Using Bitcoin as collateral for cash loans is a well known way to release much needed capital for cryptocurrency holders. Whether you need access to fast cash or to just buy more bitcoin, SmartFi has some of the best rates on the market. The team behind SmartFi have been leaders in this field for some time with over $200 million worth of loans transacted fostering trust in SmartLoan products.
Although some people may think otherwise, Bitcoin - and by extension, selected other cryptocurrencies - are valid collateral options to acquire cash loans. There is a certain appeal to using Bitcoin as collateral for a cash loan, rather than converting the BTC to cash directly. Bitcoin has the potential to rise in value, so rather than sell BTC for fiat, it is often more appealing to release its cash value via SmartLoan. This means that enthusiasts and businesses can take advantage of the potential upside of the Bitcoin price.
With this Bitcoin collateral model, the user will get their initial BTC back once the cash loan is repaid. If the Bitcoin price rises over time, the user has successfully made a profit without relying on trading BTC. SmartFi offers cash loans for crypto at a much lower APR compared to traditional financial providers.
Having this option on the table is beneficial to crypto holders. Bitcoin, more often than not, notes robust yearly performances. Knowing the funds will be yours to reclaim while obtaining a cash loan is a different take on the "buy and hold" strategy Bitcoin enthusiasts tend to favor.
Many scenarios exist in which Bitcoin users may need a cash loan. Whether it is a big or small loan, there may always be an unexpected need for extra cash but one increasingly popular use case within the current bull market is to use a cash loan to buy more Bitcoin.
Peter McCormack advertised his involvement in this with a $46,250 loan - which he used to buy 2.55 BTC. His high profile tweet noted an APR of 7.9% that will require him to pay back $57,806.85 by 2026. As the price rises, McCormack will collect a profit from this Bitcoin-collateralized cash loan.
Crypto collateralized loans are just one product in the SmartFi offer, its broader remit is to enable wealth creation through cryptocurrency assets. As a USA based and FinCEN-registered open finance platform, its services extend to interest-bearing deposits and trading tools.
The cryptocurrency collateral loans will remain a big part of the SmartFi ecosystem. Smart Loan offers competitive fixed-rate interest that can be deferred until the loan period ends. Such an approach negates monthly payments, which can simplify the process for users, though opting for monthly payments still remains an option if that is desired.
Expanding a business can be costly, but for crypto-based business "sacrificing" BTC holdings is never a favorable decision. At SmartFi our team has historically focussed on offering cash loans to mining firms and operators using Bitcoin as collateral. You could say we’re experts in it as our team has facilitated $200 million in loans.
By making the lending and trading of cryptocurrencies more accessible, SmartFi is setting itself up to lead the industry towards the broad adoption of cryptocurrency. Not only will it be easier to take out a crypto collateralized loan but SmartFi will support multiple cryptocurrencies, Bitcoin, Ethereum, and Litecoin as collateral for cash loans. Crypto enthusiasts owning other assets will have an easier time converting to these four currencies to obtain a cash loan, should the need arise.
Enabling flexible loan options removes the need to sell cryptocurrencies for real-world purposes and gives greater scope to crypto users to actively managing their finance. Take a look at our competitive rates today and get started with Smart Loans.
Using Crypto as a collateral for cash loans.
The LTV stands for Loan to Value and represents the ratio between deposited collateral and loan amount. One has to maintain a LTV as per the loan terms or risk getting liquidated.
By putting crypto as collateral, a cash loan can be secured which can be used to trade crypto or other assets for greater profits.