Comment
Author: Admin | 2025-04-28
Before any funds will be returned. While it would be nice to say that crypto lending is safer now than it was it 2022, the reality is that not much has changed.2. Crypto Margin LendingAnother way to improve the yield from Bitcoin and other crypto coins has emerged as a result of cryptocurrency exchanges offering leveraged trading to their clients.When a trader uses leverage, they essentially use their assets, crypto or fiat, to take out a loan which enables them to leverage trade with more money than they have. Crypto exchanges offering leverage trading include BitMEX,DERIBIT, Binance and BTSE – with anything from 5x to 100x leverage being offered. Of course, all the normal trading risks are associated with leveraged trading.For investors looking for a more reliable yield with less downside risk, lending to these leveraged traders is an option offered by several exchanges. Because of the amount of capital required to offer margin lending services, these loans can be offered by individuals through the exchange, rather than by the exchange. Exchanges offering this type of crypto margin lending service include Poloniex, Bitfinex and dYdX. Check here for a full list of exchanges and their leveraged trading offers.In simple terms, it works like this. If a trader has US$1,000 and wants to trade with 5x leverage, they use their $1,000 as collateral for a $4,000 loan through their exchange which has an interest rate attached. This interest is typically charged daily, although this varies per exchange, and the rate at which the capital is loaned fluctuates according to supply and demand.Averaged over a year these loans will typically produce a yield anywhere from 7% to 15%. Because margin lending usually occurs over the course of a day, the investor gets daily compounding interest. At a rate of 0.03% per day
Add Comment