Crypto Lenders

 Crypto Lenders

    Another popular trend that is appearing in crypto right now are crypto lenders. These are companies that will pay you a certain amount of interest (APY) in order for you to let them borrow your crypto or US dollars so they can lend it out at a higher rate. In traditional banks they pay you less than 1% APY on your savings accounts to let them hold on to your hard earned money which is laughable. For example there is a company called Celsius that at this exact moment if you were to lend them your US dollars they would pay you 10.02% APY just for letting your dollars sit in their account. You can withdraw it at anytime and you get one withdraw per month of any amount for free. If you have $10,000 in there they will pay you $1000 a year paid out weekly. 

    The reason they are able to afford to pay out these high interest rates is because they charge more to lend it out vs them paying you to borrow yours. When they lend out money they also ask for a collateral from the borrowers which makes your money safe. You also don't just get interest on your dollars you can also get it on your crypto. You can store your Bitcoin and get 6.20% APY paid in Bitcoin. Ethereum you get 5.35% APY and there are so may others. The point I am trying to make is there are ways where you can make your money grow without actually even holding crypto you can do it with your US dollars. That is because before banks did not have competition to pay higher rates but with these new emerging crypto lenders banks are going to lose billions of dollars if they don't raise their rates to match these new technologies. I don't doubt it if in the future these types of borrowers will somehow get into the real estate market to provide loans for people to purchase homes at lower rates. 

Comments

  1. UnknownNovember 12, 2021 at 2:16 PM

    Crypto lenders seems like a good investment if you are into bitcoin or other cryptocurrencies. Is there any downside to letting a company borrow your money like Celsius? If the company were to breakdown are they guaranteed to give your money back?

    -Shawn

    ReplyDelete

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