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Crypto Loans

How Does a Crypto Backed Loan Work?

Published, 17 September, 2020

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One of the more exciting advancements in the cryptocurrency industry is the ability to leverage your crypto holdings to borrow fiat currencies. At BlockFi, we offer collateralized loans using Bitcoin (BTC)Ether (ETH), or Litecoin (LTC) to get USD loans.

How does crypto lending work?

Well, with traditional collateralized loans, the borrowers will stake an asset and receive money in response. The main benefit is that you don’t have to sell any of your assets in order to receive this funding. With BlockFi, instead of using a home or business, you’re collateralizing your crypto assets.
Why is not having to sell your crypto important? Well, if you believe that your investments will go up in price over time, you may not want to sell them before they reach that maturity. With a BlockFi loan, you keep all the upside potential of your crypto. Additionally, any forks that happen during the term of your loan will be passed back to you as long as our custodians support that fork. Click here for more information on how we store your digital assets.
Another major benefit of not having to sell your crypto, BlockFi asset backed loans can also have positive tax benefits. For example, your loan does not involve any taxable events. That means there are no capital gain taxes to claim. With that said, everyone’s situation is different and we are not tax experts. Please consult with an accountant before making financial decisions. Click here for more information on how BlockFi can limit your tax exposure.

What can I use a crypto asset loan for?

There are a number of use-cases for a BlockFi loan. One of the main use-cases our clients report is for investing in real estate. Whether you’re buying your first home or renovating, a crypto asset backed loan is a great way to access the value of your crypto without selling. Other uses-cases include diversifying investmentspaying off taxes with cryptobacked usd, and paying off higher-cost debt.
BlockFi also has a number of business clients who look to us to help them do anything from funding payroll to paying for an expansion. We’re proud to provide this level of liquidity to help grow the crypto ecosystem.

How does a BlockFi loan work?

It takes less than 2 minutes to apply for a BlockFi loan. Once submitted, our BlockFi team will give you a decision and present you with loan terms within hours. After you accept and send your collateral, we will wire USD directly into your bank account. It’s as simple as that.
End-to-end, our clients can apply and have USD in their bank account as few as 90 minutes. Additionally, we have the largest U.S. lending footprint and interest rates starting at 8%, making us the largest, fastest, and most affordable crypto asset-backed lender in the U.S. If you’re looking for a way to leverage your digital assets without having to sell, apply for a BlockFi loan today.
If you have any questions about BlockFi or how our loans work, please contact us at [email protected]. We love hearing from you.
BlockFi lets you use your Bitcoin, Ether, and Litecoin to do things like buy a home, pay down debt, or even fund your business without having to sell your crypto. Start your application now and get funded in as few as 90 minutes.

Last updated on June 2nd, 2021

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Disclaimer: Rates for BlockFi products are subject to change. Digital currency is not legal tender, is not backed by the government, and BIA accounts are not subject to FDIC or SIPC protections. Security is our top priority. Please see our Vulnerability Disclosure Form and Bug Bounty Program.
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Disclaimer: Rates for BlockFi products are subject to change. Digital currency is not legal tender, is not backed by the government, and BIA accounts are not subject to FDIC or SIPC protections. Security is our top priority. Please see our Vulnerability Disclosure Form and Bug Bounty Program.
2021 © All Rights Reserved.