loans are becoming popular amongst crypto investors that are looking for liquidity without having to sell their crypto.
Using crypto as collateral is a great way to do things like buy a house, fund a business, or pay off high-cost debt. Additionally, there can be tax benefits to borrowing crypto. Unlike selling your crypto, a crypto or backed loan does not trigger a capital gains tax event, saving you the headache when doing your . Companies that offer crypto and loans have been popping up everywhere to offer this type of service to investors. This article breaks down the best of these crypto lenders.
BlockFi
Based in New Jersey, offers financial products for holders to do more with their digital assets. The company services worldwide, including 47 U.S. states, with interest-earning accounts and low-cost USD loans backed by crypto. BlockFi has an impressive list of investors including Galaxy Digital, Susquehanna, Akuna Capital, Fidelity, Recruit Strategic Partners, Ventures, CMT Digital, SoFi, ConsenSys Ventures, and Morgan Creek Digital.
To get a loan, you either put up , , or as collateral. The company currently offers up to a 50% Loan to Value (LTV) ratio on your crypto.
This means to take out a $25,000 loan, you would need to put up about 10.06 in collateral (currently worth about $50,000 at the time of this writing). Interest rates start at 4.5% with 12 month loan durations.
Unchained Capital
Based out of Austin, TX, is another provider of crypto and loans. The company follows a quick 3 step process for getting a loan. With the easy process, they can approve up to $1,000,000 in crypto loans in a single day.
Unchained takes a unique approach to custody and securing your loan. By developing a multi-signature model of storage, they eliminate the single point of failure model of crypto custody.
Three independent key holders collaborate to protect collateral which is then stored in multi-signature addresses requiring 2-of-3 keys to spend. These keys are held by you (the borrower), Unchained, and a third party key agent. No one person or organization is a single point of failure. This clever security element is a large value proposition for Unchained.
Salt Lending
Based out of Denver, CO, is another popular platform for crypto and loan origination. Claiming to be the original -backed loan, Salt offers loans in , , and also at a LTV ratio of 50%.
The company is expanding its lendable areas across the US and to countries like Bermuda, , Hong Kong, Switzerland, the UAE and Vietnam to provide people and businesses with access to financial freedom provided by accessibility to fiat currency through assets.
Salt also provides near-real time monitoring of your unique account and provides certain guarantees that your assets are there for you whenever you need to access them.
Nexo
Headquartered in Switzerland, is one the global leaders in crypto lending. Nexo gives users access to an instant line of credit when they deposit and crypto into their Nexo .
The company offers loans in a multitude or including , , XRP, BNB, and .
The for getting a loan from Nexo includes depositing into a secure Nexo and then immediately having access to a loan, no credit checks are required. The is completely insured and lets you borrow in over 45 different FIAT currencies around the globe.
In addition to loans, Nexo offers interest bearing accounts and other financial services utilizing your . The company has already issued over one billion dollars in crypto loans today.
Crypto Tax Software
Are you using crypto and loans to save on taxes? Borrowing against does not trigger a . However, tax reporting for all of your transactions can still be a challenge. You can automatically calculate and by using crypto tax software like CryptoTrader.Tax.
is the leading tax preparation platform used by over 12,000 crypto enthusiasts to handle their crypto taxes. Simply upload your crypto transaction history into the platform and automatically generate your necessary . You can give these reports to your or upload them into your tax filing software like .
Published at Fri, 12 Apr 2019 20:19:05 +0000
