Guide for traders

Coin lending is a stable and risk-free source of income and is simply about lending to those users who apply margin trading. The only risk we have comes from the cost of acquiring the coin that we are going to lend. So, for example, if we buy Doge at an x price, and instead of trying to sell it at a higher price we decide to lend it, then there is a possibility that its price will drop by the time our coins are returned. We emphasize the fact that from the moment we proceed to lending, we can’t have in our possession our coins before the end of the period for which we have lent them. This can only be done by the borrower. The time period we can lend a coin usually ranges from 2 to 60 days and we are free to choose which time period is the most appropriate for us. When lending rates are low, it is advisable to lend for 2 days, and when interest rates are high, it is advisable to lend for a longer period of time.

Lending is also a useful tool to deal with a potential drop in the price of a coin we have already bought, and may eventually leads to profit even if we will sell our coin at a lower price than it was bought.

Example

Purchase 200,000 Doge at 0.00000064. The cost will be 0.12800000 BTC.
Target price at 0.00000066. The targeted revenue will be 0.13200000 BTC.
If the Doge price drops to 0.00000062 BTC, then in order to have the desired revenue we will have to sell 0.13200000 / 0.00000062 = 212.903,22580645Doge.
So, we need to earn from lending ~ 12,904 Doge

The time it takes for this to be achieved depends on the lending interest rates, which come up through trading with other potential lenders. The best-known platforms where we can lend a coin are BitFinex, Poloniex, and Yobit's Invest Box.

* For reasons of simplification, in our example, we did not calculate trading fees, as well as the fees from lending profits.

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