Do you have a lot of bitcoin in your wallet, and are you thinking of selling your coins to solve a need or invest in your business? I’ve got good news for you.

When you need liquidity, there’s no need to sell your coins; Crypto loans are a better option, and I will show you exactly why. Recently, crypto loans have become more and more common.

These forms of loans make the procedure of borrowing capital much simpler than standard approaches.

The notion of crypto loans sounds dangerous for certain individuals and as if it’s too good to be real.

We want these concerns to be dispelled and let you know that crypto loans live up to the hype.

Reasons for a crypto loan:

To Invest in your business.

The most obvious reason for considering a small business loan is probably to invest in an opportunity for your company to expand. Continuing to grow your company when business is booming can help ensure that your profits do not plateau or shrink.

To avoid selling your crypto.

Some of us have spent years of labor and expertise gathering crypto, and you wouldn’t want to sell them off just because you are in dare need of cash.

Why sell when you can borrow?

If you believe in the long-term growth of your crypto, you should know that investing against it is more valuable than selling it. Because without abandoning your investments and their ability to rise in interest, you will access the value of your investment.

Meanwhile, Crypto loan interest rates are so tiny that individuals are stunned! Imagine where you’re getting cash and remain the owner of your coins. That is to say; your coins become the loan collateral. That is possible because of the Blockchain business model.

Why Crypto loans?

They are readily available.

If you have ever applied for a standard loan, you should probably know how long the procedure takes. Your credit report would be a big factor in deciding how much money you are eligible to borrow for regular loans.

If you have a poor credit score, likely, you will not get the funds you need. Some more variables are going to be taken into accounts, such as wages and credit records.

Crypto loans are readily available to whosoever that have crypto. Irrespective of their wages and credit scores. With applications like Smart credit, you can get real finance for your needs.

No need for fixed asset collaterals

Your crypto income is enough to obtain a crypto loan. No need for a house, land, or any fixed asset anywhere to serve as your collateral. Smartcredit needs your Bitcoin, Etherum, etc., as collateral to get you real cash.

Instant fund transfer

Some regular loan firms make you wait weeks. While some banks are accelerating their processes, many are still not. If you need a loan as soon as possible, Crypto Lending is a better choice.

In Crypto lending, within a short time, several platforms like Smartcredit will accept the loan. No hassles, just your Crypto and ID. As soon as you are approved, Crypto loans are converted, so you can quickly satisfy your real financial needs.

Save your tax

Most countries don’t tax your digital currencies. Hence you can lend or borrow crypto in smart credit without worrying about taxes. Meanwhile, if you chose to sell them, the likes of a DEX can tax you.

Multiplying Your Crypto

Here is what many crypto income owners don’t know. Now that the crypto market is rapidly growing, especially Bitcoin. You can use your Bitcoin to get loaned in US Dollars at very low interest. Buy more Bitcoin using that cash. When the price increases, you make extra gains. You can replicate that again and again.

You can earn interest too.

Smart credit financial services can lend out your liquidity. The crypto fixed income system, allows you to earn interests by funding a crypto loan. Meanwhile, Crypto market interests are usually higher than bank interests.

Final Thoughts

You’ve seen why getting a crypto loan is better than just selling your crypto and eating up the profits.

Finally, Crypto loans are a stable, reliable, and quick alternative to conventional bank loans.

But be sure to consider selecting a trusted crypto lending platform for your crypto loan needs.

The cryptocurrency market is growing rapidly, with the largest cryptos in particular having spent much of the summer and fall rallying. According to an article on CoinDesk, the crypto market cap has surged to a record $2.7 trillion, tripling the $770 billion cap from the beginning of the year. Bitcoin (BTC) recently reached a fresh all-time high of $66,000, while Ethereum (ETH) climbed to a five-month high of more than $4,200.

All of this is leading corporations of all kinds to invest in cryptocurrencies on the simple grounds that the cryptos have outperformed traditional assets and varying indices. In our article ‘The Ultimate Beginner’s Guide to Investing and Trading Bitcoin and Cryptocurrencies’, we discussed how investing in cryptocurrency can lead to significant gains.

CRYPTO VS. STOCKS

Both cryptocurrencies and stocks have good and bad days. For instance, as of the writing the European stock market is facing weak trading over Asia-Pacific jitters. The pan-European Stoxx 700 recently closed just below the flatline due to concerns over the Chinese property sector. These are specific examples that have affected markets of late. But more generally, market volatility, government regulations, and other sources of uncertainty can regularly lead to losses for even the most experienced and careful investors. That said, stocks also come with a long history that makes it easier for investors to recognize trends and predict future movements. Stock markets are also well regulated and widely traded, which further sets them apart from decentralized cryptocurrency assets. However, the crypto market is catching up as its capitalization increases and also regulation will be put in place. The proposed MiCA (Markets in Crypto Assets) framework of the EU is a recent example.

CRYPTO VS. BONDS

A bond is a loan from an individual to a company or a government. When an investor buys a bond, the entity that sold the bond is in debt to that person. For a certain period of time, the investor will get interest (like say 3% p.a.) on the amount lent out, and eventually he or she will receive the entire amount in return. The only major risk with bonds is that an investor won’t receive any interest payments (or even the principal amount) if the borrower goes bankrupt or defaults for any other reason. Additionally, bonds can fail to generate returns that keep pace with inflation. The value of issued bonds often erodes when inflation rises. By contrast, cryptocurrencies are untethered to wider economic disruptions, and cannot be affected by any entity’s failure to maintain a deal – except that hackers might steal crypto left on an exchange. But in fact, crypto tends to profit from rising inflation as it is regarded a hedge against inflation. And moving your crypto to your own wallet will keep you safe.

CRYPTO VS. FOREX

Foreign exchange of global currencies (or forex) offers unmatched liquidity compared to crypto, or any other market for that matter. But value in this particular market stems from the economic conditions and fluctuations of the countries behind the currencies. This is why investors pay close attention to the changes in major currency pairs during times of high volatility. The trade volatility charts on FXCM depict what this sort of tracking looks like. They essentially depict bid and ask prices for major pairs such as the EUR/USD and USD/GBP, but do so in such a way as to highlight the pairs exhibiting the most movement. While this is a helpful way to visualize and trade forex though, the need for volatility tracking highlights a key difference between forex and cryptocurrency in and of itself. Forex traders need to seek out volatility if they’re to find much short-term potential for gains; crypto markets are extraordinarily volatile nearly all the time. That makes them less stable, but also means it’s easier for investors to spot potential opportunities for swift earnings.

CRYPTO VS. GOLD

Based on a recent gold market report from Reuters, gold prices have extended gains of late due to a softer dollar. With U.S. treasury yields pushing higher over inflation concerns, gold trading has remained in a range between $1,720 and $1,820 — making it a stable, liquid investment choice. These kinds of conditions are behind the “safe-haven asset” label that is often applied to gold. Some have begun to assign this label to cryptocurrencies as well, largely on the grounds that it they provide a “haven” during times of spurring inflation like we have been observing in fall 2021. Generally speaking though, crypto is far more volatile. The other key difference, meanwhile, is that gold is subject to import taxes and is far less portable. Investors need to spend more money protecting stashes of physical gold (even if only indirectly) than securing crypto wallets.

CONCLUSION

Overall, investing in crypto depends on your risk tolerance and portfolio objectives. If you want to diversify away from traditional investments, digital money is a good choice because it isn’t tied to a specific fiat currency, country, or financial market. That said, like any investable asset, cryptos still come with risks that need to be managed carefully. Timing the crypto market’s major ups and downs is key. This is where Crypto Captain can help you.

The practice of lending money has been and continues to be one of the driving forces behind the modern economy. Since debt first became a facilitator for trading, it has been considered a significant component in commerce and investment.

With all this clout, it didn’t take long for the practice to make its way into the crypto market. Since around 2010, the potential establishment of “bitcoin banks” has become a popular topic among numerous forums. Not too long after, people started offering P2P lending services to extract returns on their holdings. This particular space has since evolved to include a wide variety of businesses.

Crypto lending and borrowing have numerous advantages, and these advantages could attract new users. Moreover, it can help expand the ecosystem as a whole.

Attracting banks

One notable change in the crypto sector is that traditional banks may start taking an interest in the system. Rates on fiat loans are at historically low levels, which has led to banks taking note of their lending margins being squeezed. The appealing yield extends to crypto assets, and the ever-growing demand from clients for this service may be enough to convince some institutions to put aside their apprehension and start offering crypto loans and custody.

In December of 2019, the Basel Committee stated that banks could potentially start offering crypto-asset services. Furthermore, there may be a requirement for risk management regulations.

Further DeFi development

Decentralized finance (DeFi) has a huge role in the evolution of the world of finance. For example, DeFi expands the reach of money and its functionality. All a DeFi participant needs is a smartphone, so it is clear that there is potential for global economic growth. Analysts believe that this sector is one of the most significant that is undergoing development in the crypto space.

DeFi will probably continue to be a niche segment for some time. However, this could influence centralized services thanks to a creative utilization of smart contracts. The outcome could be a hybrid of sorts. It could offer centralized assurances with decentralized functionality. To top it all of, a stamp of approval of regulatory management.

Coupled with the yield differential between crypto and traditional assets are the collateral flexibility and general security. All of these factors have the power to draw in more institutional players to the space.

This will do more than boost liquidity in the sector, which in turn could support strong infrastructure expansion, cut down on volatility, and attract more investors. It could trigger asset-specific interest rates that stretch across the sector. As a result, these could add fuel to the development of brand new derivatives (ex. interest rate swaps).

Oftentimes when people need money, the last thing they consider is seeking a line of credit. However, it is a critical component when applying for a loan.

What is it?

A line of credit (LOC) is a flexible loan issued by a bank or other financial institution. Much like credit cards that offer a limited amount of funds – ones that you can use however and whenever you like – a LOC is a specific amount of money that one can access as needed. They can be repaid either immediately or over a pre-established period of time.

With loans, a line of credit typically charges interest as soon as money is borrowed. Borrowers must receive approval from the bank, with this consent being a byproduct of the borrower’s credit rating. Alternatively – or additionally – their relationship with the bank. It is important to note that the interest rate is, for the most part, variable. This makes it hard to predict what the money you are borrowing will eventually cost you.

Loans vs. LOCs

A loan and line of credit are two methods that individuals and businesses use to borrow from lenders. Loans have a non-revolving credit limit, meaning that the borrower has access only to the amount loaned once. Subsequently, they make principal and interest payments up until the debt is repaid.

A line of credit functions a little differently. The borrower receives a set credit limit – similar to a credit card – and performs regular payments consisting of both a principal and interest portion to pay it off. However, unlike a loan, the borrower has continuous and recurring access to the line of credit during its active period.

Approval for both lines of credit and loans primarily depends on a borrower’s financial history and credit rating. Moreover, their relationship with the lender is an important factor.

Revolving credit: what’s the difference?

Revolving credit and line of credit are both financing strategies. They are available to both individuals and businesses and provide borrowers with a level of flexibility. A lender brings funds – up to a specific credit limit anyway – that can be used and repaid at the borrower’s discretion. Similarities aside, revolving credit and lines of credit are quite different.

Revolving credit is an agreement allowing an account holder to borrow money again and again up to a set dollar limit. At the same time, they pay back a chunk of the current balance due in routine payments. Each payment, minus the fees and interest, restocks the available amount to the account holder.

Put simply, revolving credit remains open until the account’s closure by the borrower or lender. Contrarily, a non-revolving line of credit is a one-time arrangement. As soon as the credit line is paid off, the lender will officially close.

A few years ago, not a lot of people had heard of, let alone were knowledgeable about, decentralized finance (DeFi). It was only discussed in the crypto space, especially in relation to Bitcoin and blockchain technology. However, COVID-19 would change all that.

DeFi Pulse reported that, since May of last year, the total value locked (TVL) in decentralized finance projects rose an incredible 2,000%. For context, TVL refers to the total amount of assets that are being staked in a specific protocol. This value does not necessarily represent the number of outstanding loans, but rather the amount of underlying supply that an application and/or DeFi is securing.

The concept of an entirely new financial system has been accompanied by the blockchain space from the outset. For years, this has been a dream for the blockchain community, but that may change very soon. This vision of a new financial system has taken many steps closer to coming true.

Changes in a traditional model

Decentralized finance has the potential to leave a huge impact on the way in which banks operate in the future. It even has the capacity to transform the whole structure of the financial system at a macroeconomic level.

The dominant business model of commercial banks is to accept deposits and to give their clients loans. The practice of borrowing and lending is one of several cornerstones of an effective financial system. Through this, fund holders are encouraged to provide liquidity to the markets and, in exchange, they earn a return on assets that would otherwise be unproductive.

DeFi protocols allow for large-scale borrowing or lending of money between unknown participants and without any involvement of intermediaries. These applications unite borrowers and lenders, as well as automatically set interest rates according to supply and demand. On top of that, these protocols are inclusive, permitting anyone to interact with them whenever they want, from wherever they are, and with any amount.

It is not just lending and borrowing practices that are being impacted. There are also investment banks, exchanges, central banks, and insurance companies that DeFi is gradually working its way into. Much like how blockchain technology incorporated its system into various fields, DeFi is doing the same thing in the financial industry.

Future development

For the first time, we are seeing a financial system develop at a large scale without intermediary interference. As is, DeFi applications are unable to compete against traditional finance solutions when it comes to speed, security, and easy-of-use systems. However, DeFi has successfully created working applications that have garnered billions worth of capital. These resources will help further develop more user-friendly – not to mention competitive – applications for years to come.

If you’re a regular follower of the news, then you likely have come across more than a few stories about cryptocurrency. This digital-based market is sure to evolve and grow in popularity in the coming months and years and, as a result, you might be wondering if cryptocurrency lending is right for your business needs.

You also might be simply wondering, “What is cryptocurrency lending?”

Unlike traditional stocks, bonds, and mutual funds, cryptocurrency lending offers a number of financing benefits that may appeal to small businesses and startups, including short-term flexibility, low interest rates, and convenience. However, crypto lending platforms also contain elements of risk that are important to understand before you make any sort of digital transaction.

Here, we’ll outline some of the key terms used in the crypto marketplace, and identify how crypto lending differs from traditional financing, including potential pitfalls. If you’re unsure about your options, you may want to consider consulting with an experienced and reliable financing partner like Team Financial Group to learn more about all your financing choices.

Learning Where Crypto Can Take Your Business ​Starts With Understanding the Basics

For all the buzz surrounding crypto, it still can be a confusing world filled with strange names and acronyms. Here’s a quick rundown of common terms that you might come across as you research cryptocurrency lending as a financing option.

Cryptocurrency

A digital or virtual currency (aka “money”) stored, created, and processed by cryptography, making it difficult to counterfeit or duplicate. Crypto assets operate with a decentralized finance structure that allow them to operate outside of many government rules and regulations. Examples include Bitcoin, Ethereum, Dogecoin, Lite coin, and Ripple.

Stable coins

Cryptocurrencies that are backed by more traditional government-issued fiat currencies, such as the U.S. dollar, meaning their prices remain steady. Examples include Tether and Dai.

Digital assets

Digital material and assets that hold some sort of value and are owned by a company. This might include photos, videos, PDFs, logos, illustrations, audio content, even spreadsheets and Microsoft Word documents.

E-lending

E-lending is similar to a traditional mortgage application process. However, lenders are virtual and do not have a physical branch, office, or location. Communication with crypto loan processors and brokers are conducted via email, phone, or online chat.

Blockchain technology

The technology at the center of most digital currencies facilitates the process of recording transactions and tracking assets with a digital ledger of data that can be duplicated and distributed across a business network.

Fintech

Financial technology refers to a financial services company that integrates technology into a product or service in order to improve its functionality and speed up delivery to customers. Fintech examples include lending-as-a-service apps, alternative lending, and crowdfunding.

Smart contracts

A term used to describe computer code that automatically executes an agreement and is stored on a blockchain-based platform. Details of the loan amount, agreement, and repayment terms between borrowers and crypto exchanges are directly written into the code.

Distributed ledger technology

A digital system for recording asset transactions with details and information recorded in multiple places at once. Unlike traditional databases used by banks and financial institutions, a distributed ledger is a decentralized network, meaning there is no conventional data storage or administration functionality.

The Cryptocurrency Landscape Offers Opportunity — But Also Risk

While blockchain lending might seem like an appealing choice for small businesses, there are a number of potential crypto lending risk factors that borrowers should note compared to more traditional financing options.

Unpredictable values: The volatility of the crypto markets makes it more risky than traditional investing. Take bitcoin, for example. At one point in 2017, a single bitcoin was worth almost $20,000. Then, in 2018, bitcoin value dropped to $3,100, wiping out billions of dollars in the cryptocurrency market. Those kinds of losses resulting from price fluctuations can be devastating to small businesses.

Security concerns: Cybersecurity should be a concern for businesses of any size, especially when it comes to cryptocurrency lending. If you do decide to explore crypto loans, it is important that you put procedures in place to protect yourself from fraud, hacks, and other potential cyberattacks.

Lack of regulation: Lawmakers are starting to put more stringent rules and regulations in place at the state and federal levels, so borrowers will need to be prepared to adjust quickly as crypto lending changes.

Technical knowledge: The crypto marketplace also seems to change by the minute, meaning digital tools need to be consistently established, maintained, and updated. This constantly evolving landscape requires an extensive amount of research and vigilance for crypto loans, which may be a challenge for small businesses with limited resources.

Uncertain future: While cryptocurrency lending provides a number of appealing options and choices for businesses looking for financing flexibility, it still remains a relatively new marketplace. There are a lot of unknowns, meaning there are just as many potentials risk as there are rewards. You could say the old saying, “We don’t know what we don’t know,” definitely still applies.

Team Financial Group Makes Equipment Financing Fast, Flexible, and Easy

While cryptocurrency lending may be an intriguing option for small and midsize businesses looking for new ways to foster growth, a financing partner like Team Financial Group offers significant benefits that blockchain lending cannot provide.

We’ve worked with businesses across dozens of industries and provided financing for companies with a wide range of credit scores and histories. As an independent financing partner, we have more flexibility than a bank, so we treat you as more than just a credit score. Instead, we look at the whole picture of your business, your team, and your annual revenue to find a financing option that works for you.

Additionally, if you’re a vendor, here are just some of the reasons why working with Team Financial Group as your financing partner can benefit your business and your customers:

1. We can take a hands-on or hands-off approach, depending on your needs, regarding speaking with your clients.

2. We provide marketing support as well as same-day approvals and funding.

3. We offer the flexibility of working with an independent lender with 20 years of industry experience.

Still have questions about cryptocurrency lending or any of your potential equipment financing options? Let us know. We can help you learn more so you can understand all your options and make an informed choice for your business.

Partner With Team Financial Group for Your Equipment Financing

At Team Financial Group, we work with clients to identify and customize financing solutions that meet their specific needs. Our commercial and office equipment financing options can improve your business’ cash flow and overall financial health.

With the explosion of DeFi projects comes new ways of managing, handling, and storing money. One method that decentralized tools use to do this is via liquidity pools. These are a revolutionary and deeply significant technology that has allowed for DeFi to flourish over the last few years.

Introduction to Liquidity Pools

Liquidity pools are relatively new tech, being popularised by Uniswap; perhaps the most famous decentralized exchange on the market. Essentially liquidity pools are smart contracts that hold large quantities of funds within one location, that allow traders or borrowers to take from that pool. They help decentralized exchanges and loan providers to connect individuals with the money they are looking to work with.

People hand their coins and tokens over to liquidity pools in exchange for an incentive of some sort (with different projects offering different incentives). These funds are then used to help make trades or issue loans. The money people hand is not exactly lost, because a fully functioning liquidity pool should never run out of its funds, and so the people giving their money over should be able to take their money out in the future.

Liquidity pools were developed as a way of helping to bootstrap DeFi lending and trading platforms in their early stages; when DeFi was in its infancy, there were few people using them because they were new and untested. This meant that if traditional order books were used then people would have to wait hours, or even days, for their trades to be matched with another person. However, liquidity pools eradicate this issue because rather than being matched with another person, users are instead matched with the project itself, which is always ready to issue a loan or make a trade because it always connects to the liquidity pool. These are known as automated market makers (AMM)

What are AMMs?

An AMM is a machine or program that matches with every trader or borrower. They automatically match each person with the best offer for the token or coin they are about to engage with. They are the ultimate alternative to the traditional order book, because AMMs are always available and can be used by multiple people, so they are perfect for newer projects that might have a low user-count.

AMMs use algorithmic principles to adjust their prices in accordance with the standards of the market at large, meaning that competitive rates are consistently offered. For the end user, there is no noticeable difference between engaging with an automated market maker and a real human.

Downsides of Liquidity Pools

Liquidity pools and automated market makers are necessary inventions within the DeFi market, but like all DeFi inventions, they are not always stress-tested or foolproof. One of the biggest downsides of using a project that has a liquidity pool is that the pool can get hacked. It is rare, but as DeFi is all based around programming (rather than human intervention) it is entirely possible for somebody to break into a liquidity pool and deplete it. Generally, this will not cause issues with the end user, so long as they are borrowing or trading, and not holding their money in the pool. In these circumstances, all that would happen is that the pool would close down.

If you are thinking about applying for a loan, you must understand the differences between fixed interest rates and variable interest rates. Whatever the reason you need this loan, understanding the differences between variable and fixed interest rates can help you save on money and achieve your financial goals.

Exhibit A: Fixed

‘Fixed’ interest rate loans are loans where the interest rate charged will remain fixed throughout that loan’s term. It makes no difference what market interest rates do either. This will lead to your payments being the same during the whole term. Whether this type of loan suits you largely depends on the interest rate environment when the loan is taken out. Moreover, it depends on the loan’s duration.

When a loan is fixed for its term, it stays at the current market interest rate, with or without a spread that is distinct to the borrower. For the most part, if interest rates are low, but will soon increase, then locking in your loan at that fixed rate is the best route to take.

Many homeowners go with the fixed rate option because they can prepare and budget for their payments. This is particularly handy for consumers with finances that are stable, yet tight. For them, it provides protection against potential rising interest rates that in turn could increase their loan’s cost.

Exhibit B: Variable

A ‘variable’ interest rate loan is where the interest rate charged on the outstanding balance varies with the changes in the market interest rates. The interest charged on this specific type of interest rate loan is connected to an underlying benchmark or index, like the federal funds rate.

Consequently, your payments will also vary so long as your payments are integrated with principal and interest. Variable interest rates can be found in credit cards, personal loans, mortgages, derivatives, and corporate bonds.

Generally speaking, variable rate loans have lower interest rates than their fixed counterparts. This mostly because they are a riskier choice in the eyes of consumers. Rising interest rates have the capacity to boost the borrowing cost, and consumers choosing variable rate loans need to be aware of the possibility of increased loan costs. For consumers who are in a good enough position to take the risk, or who aim to quickly pay off their loan, variable rate loans are the way to go.

Which one should I choose?

As simplistic as this discussion is, the explanation will not change one bit in a comparatively more complex situation. Studies show that, over time, the borrower is more likely to pay less interest as a whole with a variable rate loan in comparison to a fixed-rate loan.

Be that as it may, trends of the past aren’t exactly indicative of performances in the future. The borrower needs to take the amortization period of a loan into consideration. This is the total length of time it takes for a loan to be paid off. The longer a loan’s amortization period is, the greater the effect an alteration in interest rates will have on your payments.