TL;DR
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Bitget has just released the ‘Crypto Loan Programwhich takes into account your crypto holdings, and then, based on their own historical data, they calculate the Loan to Value ratio (LTV) (the maximum a user can get a loan for, based on their current crypto holdings).
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The goal here for users is to put your money into something higher than the interest rate.
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From Bitget’s perspective, they make money every time a trade is made, so they win anyway – in fact they win double – more trades are made on the platform, And they keep the interest.
Full story
Initially the last press release of centralized exchange (CEX), Bitget, seems a bit confusing.
Get a loan to invest in crypto, with your own crypto as collateral??
But Kevin the intern looked into it further, and it’s actually pretty smart.
This is how it works:
Bitget is the largest CEX in the world.
Being the biggest means you have some nice data to work with.
They just got the’Crypto Loan Programwhich takes into account your crypto holdings, and then, based on their own historical data, they calculate the “Loan to Value” (LTV) ratio.
(The maximum a user can get a loan for, based on their current crypto holdings).
Then users can access that money in an instant to invest in other crypto projects through Bitget.
As with all loans, there is an interest rate that comes with it.
So the goal here for users is to put your money into something higher than the interest rate.
From Bitget’s perspective, they make money every time a trade is made, so they win anyway – in fact they win double – more trades are made on the platform, And they keep the interest.
This is our opinion:
We are not professional investors and do not provide professional investment advice…
In a bull market, this can be extra lucrative for everyone.
In a bear market, this seems like it could be dangerous for investors, with no real downside to the platform.
This is an interesting concept and we are all for new lending models (provided they are secure).
Just make sure you have DYOR before you jump in here!