Bitcoin: A currency for P2P lending?

Bitcoin: A asset for P2P lending?

Bitcoin investments can be pretty dynamic thanks to its volatility. You can always hold your bought Bitcoins and wait for profits, but why not put them somewhere they can grow up to an even bigger value? Ever considered P2P Lending?

Bitcoin Lending

What is P2P Lending?

Peer-to-Peer Lending is a system of online lending through platforms that allow individuals to lend or borrow on an individual basis. Peer to Peer Lending returns are higher than those of bank loans and the interest rates for borrowers are flexible and negotiable.

With the great return on value and all the perks around P2P lending investments, many organisations have considered using Bitcoin as their digital asset. If you believe the price of Bitcoin would increase and you want to earn interest on your investments, P2P lending is an excellent opportunity.

How can you invest Bitcoin in P2P Lending?

This requires creating a wallet in a Bitcoin Lending organisation. After creating a wallet a lender would have to transfer Bitcoins into it. There would be multiple investment options in the form of loans you can give out. As you choose your option and invest in a particular loan, you would have to wait till that loan has been fully funded. As soon as this happens, you will get monthly repayments with interest till the loan matures.

As different borrowers have different repayment constraints, this allows you — the lender — to adjust your levels of risk before investing your cryptoasset. However, you always need to be cautionary when choosing the correct borrower who is most likely to NOT default on their loan! Now with the addition of Bitcoin, it adds much more caution, as Bitcoin sum once lost might never be recovered.

But with the specialised credibility systems provided by these cryptoasset lending wallets, it is easier, secure and more beneficial to invest. Moreover, your loan repayments would go straight into the wallet, and you may reinvest them or send them to an exchange and exchange it for fiat currency.

More on Bitcoin Lending investments

  • Diversification of your portfolio is obviously beneficial. The lending opportunities you choose might give you higher returns, but it is not necessary that only one option works best at all times. It is better to invest the same sum in different borrowers from the available opportunities. So, with the inclusion of the leading cryptoasset, your investment covers two broad spheres and hence is well diversified.
  • Higher returns are possible in lending with transactions taking place in Bitcoin. This is actually a dual advantage. The value repayments would go higher with an increase in Bitcoin value. Bitcoin lending becomes a long term investment with 1 year or 2 year loans. If the value of Bitcoin increases rapidly for the next few years like it has been in 2017, Bitcoin lending could prove to be gold.
  • In-spite of the fact that Bitcoin investments are in the “wait and watch” category, it is always advisable to find a way to utilize this commodity-like cryptoasset for reinvestment. Lending them would not only bring monthly repayments in Bitcoin but repayments in a asset that holds a lot of money even in small portions.

Conclusively, Bitcoin Lending can prove to be a huge success. But keeping in mind the volatility and added risks, investors must always be aware and understand all their choices before taking any step.

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