There is something called lending on the virtual currency exchange. Even if you have heard the term, there are so many people who do not know how it works or which virtual currency exchange offers it. And you need to know what it means in the first place.
What is lending?
Virtual currency lending refers to lending the virtual currency held by the trader to the virtual currency exchange. And it is a service that you can get interest in virtual currency according to the quantity by lending it for a certain period of time. There are so many traders who are lending cryptocurrencies because it is an attractive operation method that steadily increases cryptocurrencies and does not require special trading techniques. It is very popular because it is a method that allows you to reliably increase your funds without taking the risk of virtual currency trading.
Benefits of lending
Let’s take a look at the specific benefits of lending (credit virtual currency).
No trading technique required
The advantage of lending is that you don’t need trading techniques. No need to do technical analysis and think deeply about where to enter. It is a mechanism that allows you to earn income without spending working hours or trading hours.
more than depositing in the bank
In some developed countries, there is almost no interest rate even if you deposit money in the bank. Lending can receive higher interest rates than bank deposit interest. It is obviously high because it can be set at an annual rate of 1 to 5% for lending.
No risk of being carried away
The biggest risk of virtual currency exchanges will be runaway. When lending and borrowing through an exchange, the risk is reduced compared to individuals because it is implemented according to the rules of the exchange. In the case of virtual currency exchanges, the risk is reduced compared to individuals.
Disadvantages of lending
Next, I will explain the disadvantages of lending. Is there such a risk?
As a disadvantage of lending, the market price of virtual currency may fluctuate rapidly. Market prices of virtual currencies fluctuate daily. If the market price is lower than at the time of lending, the price change will be the loss for the lender.
Virtual currency exchange collapses
There is no problem if it is a major exchange in the world, but if it is not, the exchange may collapse during lending. If the exchange itself collapses, it is unknown whether the virtual currency itself will be refunded. In the worst case, they may not come back.
Open a free account
Bybit allows you to open an account for free. Since it can be opened for free, there is no risk, so if you are interested, let’s open an account. I will introduce it in the article below, so I hope you can refer to it.