Lending with Bitcoin has become a major part in investing with the innovative cryptocurrency. It’s indeed quite disruptive because it’s really easy to make any transfer to anyone in the world making it much more efficient than any other currency. It’s also a bit more risky, as some borrowers can also be scammers and run with the loot. But P2P lending platforms are getting serious, and you can choose a very low risk borrower to get into it. Some people are making good money (but you’ll need a good stash) and some services even provides automatic investing when a borrower that match your preferences appear on the website.
The P2P lending with exchanges is one of the most interesting investment you can make to watch your bitcoins growing passively and I really like it because it has a lot of advantages, while not being perfect of course though. The system is working like that : some traders like to margin trade but they need some money to borrow. Normally the exchange will lend them the money with internal funds but bitcoin exchanges had an other idea : why not lend the money of the users directly ? The exchange then act as a service between lenders and borrowers but the difference between pure lending services is that people trading with the money they borrow can’t withdraw it. So first advantage : they can’t run with the loot ! The second advantage is that even if the trader makes some bad moves, there is normally an automatic stop-loss that will give back the money to the lender. So normally the lender can’t loose, they just wait for the interests to flow in.
P2P lending services (not exchanges)
- BtcJam is the most well known service. It’s quite simple to use as there is an auto-invest feature and the borrowers are rated according to many parameters (every account begin with an E+ rating that will rise if you verify your identity, Paypal etc.). It’s been a while that this service exist and they are really actively trying to deter scammers from using the website.
P2P lending with exchanges
- Poloniex is an exchange specialized in altcoins but you can lend bitcoins. It became a very popular exchange recently with Ethereum trading.
- Quoine is a Singapore based exchange that offers p2p lending in BTC, USD, and Japanese Yen (lending is suspended at the moment as they’ll make a separate website).
- Bitfinex. After the hacking debacle, they’ve handled the situation very well for users (people got back their money). High volume lending exchange.
Disclaimer : I can’t be held responsible for any loss encountered using these services. Sometimes the links are affiliates links. It can often provide you a discount and help me running this website. It does absolutely not influence my reviews and opinion.