take everything moderate.Crypto backed loans have their own risks that should be taken respectively.
Source: https://coinrabbit.io/blog/crypto-to-crypto-loans-a-new-lending-frontier
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