A crypto backed loan is a way for traders to receive liquid funds without selling their cryptocurrency. Instead, they use their digital assets as collateral for a cash or stablecoin loan.

Individuals may choose to take out a crypto loan instead of selling because they expect their crypto asset’s value to increase or because they want to hold the asset long enough to avoid short-term capital gains crypto tax rates.

Crypto loans are available through a crypto lending platform, as described above. Essentially a crypto loan allows you to borrow against crypto. To get a crypto asset loan, you’ll need to own one of the cryptocurrencies accepted by the crypto lending platform you select. So first, check with the crypto lending platform regarding which coins they’ll accept, as that’s an essential part of finding the best crypto loans for your purposes.

Each crypto lending platform will have a unique application process, so it’s important to do your research before applying to make sure you’ll qualify in your region. Like any loan, the fine print matters, so take the time to read the terms and conditions.

Once you’re confident you’ve chosen the right crypto lending platform, start an account and begin the application process. You’ll need to verify your crypto holdings and your identity. From here you’ll choose the type of crypto loan you want and the loan-to-value (LTV) you’re interested in, as well as payment terms.

Why you should get crypto loan from our company:

There are a number of benefits to our company’s crypto loans, this includes,

1. Low interest rates, often below 10%.
2. Typically no credit check.
3. Fast funding, even within hour.
4. Security.
5. Reputation.
6. Supported Cryptocurrency.
7. 24 hours Customer Support.

* Our Crypto loans, when properly handled, can be a quick and safe way for crypto holders to access additional funds by borrowing against their existing crypto holdings.

Crypto backed loans give crypto holders access to capital without having to sell their crypto, which can be advantageous for tax and other purposes when used responsibly as part of a broader crypto strategy.

What are the risks involved in crypto loans?

Finding the best crypto loans for your purposes begins with understanding the risks involved. Unlike assets held in traditional financial institutions, crypto accounts are not covered by the FDIC.

Consequently, there is no federal insurance on any crypto asset in the event an exchange fails. With this in mind, there are three primary types of risk inherent in crypto loans.

Technical risk

As in all cryptocurrency trading, there is a risk that protocols break down because of a technical problem or hacking. This risk is somewhat higher in non-custodial loans since all DeFi activity is completely algorithmically governed.

Counterparty risk

The FDIC requires all traditional banks to maintain a certain level of liquidity; crypto loan providers are not subject to this requirement. If the market crashes, an unexpectedly large number of clients default on their loans, or if a platform breaks or is exploited, the crypto lending platform may find itself without the liquidity to return a borrower’s collateral.

Margin calls and forced liquidations

To prevent illiquidity during market downturns, lending platforms will issue margin calls or force liquidations. If a cryptocurrency’s value drops to a point where many borrowers’ LTVs are too high for the platform to maintain, the platform will inform borrowers that they must increase the value of their collateral or risk liquidation.

If the call is not met, the platform may liquidate enough of the collateral to bring an account’s LTV back to the maximum allowed ratio. In this case, a trader will have forfeited that portion of their deposit, will have incurred capital gains or losses, and may be charged transaction and broker fees