Cryptocurrency loans land on Bitfinex
The platform Bitfinex now offers the possibility to its users to contract cryptocurrency loans. This service is offered via Bitfinex Borrow, a P2P platform that allows users to borrow funds from other people using their cryptocurrencies or fiat currencies as collateral.
Access to Bitfinex Borrow is restricted to users whose identity has been verified. The higher the verification level, the greater the borrowing options.
There are many available cryptocurrencies, here is the list:
- Bitcoin (BTC)
- Ether (ETH)
- Tether (USDT)
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- Litecoin (LTC)
- Polkadot (DOT)
- XRP
- EOS
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For the main cryptocurrency, namely BTC, borrowers can deposit US dollars, euros, Japanese yen and even US dollars as collateral. Tether (USDT). For an ETH loan, only the US dollar is currently accepted as collateral.
Regarding loan-to-value ratios, borrowers will be able to obtain loans in BTC corresponding to maximum 80% of the value of their dollar holdings, euros or USDT. For the yen, the loan-to-value ratio will not exceed 70%. As for Ethers loans, the percentage may reach up to 80% of funds deposited as collateral.
The annual percentage rate of charge (APR) for loans is particularly attractive and more advantageous than on other platforms. Bitfinex charges an annual interest rate of approximately 3.75% for BTC loans and about 1.22% for those in ETH.
The most advantageous rates are charged on DOT and EOS loans, these being only 0.1% and 0.01% at the time of writing, respectively.
Discover Bitfinex
How does the Bitfinex Borrow interface look?
For its new service, Bitfinex has made things as easy as possible. For example, let’s simulate the loan of 0.25 BTC on the platform.
On the screenshot below, Bitfinex tells me that I must first deposit 5 488 euros to borrow 0.25 BTC. A loan can be taken out on a period of 2 to 120 days.
For a 50-day loan, the daily interest rate here is 0,010270 %. I should therefore reimburse the equivalent of 0.25128 BTC to the futures platform.
With Bitfinex Borrow, you can choose between a variable rate or a fixed rate loan. The interest charged for a variable rate loan changes throughout the life of the loan. This fluctuates according to supply and demand. The interest charged for a fixed rate loan is fixed for the entire term of the loan, and is not subject to any variation.
If you are interested in Bitfinex lending service, carefully read its terms of use beforehand. Note also that this does not fit in the box of the decentralized finance (DeFi), Bitfinex being a fully centralized platform.
???? On the same theme – Aave (AAVE), non-custodial cryptocurrency loan protocol
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About the Author : Clement Wardzala
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Editor-in-chief of Cryptoast, I discovered Bitcoin and blockchain technology in 2017. Since then, I have endeavored to share qualitative content so that the sector is democratized to everyone.
All articles by Clément Wardzala.
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