Why lend crypto?
The obvious answer is to generate a passive income by lending your crypto assets out at competitive interest rates and earning interest on your holdings. Compared to traditional asset classes, lending crypto can be very profitable.
This guide will walk you through the top 5 platforms that allow you to lend your cryptocurrencies in exchange for an interest rate.
As well as briefly outlining the benefits of each platform, some of which include earning up to 6% APY on USDT and TUSD, or a 12% APY on DAI.
By lending crypto, investors can access high-interest rates and offer their funds for short-term loans. The platforms in this guide allow users to lend their coins for fixed terms or flexible terms.
Poloniex, which is owned by financial services provider Circle, offers a variety of crypto lending products. If you’re interested in earning interest on your crypto holdings, Poloniex enables you to do just that.
Currently, the platform allows users to lend Bitcoin (BTC), Ethereum (ETH), Tether (USDT), Chainlink (LINK) and 5 other cryptocurrencies. Interest rates for crypto lending are set by traders and vary from 0.02% to 2.15%. The exact interest rate for each cryptocurrency will be clearly stated before you finalize your deposit. Once you’ve made your deposit, it will automatically be loaned out to traders who want to use leverage on their positions. You won’t need to take any further action after that — the platform is completely automated and requires no user input other than clicking a couple buttons in order to get started.
In addition to being able to earn interest on your crypto assets, Poloniex also has a mobile app so that you can keep an eye on how things are going while you’re away from the computer or during your commute back home from work. This gives you easy access to track all of your deposits, withdrawals and revenue streams while enabling 24/7 customer support if anything goes wrong.
BlockFi is a crypto lending platform that allows you to earn interest through crypto deposits.
The platform has plenty of benefits for its users:
- It is one of the few bitcoin and crypto lending platforms that are fully licensed, regulated, and compliant with regulations in the US.
- BlockFi automatically insures all client funds held on the platform. This means that if something were to happen to BlockFi’s operations, your funds would be safe and insured up to $100 million.
- BlockFi has high trust scores – they have never experienced a security breach, nor been hacked. Unlike centralized exchanges like Binance or Gemini, depositing money on BlockFi ensures that your funds are safe and secure by their off-chain storage systems. They also regularly undergo third party audits of their finances which can be viewed here: https://www.blockfi.com/financials/.
- The user experience on the website is very simple and intuitive to use – there aren’t any complex steps required in order to set up an account or deposit money into it.
As you may know, Nexo is a crypto lending platform that connects lenders and borrowers who want to borrow and lend digital assets. Our goal is to make borrowing less intimidating for beginners, who might otherwise feel awkward asking friends or family to lend them money while they’re still getting their feet wet in the crypto-space.
We do this by simplifying everything as much as possible. There’s no need to submit paperwork or undergo onboarding, because borrowing is quick and simple: just upload your ID and proof of address. All you need to do is get approved! In the event that someone doesn’t respond after an hour or two has passed, the loan can be automatically withdrawn from the borrower’s profile, essentially locking it away until they resolve their payment issues (in other words, if a loan gets locked away but there’s no activity on either side in that time frame).
Nexo looks very different from most traditional lending platforms like Zopa or Lending Club because we use blockchain technology to automate many of our processes. We don’t require any paperwork during the application process—instead of filling out lengthy forms with personal information, applicants simply upload a scanned document with basic contact details (e.g., name and address) by using our mobile app or email interface. And when borrowers apply for loans using Nexo instead of traditional channels like credit cards or banks, they can take advantage of some nifty features that make life easier:
- Security: To avoid frauds at all costs, we manually review every single application before approving it. We then lock down any suspicious loans taken out against legitimate accounts within 24 hours of them being accepted so they can’t be used fraudulently even if they are paid back in full later on—this means orders are 100% secure from hackers due to manual verification
Binance is the world’s largest cryptocurrency exchange by trading volume and has its own lending platform you can use.
Binance offers just a few different options for lending your crypto assets, but it also offers a stable return on investment compared to other platforms. The Binance lending program currently allows users to lend their Bitcoins (BTC), Ethereum Classic (ETC) or Tether (USDT). Each asset comes with its own annual percentage yield and term length. The shortest term length is 14 days while the longest term length is 365 days, so you can pick what works best for you.
Celsius Network is a new platform that allows users to earn interest on their crypto holdings. The platform also allows users to get a USD loan using their crypto as collateral. The platform currently supports Bitcoin, Ether, Litecoin, Ripple, and other cryptocurrencies.
Users can earn an annual interest rate of up to 10% on the cryptocurrency stored in Celsius Network wallets, depending upon the coin held. According to the company’s website, the more coins you hold, the higher interest rates you will receive.
Lending Crypto Is Profitable For Crypto Investors
A common belief around cryptocurrency is that it’s always a good investment. In fact, many financial experts say that the most important thing about buying Bitcoin is buying and holding. It is a good idea to hold on to your crypto, but are there other ways to make money? Lending crypto can be just as profitable as buying and holding.
Crypto lending is the best way to maximize the return on your digital assets. Since cryptocurrencies are only bought and sold in one direction, lending allows you access to an alternative source of profit. By lending out your coins, you can earn interest (just like a savings account at a bank). The process of getting started with this method of earning money is easy and straightforward.