Bitcoin lending platforms are on the rise for both lenders and borrowers for a good reason, these portals help both investors and borrowers take advantage of the exciting cryptocurrecny market. Lenders (investors) get to participate in exciting enterprises both personal and commercial through lending their bitcoin, and borrowers are able to gain larger profits through leveraging the investments of their lenders making money for both themselves and their lenders.
In this article, we will cover the 2 major types of bitcoin lending which are 1) investment or trading companies to which loans can be made and 2) Peer-to-Peer (P2P) lending platforms.
ThornCoin is a new lending platform that seems to be doing everything right.
Learn more about CHRYSOS here. More on this lending platform soon.
Learn about LibraCoin here. More on this lending platform soon.
Learn about IdeaCoin here. More on this lending platform soon.
Learn about FalcolnCoin here. More on this lending platform soon.
Learn about BitAI Here. More on this lending platform soon.
Master Coin Plus is a company that executes strategic trades on a variety of cryptocurrencies including bitcoin and 900+ other alt coins on a daily basis across 45 different crypto currency exchanges. Their lending platform allows you to lend bitcoin to them and reap the rewards of their company growth. At the time of this writing, MC+ has 3 revenue generating activities.
- Trading by both bots and traders across many different crypto currency exchanges
- They mine for crypto currencies
- They own Bitcoin ATMs on which they make transaction fees
Obviously, the more money that MC+ has to expand their business in these three ways, the more money they make. Because of this, they have created an opportunity for others to get involved through lending them bitcoin. They does this by means of what they call “packages” which offer different levels of entry and payouts.
Members get access to plans that last about 240 days. These plans require commitment and involve a 120-day cycle. Depending on the amount of bitcoin you are willing to invest and want to obtain in return, there is a corresponding package deal to suit your risk appetite. Personally, I went with a .0625 bitcoin package to test the waters. So far, I have been very pleased. As I write this, I am on Day 53 of my investment and so far I have made 0.02761300 which is a 44% return and which is an average of about .08% per day.
Master Coin Plus is an invite only platform, and only those referred by existing members can participate in the program. I have been given some invitations to give out to my readers, so that you can participate in this lending program. Simply use this link to get started.
Please note that Master Coin Plus is not an exchange and therefore you cannot buy or sell your bitcoin inside of the platform. You will need to transfer bitcoin to your MC+ bitcoin wallet in order to do the loan. I recommend CoinBase for those who are just getting started with Bitcoin. From there, you can transfer bitcoin to your MC+ wallet and do your lend.
I have been watching USI-TECH for a little while now since my friend told me about them. They have introduced trading software capable of handling market volatility during automated trade executions that are suited to the level of risk of their users. Their platform seems to take cryptocurrency investments to whole new level of innovation based on their FOREX experience.
What’s great about this platform is how earning revenues are made simplified and automated especially for small to medium investors. The program does not require expertise on the user’s end and users are kept in control when withdrawals would take place. See the business opportunity you can find here.
USI TECH introduced an alternative solution to engage in the FOREX and cryptocurrency market. Instead of dealing with the steep learning curves that are required to navigate through the market, you can access the product of highly skilled and experienced experts to aid your trades through USI-TECH. While risks will always be part of any investment opportunity, especially given the nature of how volatile bitcoin markets could be, using USI TECH software enables you to dramatically minimize such risks and make room for maximized profit gains.
They continually refine their software to keep up with the market changes and help users remain at a competitive advantage when it comes to their investments.
Update: USI-Tech has ceased its operations in the US and Canada though it continues to operate fairly normally for those outside of North America. It remains to be seen whether those in North America with investments in USI-Tech will have their funds released or not.
Conclusion on Lending Platforms
These bitcoin lending platforms are some of the most interesting vehicles for investing that I’ve ever seen. They are incredibly risky, but they offer ridiculous returns for as long as they last if they ever actually get off the ground.
A month ago I didn’t know about Bitcoin but after knowing about it, I decided to give it a shot and you can check out my story and my progress here.
Defunct Lending Platforms
NOTE: Bitconnect has discontinued its lending as of January 16, 2018. As a result, you can no longer lend with Bitconnect.
Bitconnect is another lending platform but with a twist. They have actually developed their own cryptocurrency called Bitconnect Coin (BCC) or Bitconnect Tokens and it has gained quite a bit of market momentum. In fact, their coin is regularly among the top 25 coins in terms of market camp according to coinmarketcap.com. Unlike bitcoin that has a projected fixed number of 21 million coins by year 2140, BCC will reach a fixed number of 28 million coins.
Bitconnect makes its money through its volatility trading bot which trades on the volatility of bitcoin and on exchange fees. The more money they have to trade with, the more they can make, so they allow others to lend creating a win-win scenario. The steps for lending are simple:
- To get started lending, you will need to acquire some bitcoin through an exchange like CoinBase.
- Next, you will need to sign up for a bitconnect account which you can do here.
- Next, you will need to transfer your bitcoin to your bitcoin wallet on bitconnect
- From there, you can exchange your bitcoin for bitconnect coin which you can then lend to the platform
On average, they have paid out approximately .9% per day. Of course, this is not guaranteed.
You can see the most updated version of these projected and actual earnings for 5 days here. As you can see, some days it is far lower than .9% and other days it is significantly higher.
The duration of the loans are based on the amount that is lent which you can see in the graph below. $100 is the minimum lending amount and capital will be tied up for 299 days. The more that is lent, the quicker the initial capital is released. Also, as you can see, lends that are greater than $1010 are accompanied by an extra bonus percent that is paid out daily.
Perhaps the most interesting and exciting thing about bitconnect is that they have daily payouts and that those daily payouts can be reinvested each day which allows interest to compound quickly. In contrast to the $100 minimum to get started, the reinvest amount is a minimum of $10. This means that if one was to loan $1010, he would get an average daily payout of $10 which could then be reinvested. This reinvestment component makes the bitconnect quite lucrative.
When I first got started, I started with $500 worth of bitcoin that I exchanged for bitconnect coin which I then lended to the platform. Within 3 weeks, I had made about $120, so I decided to do a $10,010 loan in order to take advantage of the .25% daily bonus and the shorter lending duration. You can read more about my progress in my monthly updates here.
Bitconnect is a pretty incredible platform which is why it’s made this list of lending platforms that can help you earn money with bitcoin.
Update: Since Bitconnect has shut down, I have moved the remaining coin value that I had into other lending platforms. As I write this update, BCC is < $3 per coin and is scheduled to be removed from both coinexchange.io and hitBTC. Interestingly, some of the largest promoters of the platform on YouTube such as CryptoNick, Craig Grant, Roy Murphy, and Ryan Hildreth, have taken down most or all of their videos.
DavorCoin was “the next bitconnect” and was touted hugely by many YouTube crypto experts and affiliate marketers. The coin had a meteoric rise from their ICO up to over $90 USD within just 90 days. As of February 7th, 2018, Davor has announced that they are stopping their lending.
LoopX (http://loopx.io) was another lending platform that said all of the right things. As of February 11th, they have apparently “exit scammed” as their website is taken down along with their social media pages despite corresponding with some users as late as Feb 9th saying that they could purchase additional tokens.
Now let me be honest here. I have not yet explored much of the P2P world, but they are definitely intriguing. What follows is a basic description of what P2P lending platforms are, how they work, the pros and cons, and the things you should watch out for. I hope to update this article over the next few months as I explore these methods of lending.
Investors can earn steady revenue depending on the platform they have chosen, and they can do this through selecting loan applications that offer profitable interest rates. There are verification measures in place to vet borrowers allowed to use the portal to minimize account default.
Bitcoin loans are quick and easy for borrowers and profitable for investors aiming to diversify their portfolios. Bitcoin lending is a lucrative business especially for lenders with the right mindset and risk appetite. While peer to peer BTC lending has some set inherent risks like traditional P2P, lenders are not left without without any security.
Borrowers entering such platforms are generally screened through the P2P software’s algorithm in place. Furthermore, lenders may manually search for borrowers in need of funding and place bids on their loan applications so that lenders are in full control of their lending decisions. This process enables lenders to screen loan applications according to their investment criteria and within their level of risk tolerance.
Why Peer to Peer loans? Well…
Bitcoin Lending Offers Alternative Means of Diversification
Conventional peer to peer lenders in the past could only tap a market of borrowers located within a specific region. This limits their choice of demographics and exposes them only to current market conditions in the region or country. Whether the economic cycle is in favor with the lending business or not, the lender has no choice but to manage their portfolio through whatever economic cycle they are in.
As an example, the recent 2007-2008 recession that occurred in the United States led to several business opportunities lost. Lenders in the private sector had little opportunity to financially grow in such limited market conditions beyond their control. However, if lenders had access to borrowers from another side of the world where the economy was not on its downturn, imagine the level of return on investments they could reap.
Because not every country out there experiences economic downturns at the same time, BTC lenders could connect with borrowers living in regions where there is a boom in market growth. Borrowers could use bitcoin to fund other exchanges that would generate those profits. This makes borrowing a viable financial option considering debt can be feasibly settled by the borrower.
Bitcoin loans can be created multiple times and each loan may contain a small portion of the lender’s capital. This enables them to diversify risks on their portfolio through reaching out to a global market. BTC lenders not only gain revenue and reduce risks; they could potentially contribute to the financial success of their borrowers.
Access Multiple Levels of Bitcoin Loan Interest Rates
Compared to traditional P2P lending platforms, cryptocurrency lending generally enjoys higher level of interest rates on an international scale. These interest rates can be affected by local regulations on the region. However, it is noteworthy that borrowers outside UK and US regions are not new to high interest rates. Local financial institutions from developing countries have conditioned the people in the region to be accustomed to such rates.
You can expect that there are still borrowers from different parts of the world willing to accept BTC loan offers that would otherwise convince borrowers in your area to be averse. BTC lenders experienced a substantial and constant rate of month return on investments on these bitcoin loaning platforms.
Where else could borrowers in need of BTC funding reach out to willing lenders aside from these platforms? And the conveniences these bitcoin loans bring provide value to any BTC lender’s investment. Both parties can manually or automatically locate one another and do business.
Low Transaction Fees with Bitcoin Loans
Investors and borrowers no longer need to undergo conventional checks put up by financial institutions. An advantage of cryptocurrency lending platforms is the level of freedom participants have over their transactions. No common third party institutions such as governments or banks that can keep tabs on the transaction. Participants have the privacy and convenience of bitcoin exchanges through these platforms.
Traditional P2P lending transactions have involved wire transfer and currency conversions as part of the process. This adds to the financial costs lenders and borrowers have to deal with. This reduces the amount of profit lenders can reap and increases the costs borrowers should pay to settle their debt. Furthermore, wire transfers need to undergo clearing times which take up to several days to process.
During the clearing period, opportunity costs can happen for both borrowers and lenders. However, in a BTC loaning platform, transactions can be accomplished in a matter of seconds. There is no clearing time or conversion rates that add to the financial costs and wait for both parties. Borrowers could access capital for funding their projects or cryptocurrency exchanges in an instant.
BTC loan platforms do take a small amount of fees to keep their operations running. However, most of the profits are always directed to the investors which make it a decent revenue generating avenue.
Additional Cyber Security
BTC lenders are common preys for cyber crimes. Because the value of bitcoin continually reaches new highs over the past months, it is understandable that hackers are more motivated to search for security leaks to access a lender’s BTC wallet. BTC loaning environments are created with digital security as always one of the top priorities of the platform. This is a better alternative than engaging in individual private bitcoin loaning which leaves an investor open for unnecessary level of risks.
If security breaches do occur, just like what happened to Loanbase, lenders could be compensated for the loss by the company depending on company policy agreed upon. You do not have this level of assurance when choosing to lend Bitcoin privately.
BTC Lenders can Tap into Markets That even Financial Institutions Denied
A large percentage of the adult population has little to no access to financial instruments commonly provided by financial institutions. This study claims about 39% of adults are unbanked. So what does this mean for cryptocurrency lenders worldwide? To simplify the process, an adult who has no access to the benefits of a financial institution and is in need of financing can access the cryptocurrency loaning platforms. After all, you only need a reliable internet connection and bitcoin wallet to get started with the transactions.
In some instances, financial institutions have denied financing to these borrowers which made them resort to BTC loans for aid. A lender, depending on their risk appetite and their borrower selection criteria, may accommodate the hypothetical borrower. The loan may turn out to be a profitable investment which is often the case.
Peer to Peer Portals That Offer Bitloans
These companies facilitate an exchange platform between BTC lenders to Bitcoin borrowers. While the main purpose of the portal is for lenders to fund and borrowers to receive funding, other services on these platforms can include buying and selling bitcoin and exchanging cryptocurrencies. Unlike the regular banking system, lenders and borrowers can directly make the transaction without the lengthy clearing times. Furthermore, borrowers would not be deterred at applying for bitcoin loans as interest rates are lower compared to loans offered by banks. A small amount of service fee is usually charged by the portal per transaction.
Once an investor is admitted to the platform, they can browses through a list of loan applications made by borrowers. These loan applications contain the amount of BTC and interest rates borrowers are willing to borrow. Lenders may start bidding on the offer after exercising their due diligence; complete the transaction in an instant. These portals take advantage or the convenience, and decentralized power of block chain technology. Here’s more info on P2P banking.
Bitbond is known best as the first international platform that caters to small business loans. Based in Berlin, Germany, this licensed and regulated financial institution has provided an avenue for investors and borrowers from all over the world a way to financial growth. Through the power of block chain technology, this P2P portal facilitates connections between lenders and worthy borrowers. Investors can either manually find loan offers that meet their criteria or automatically filter through the list of loan applications using software, usually provided by the portal.
It features an AutoInvest tool which automatically seeks out loan applications that fit into the criteria the lender has set. This eliminates the need for manual searches and ensures the borrowers profile chosen are within the parameters set by the bitcoin investor.
Borrowers are usually not in financial inclusion by their local conventional credit bureaus, thus, no standard credit scoring could be drawn out to assess the risks. However, Bitbond has provided a solution through analysis of certain parameters that can gauge the borrower’s ability to pay back the bitcoin loan.
Consent is provided by the borrowers for Bitbond to review their track records from a variety of eCommerce-based sites. However, bank history and social media accounts may also be reviewed to better understand the borrower’s profile. Through the portals propriety software algorithms, data is collected, analyzed, and evaluated to determine whether admission to the platform does not pose heavy risks for investors. These strict guidelines are all necessary to protect a lender’s best interests.
BTCPOP is another P2P banking platform that makes it possible for bitcoin investors to provide bitcoin loans for borrowers in a secure portal. With the power of block chain technology, a secure digital portal to facilitate transactions, reliable risk assessment measures, and high priority for their investor’s best interests, it is no wonder this platform has become a success over the recent years with it multiple avenues for earning.
One of the services BTCPOP is known for is its P2P bitcoin loaning programs. Investors are not only exposed to high returns from interest rates but also have access to other BTC investment pools that can grow their wealth. In this portal, investors have the freedom to choose between different investment pools that have corresponding risks and return levels. It also features collateral tied loans to protect lenders from losing principal costs in cases of borrower defaults.
Beyond accepting loan offers and applying for loans, all participants can also engage in ALTcoin trades the site. BTCPOP refers to their service as a bank. They do not involve third party services in the platform. With BTCPOP, you no longer have to deal with the disadvantages bank processing and unsafe loaning portals.
Of course there are risks with peer-to-peer lending, but there are risks with any investment.
Conclusion – Lending to Platforms vs Peer-to-Peer
Obviously, if you came to this post looking to get a loan, the P2P model is the only one that I know of, and hopefully you found that section helpful. However, if you are looking to make money with bitcoin, then I would start with the lending programs that I mentioned above. In my opinion, they are less risky than the P2P loans which is why I have personally invested in them first and why I haven’t gotten to P2P loans yet.
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