Connect with us

Blockchain

Crypto Lending and Borrowing 101: What are Crypto Loans Even For?

Have you ever got a loan? Even if you haven’t, you’ve got to be familiar with the reason why people get them — they want to spend some money but don’t have it at the moment.  Traditionally, loans have been issued by banks. These want to protect themselves from losing money in case a borrower […]

Republished by Plato

Published

on


Have you ever got a loan? Even if you haven’t, you’ve got to be familiar with the reason why people get them — they want to spend some money but don’t have it at the moment. 

Traditionally, loans have been issued by banks. These want to protect themselves from losing money in case a borrower cannot repay the loan — and they collect your data, make credit checks, require proof of income, and tons of other paperwork. Small loans can be issued fast, but when it comes to borrowing more money, approval can take days. 

Getting a loan in crypto solves most of these problems. Crypto lending issues loans in minutes with no credit checks and even without the identity confirmation — all you need is to provide collateral. In this guide, we will go through the reasons to get a crypto loan, explore why CeFi loans are a robust alternative to DeFi, and some exciting ways to spend your cryptocurrency loan on. 

Why crypto loans? 

The crypto adoption rate is yet far from perfect. Most of the car dealers, travel and real estate agencies, brokers, and other places where you could spend your loan, still haven’t got along with crypto. Now, you may be asking — why even bother yourself with cryptocurrency lending? Here are the reasons: 

  • Crypto loans are instant. A loan in crypto is in many ways similar to the fiat one: this is a capital issued to you that you can start using immediately. But with crypto, you can access this loan in minutes irrespective of its size. And here’s why:
  • Crypto loans are permissionless, accessible to anyone, and limitless. In comparison with banks, the only thing that a Bitcoin lending service needs from you is a sum of crypto that you can temporarily provide as collateral. This is why cryptocurrency lending platforms don’t require credit checks and any documents. This is what makes them accessible to all the people in the world: even if you don’t have a credit history (or have a bad one) or even a bank account, you can get a loan. 

And finally, this is why they are limitless: your upper loan size depends only on the amount of crypto you can provide as collateral. If the loan-to-value ratio is 50%, you’d need to put up 1 BTC to get 13,000 USDT or USDC. Loan-to-value indicator is used by the lending services to protect themselves from losing funds.  

  • A crypto loan is a way to use your Bitcoin without spending it. Hodling crypto is cool, but sometimes we feel like using our stashes of Bitcoin — even though that may harm our long-term investment strategy. However, there’s no need for harm — getting a crypto loan is a way to profit from your crypto portfolio right now. 

What are CeFi and DeFi loans? How are they different? 

In DeFi, loans are issued by the smart contract-based protocols which also store your collateral. These services are decentralized and peer-to-peer, which means they connect borrowers and lenders without intermediaries. 

Getting a loan in CeFi means there’s an organization that issues you some money and stores your collateral. This is how CoinRabbit works. By this moment, it may sound to you that DeFi loans have more perks: they are transparent, secured by blockchain technology, and intermediaries can’t do anything with your money. We’d even say, there’s a common belief about the infallibility of DeFi loans. 

However, the real picture is quite a bit different. Here are the reasons why DeFi loans are far away from being called trustworthy: 

  • Smart contracts are made by people, and they may have bugs that hackers use to steal money. DeFi protocols are no stranger to bugs, and hackers are constantly looking for them. Only this year, a decentralized lending protocol bZx has been hacked twice in a matter of days, and a similar project Value DeFi has lost $6 in a hacker attack. These were the so-called flash loans famous for processing the loan in one transaction. 
  • Since DeFi loans are fully blockchain-based and there’s no “central processor”, no one may help you out in any case. Inversely, at CoinRabbit, you always know that there’s a 24/7 support team that can resolve any issue. As an example, we can increase your loan size at any moment.   
  • CeFi is a lot easier to use. In DeFi, you have to know what smart contracts are and how they work, all about self-managed crypto wallets, and more. In CeFi, you can get a loan without lengthy preparations using a user-friendly and intuitive interface. 
  • Genuine Bitcoin as collateral is possible in CeFi. Since most of the DeFi is based on Ethereum, you can’t operate there with Bitcoin. The best thing you could do is to exchange your Bitcoin for Wrapped Bitcoin — it was breaking news when wBTC was added as a collateral option in May this year on the Maker protocol. At CoinRabbit, doing this is not necessary — simply provide your live Bitcoin, and you’re good! Moreover, we will soon add fiat collateral options — a thing which could probably never be possible in DeFi. 

How can I use my crypto loan? 

  • Fulfill your dream without further delay. Buy anything that you’ve always wanted, but didn’t have enough money at hand to afford. Even if you can’t pay for it with crypto directly, mind that we issue loans in stablecoins — assets that can be easily swapped to USD and other fiat currencies. 
  • Invest or trade. USDT and USDC are compatible with a wide variety of assets and are accepted basically everywhere. When you trade, their stable price can serve as protection for your funds’ price fluctuation. If you invest in a high-yield project, repaying your loan might be much easier.
  • Arbitrage. Borrow on CoinRabbit at a 5% interest rate, and lend this crypto on a different service with a higher interest. The difference will be your profit. We will dedicate one of our further articles to this use case. 

Final word

By taking out a crypto loan, you’re making your crypto work for you. Bitcoin in your crypto wallet looks particularly cool in this bull run, but why simply look at it and enjoy the rising numbers? Provide it as collateral and explore all the opportunities of instant crypto loans. See here how much USDT or USDC you can get right now!

Post Author: CoinRabbit.io

Source: https://coinrabbit.io/blog/crypto-lending-and-borrowing-101-what-are-crypto-loans-even-for/

Blockchain

Korean Government To Levy Taxes On Bitcoin Capital Gains Starting 2022

Republished by Plato

Published

on

As cryptocurrencies continue to pick up steam and encompass the features of regular asset classes, governments have likewise imposed taxes on capital gains from digital currency. South Korea is the latest country to adopt this initiative. Its Ministry of Economy and Finance said it will levy taxes on cryptocurrency profits from next year.

The South Korean government is going ahead with its proposal to tax cryptocurrency returns after several reconsiderations. A local news agency, Yonhap reported in December that the National Assembly’s Planning and Finance committee deliberated on the amendment of income tax laws and individual consumption tax laws.

As part of the income regulatory initiative, cryptocurrency traders and investors are mandated to pay 20 percent if they earn more than 2.5 million won (almost $2300 at the present exchange rate) from bitcoin and other cryptocurrencies. Gains below 2.5 million won will not be taxed. The law was initially scheduled to be implemented in October this year, but it will now be enacted in 2022.

According to the new report, bitcoin gains will be filed under ‘other income.’ Cryptocurrency investors will report their gains through an income statement and will pay taxes in May every year.

A turn of proceedings saw South Korea become a burgeoning cryptocurrency market. In 2017, the government announced that it would strictly regulate cryptocurrency transactions and even shut down exchanges in the country after Seoul-based exchange, Youbit, was hacked.

Bithumb Tax Saga

This is not the Korean government’s first attempt at bitcoin taxation. Korea’s National Tax Service asked cryptocurrency exchange, Bithumb to pay its foreign customers withholding taxes to the tune of 80 million won in 2019.

There were uncertainties surrounding that. It was unclear whether the cryptocurrency industry was subject to withholding tax. Bithumb filed a complaint to the tax tribunal over what is referred to as a “groundless” tax imposed by the NTS. It also argued that cryptocurrencies were not recognized by South Korean law and should not be taxable.

The industry has evolved since then. Cryptocurrencies are bridging the gap on conventional assets, and emerging laws classify them as taxable properties.

SPECIAL OFFER (Sponsored)
Binance Futures 50 USDT FREE Voucher: Use this link to register & get 10% off fees and 50 USDT when trading 500 USDT (limited offer).

PrimeXBT Special Offer: Use this link to register & enter CRYPTOPOTATO35 code to get 35% free bonus on any deposit up to 1 BTC.

You Might Also Like:


Source: https://cryptopotato.com/korean-government-to-levy-taxes-on-bitcoin-capital-gains-starting-2022/

Continue Reading

Blockchain

Vice President of Nigeria Tips Cryptocurrencies To Challenge Traditional Banking

Republished by Plato

Published

on

The Nigerian cryptocurrency community was shaken to its core when the country’s apex bank released a circular warning financial institutions to desist from enabling cryptocurrency transactions. The Central Bank made arguments to justify the decision, with several notable figures weighing in on the subject.

Nigeria’s Vice President, Prof. Yemi Osinbajo is the latest to share his view on the ban. In his keynote address at the CBN Bankers’ Committee Economic Summit, Osinbajo tipped digital assets to fiercely challenge traditional and reserve banking in the future.

Calls For Knowledge-Based Actions That Will Prove Beneficial

The ban on cryptocurrencies has continued making the rounds in Nigeria. Several weeks after, it has finally forced reactions from the upper echelon of the government. Vice President Yemi Osinbajo bared his views at a summit organized by the Central Bank earlier today.

He admitted to the disruptive capacity of cryptocurrencies and blockchain technology, stating that they could well displace existing banking systems in the coming years.

He further opined that emerging technologies like blockchain must be adopted strategically, before praising the regulatory bodies for being ‘very articulate’ with their measures. He called for initiatives that will enable people to enjoy the benefits of blockchains and cryptocurrencies while keeping the adverse effects in check.

Prior to Osinbajo’s remarks, CBN Governor, Godwin Emefiele publicly defended the ban, saying that cryptocurrencies were created “out of thin air”. He further described cryptocurrencies as being “used to describe the activities of players in an electronic dark world”

Many Nigerians have taken the Vice President’s comments with a grain of salt. They urged him to use his influence to turn the tides instead.

Waging War Between Cryptocurrencies and Nigerian Banking System

Industry enthusiasts in Nigeria interpreted the CBN ban as a direct attack on cryptocurrencies. Speculations emerged that the apex bank was rattled by the traction gained by the digital assets and the fact that they were gradually displacing conventional banks.

A Nigerian economist shared a shocking statistic that bared the Nigerian Stock Exchange trading volume and how it measured against the trading volume on Binance.

In all of these, it is widely rumored that the adoption of bitcoin in last year’s protest against police brutality was the last straw to break the camel’s back. Activists spearheading the protests started accepting bitcoin donations after the Central Bank issued orders to freeze their bank accounts. The recent ban allegedly signals the central bank’s intention to maintain a stronghold on the country’s monetary system.

Entrepreneur and investor, Victor Asemota believes that banning cryptocurrencies is self-defeating and does not address the deficient banking system. He tweeted :

“I have predicted the demise of traditional banking institutions in Africa for a while now until things accelerated during the pandemic and agent models became prominent. The cost structure of old banking Africa do not make sense. Community banking and cooperatives make more sense. What happened to Nigerian remittances during the pandemic was that people discovered more efficient channels to send money home as bank branches were closed. We now had multiple FX exchanges as people became aware that it was lucrative. Crypto is not the problem, it is banking.”

SPECIAL OFFER (Sponsored)
Binance Futures 50 USDT FREE Voucher: Use this link to register & get 10% off fees and 50 USDT when trading 500 USDT (limited offer).

PrimeXBT Special Offer: Use this link to register & enter CRYPTOPOTATO35 code to get 35% free bonus on any deposit up to 1 BTC.

You Might Also Like:


Source: https://cryptopotato.com/vice-president-of-nigeria-tips-cryptocurrencies-to-challenge-traditional-banking/

Continue Reading

Blockchain

Stellar, BitTorrent, DigiByte Price Analysis: 28 February

Republished by Plato

Published

on

The cryptocurrency market has had to face increased bearish momentum in the past week and with Bitcoin dropping to the $45k price range, many of the market’s altcoins too have followed BTC and traded lower. At the time of writing, Bitcoin was trading at $44,474 with a 24-hour trading volume of $42.9 billion.

Source: CoinStats

For altcoins like Stellar, DigiByte, and BitTorrent such has been the case and an immediate recovery looks unlikely given the current market conditions.

Stellar [XLM]

Source: XLM/USD, TradingView

Stellar’s price fell by over 15 percent in the past week and currently trades at $0.41. According to CoinMarketCap’s list, the coin has a market capitalization of over $9.3 billion and occupies the 10th spot. The coin’s price has tested the support at $0.37 in the past few days and is now making slight gains towards its immediate resistance at $0.54. If the present support would fail, XLM may even drop down towards the second support at $0.27.

The Bollinger Bands for the coin have contracted and show less volatility in the coin’s price action. The RSI indicator looks bearish at the moment as it heads closer to the oversold zone.

BitTorrent [BTT]

Source: BTT/USD, TradingView

BitTorrent’s price fell by over 28 percent in the past 7 days and is currently valued at $0.0011. The bearish pressure is visible as the coin’s price plummeted by over 8 percent in a day’s time. The coin is currently testing its support level around its current trading price and if this support fails BTT is likely to undo all its recent gains and trade around the $0.0004 price range. There is significant resistance around the $0.0014 range if an uptrend were to occur.

The RSI indicator for the coin is falling steadily as it heads into the oversold zone. Interestingly, the EMA ribbons have settled below the coin’s trading price and are offering support for the coin.

DigiByte [DGB]

Source: DGB/USD, TradingView

DigiByte is currently trading at $0.051 and has a market cap of over $730 million. In the past week, the coin’s price fell by 33.6 percent and currently finds itself close to the support level at $0.049. If the downtrend were to continue there is another support around the $0.035 price level that could help stabilize the coin’s price.

The MACD indicator and the RSI signal increased bearish pressure for DGB. The MACD indicator has undergone a bearish crossover while the RSI continues to move into the oversold zone.


Sign Up For Our Newsletter


Source: https://ambcrypto.com/stellar-bittorrent-digibyte-price-analysis-28-february

Continue Reading
Blockchain3 days ago

Gemini collaborates with The Giving Block and others, adds donations option

Blockchain4 days ago

Optimized Ethereum Mining Settings for Nvidia RTX 3060 Ti, RTX 3070, RTX 3080 and RTX 3090 GPUs

Blockchain2 days ago

NextGen Blockchain Platforms Self-Organize to Win Government Contracts

Blockchain5 days ago

Elon Musk Reacts to Tesla Losing $15 Billion After Investing in Bitcoin

Blockchain4 days ago

Crypto Lending Explained 2021

Blockchain5 days ago

XRP, Basic Attention Token, Compound Price Analysis: 23 February

Blockchain4 days ago

Trailing Take Profit Explained

Blockchain4 days ago

Traditional Banks get serious about enabling crypto-related services

Blockchain2 days ago

Crypto Investment Fund to Sell $750M in Bitcoin for Cardano and Polkadot

Blockchain5 days ago

Kraken Reacts to Market Selloff

Blockchain4 days ago

BitMEX adding six new perpetual contacts: ADA, DOT, EOS, YFI, UNI, and XLM

Blockchain3 days ago

What Coinbase Going Public Could Do For Crypto

Blockchain4 days ago

World’s First Bitcoin ETF Records Stellar Growth, AUM Crosses Half A Billion Dollars

Blockchain4 days ago

All of the Federal Reserve’s wire and ACH systems are down

Blockchain4 days ago

Traders remain bullish even as DeFi’s TVL falls to $54.4 billion

Blockchain5 days ago

MicroStrategy’s Michael Saylor: Billions will choose Bitcoin for life savings

Blockchain5 days ago

DeFi Orion Protocol Launches Staking Calculator

Blockchain4 days ago

MicroStrategy Completes Another $1 Billion Bitcoin Buy

Blockchain4 days ago

ZelaaPayAE deploys Pundi X’s merchant crypto payment solutions for UAE

Blockchain4 days ago

Sam Bankman-Fried: The crypto whale who wants to give billions away

Trending