In today’s dynamic financial landscape, a multitude of asset classes offer enticing returns, ranging from cryptocurrencies and stocks to real estate and P2P loans.
Yet, these traditional investment avenues only scratch the surface of the opportunities available to savvy investors.
Hybrid products, like cryptocurrency-backed loans, are paving the way for new and exciting investment prospects. In our comprehensive loan comparison, we reveal the top providers for bitcoin loans and share expert insights on how to make your cryptocurrency lending endeavors a success.
To explore even more options in the crypto world, don’t forget to check out our extensive guide on Crypto Exchanges, where you’ll find invaluable information to help you navigate the digital currency landscape.
- Here are the best crypto lending platforms in comparison
- Binance - interest on deposits and available loans
- What are cryptocurrency loans?
- How do cryptocurrency loans differ from normal P2P loans?
- How does cryptocurrency lending work?
- How do investors make money with cryptocurrency loans?
- What are the risks associated with cryptocurrency lending?
- Which cryptocurrency lending platforms are good?
- Conclusion
Here are the best crypto lending platforms in comparison
| Crypto.com | CoinLoan | Binance | ||
|---|---|---|---|---|
| Logo |  |  |  | |
| General overview | ||||
| Founded | 2016 | 2017 | 2017 | |
| Headquarters | Hongkong, Bulgaria | Estonia | Malta, Hongkong | |
| Deposit methods |     | Crypto, SEPA, SWIFT | | |
| Number of users | 10.000.000+ | unknown | 30.000.000+ | |
| Crypto lending | ||||
| Cryptocurrencies for rent | BTC, ETH, LTC, XRP, BNB, CRO, LINK, BAT, MKR, PAX, XLM, ATOM, XTZ, BCH, Stablecoins | USDC, USDT, BUSD, TUSD, PAX, DAI, EUR, GBP, BTC, WBTC, ETH, LTC, XRP, XMR, LINK | BTC, ETH, LTC, XRP, XLM, BCH, BNB, BUSD, EOS, ETC, LINK, TRX, USDT | |
| Interest | 4 - 14% | 4.5 - 11.95% | 0,22 - 15% | |
| Borrowing period | Flexible, 30 days, 90 days | From 1 month to 3 years | Every day, 15 days, 30 days | |
| Compound interest | ||||
| Minimum period | no | no | Up to 30 days | |
| Extras | Interest rate up to 14.5% in USDC | Funding of USD 108.7 million | Savings | |
After checking a number of cryptocurrency lending and borrowing sites, our favourites in terms of security combined with favourable interest rates are CoinLoan and Binance.
Binance – interest on deposits and available loans
ecoinomy rating:
9.1
| Headquarters | Malta |
|---|---|
| Cryptocurrencies for lending | USDT, BUSD, USDC, 1INCH, AAVE, ADA, ALGO, ATOM, AVAX, BAKE, BAND, BAT, BCH, BTC, CHZ, COMP, CRV, DAI, DAR, DASH, DOGE, DOT, DYDX, ENJ, EOS e al. |
| Interest on the loan | Current conditions on the official website |
| Loan period | 7 days - 180 days |
| Payment Methods | Criptovalute, SEPA, VISA, MasterCard |
Binance is one of the most popular cryptocurrency exchanges on the market. For this reason, the level of security is good and the interest rates are particularly competitive. However, besides cryptocurrency trading, there are other services such as Binance Savings. Binance Savings is a kind of booklet that generates income for cryptocurrencies. At the time of writing, Binance offers more than 70 different cryptocurrencies available under ‘Cryptocurrency Lending’.
To do so, investors must own compatible cryptocurrencies or purchase them directly from Binance and then invest them through the Binance Savings service. Binance then lends these cryptocurrencies and rewards the investor with an attractive interest rate. Interest rates, in turn, vary between different cryptocurrencies and have an ‘Average Annual Yield’. However, this value is always based on the interest of the last 7 days and multiplied by 365. Therefore, the actual yield may differ from the previously estimated yield.
What are cryptocurrency loans?
In principle, cryptocurrency lending is similar to P2P lending. Classic P2P platforms connect borrowers with lenders and work without the need for banks. The same applies to cryptocurrency lending, P2P, but using cryptocurrencies. The lender makes its cryptocurrencies available on the market and charges a fixed rate for this. To do this, the cryptocurrencies must be present in the platform’s wallet.
During the term of the cryptocurrency loan, the lender receives interest on the transferred coins. At the end of the repayment period, the entire investment is returned to the lender.
He then receives his coins back along with the accrued interest. The particularly interesting aspect of cryptocurrency lending is that it is a practically perfect approach to generating passive income. Profits, however, depend very much on the platform used and the cryptocurrency borrowed. Unlike classic lending on established P2P platforms, the returns are somewhat lower.
The average rate of return on cryptocurrency platforms is in the single digits. However, there is also the possibility of higher returns. In the case of Crypto.com, for instance, investors assigning a local CRO token can expect attractive returns in the mid double digits. In the case of lending established coins such as Bitcoin and Ethereum, the returns are slightly lower. Then we want to explain why lending can still be profitable
. 
How do cryptocurrency loans differ from normal P2P loans?
The major difference is obvious: while regular or P2P lending is based on fiat currencies, things are slightly different with cryptocurrency lending. Here, investors must own cryptocurrencies in order to lend them on the market. Furthermore, the cryptocurrency lending industry does not involve a myriad of loan types such as real estate financing, consumer loans or business loans. Instead, the whole procedure is very standardised, anonymous and fast.
Those who already have experience as P2P investors will first have to get used to the new approach. In this case, there is no document verification of the loan project or the borrower’s past. Instead, borrowers must provide their own assets and deposit them as collateral. If the loan is no longer serviced, these so-called securities can be liquidated to reduce or even compensate the investor’s loss. Consequently, the entire process relies on consumer confidence.
How does cryptocurrency lending work?
Put simply, there are exactly three sides to cryptocurrency lending:
- Lender
- Borrower
- Technical platform
The lender essentially makes its cryptocurrencies available through a technical platform and receives remuneration for this. As mentioned, the exact definition of this depends on the type of cryptocurrency and the platform.
Then, at the end of the loan period, the coins are returned to the lender together with the agreed interest. A small part of this return in turn goes to the technology platform, which thus monetises its business model.
How do investors make money with cryptocurrency loans?
When it comes to cryptocurrency lending, some people worry that borrowers and lenders are at the mercy of changes in cryptocurrency prices. But actually, the loan is made in cryptocurrency, not in local currency. So whether one Bitcoin is worth $32,000 or $100,000, the debt balance remains at one Bitcoin. The borrower is responsible for generating a return using the borrowed cryptocurrency, but it’s not always clear how they will do this.
In these cases, lenders have to trust that the borrower’s yield will be positive and that their capital will be repaid. Some lending platforms prohibit the use of assets to prevent speculative returns and require capital to be used as collateral instead.
This gives borrowers three options for generating returns:
- Call options
- Put options
- Trading cryptocurrencies on margin
Investors often prefer to use transparent platforms that let them see exactly how funds are being used. Essentially, the data is hashed and then shared with the entire community. This not only helps investors keep a close eye on whether returns are being generated, but it also provides a way to assess the risk of the investment. If returns are not being generated, the risk can gradually increase over time.
By using transparent platforms, investors can stay informed and make more informed decisions about their investments.
What are the risks associated with cryptocurrency lending?
Unlike traditional P2P lending, creditworthiness is not a significant concern in cryptocurrency lending. However, on certain platforms, investors may need to entrust their coins and tokens to strangers, which can be risky.
As the saying goes, “not your keys, not your coins” which means that investors bear some level of risk.
With no guarantees in place for cryptocurrency ownership, the risk only increases. Therefore, it’s important to be cautious when storing coins on centralized cryptocurrency lending platforms, as you no longer have full control over them.
Although investing money on traditional lending platforms also involves risk, it is only considered ‘safe’ once the money is back in our accounts.
Nonetheless, larger communities have already been formed around bigger cryptocurrency lending platforms, and if something goes wrong, there will quickly be a backlash on sites like Twitter and Telegram. Providers are also aware of this transparency, which is why errors have been rare so far.
Which cryptocurrency lending platforms are good?
Now, let’s talk about the best cryptocurrency lending platforms. The platforms we’ve selected offer strong returns, a vast network, and an easy-to-use interface.
Conclusion
If you’re looking for ways to make additional profits from your cryptocurrency investments, cryptocurrency lending can be an attractive option. However, it’s important to choose reliable and transparent platforms that provide current information on market trends.
The platforms we’ve chosen offer a great selection of products, attractive loan yields, and brand recognition that investors can trust.
If you’re new to cryptocurrency loans, it’s wise to start with a small investment. Currently, Binance offers some of the best deals with particularly attractive interest rates for both deposits and loans.
As you continue to expand your knowledge of the crypto ecosystem, don’t miss our in-depth analysis of the Best Trading Platforms available. This comprehensive guide will provide you with the essential information you need to choose the right platform and take your trading experience to the next level.
Author: Gianluca Lombardi
Gianluca is the editor-in-chief of this site. A finance graduate, he is an active trader who has tested all trading platforms and knows all their secrets. Technology is his passion; he spends much of his free time in the metaverse. Gianluca loves learning new things, researching, discussing and writing about technology, especially when it comes to cryptocurrency and blockchain technology.
