As a crypto investor, you’ve undoubtedly stumbled upon Bitcoin lending platform ads. These platforms come in all different sizes and each with different procedures. Bitcoin lending first gained popularity in 2017 as the crypto market skyrocketed to new heights. The hype of last year’s crypto mania also created a prime environment for Bitcoin lending.
Today, numerous Bitcoin lending platforms offer all types of financing services. Financing options include obtaining a loan to buy Bitcoin, using your Bitcoin to get a loan in fiat, and lending your crypto to others seeking financing. While all of these platforms offer different services, they all have one thing in common: they’re all betting the price of crypto will continue to rise.
Leverage
The primary goal of Bitcoin lending platforms is to provide users with more leverage in their trading endeavors. Leverage is an investment strategy in which you multiply the effectiveness of your trades via borrowed money. It’s a common strategy in the stock market.
In theory, the concept sounds fantastic. You get a loan for USD 10,000, buy Bitcoin, the price rises, and you laugh all the way to the bank. In reality, the process is much more difficult than this, and in most instances, investors find themselves with huge piles of debt.
Get a Loan to Buy Bitcoin
Buying Bitcoin can get expensive. Let’s face it, many new investors that would be better off with Bitcoin instead invest in cheaper altcoins because they can own full coins at a fraction of the cost. Experienced crypto investors understand that holding a percentage of Bitcoin can be far more valuable than owning a full altcoin.
Lending firms quickly recognized both the desire of investors to own complete coins and the distancing of traditional lending platforms from the crypto space. This desire led to a flood of Bitcoin lending platforms emerging over the last year. These platforms provide users with more liquidity to purchase their crypto. SoFi is one such platform that has gained popularity over the previous year. SoFi provides you access to fiat funds to buy crypto directly. The platform also offers student loan refinancing and personal loans.
