How to Get Most of Your Crypto When Bitcoin Price Skyrockets
Bitcoin price hits $10,000; the crypto market is overall in a green zone. What does it mean? First and foremost, it means that the amount you can borrow for your crypto asset is growing by the minute. Let's see how you can make the most of the trend.
Consider a Loan Example
You took a loan at the beginning of the year 2020 when BTC was at the level of $7,000. If you used one bitcoin as a deposit, you could only take 70% of its value, right? In our example with one BTC, you borrowed $4,900.
Your bitcoin has significantly risen in value in recent months. If you could take your 1 BTC loan right now, you’d get $7,000 instead of $4,900, because bitcoin’s price surged against the United States dollar.
70% LTV decreased to 49%, even more since you have already made at least one payment according to the repayment schedule. It means that a significant part of your assets sitting unused.
Unlock Extra Collateral
On CoinLoan, you can add or withdraw extra collateral from an active loan in one click. You pay no fees to the platform for moving your assets.
It’s not necessary to hold more collateral than required to secure your loan, especially when you have better options on how to use it. But please remember, that extra collateral reduces the liquidation risk (margin call) in case of the significant collateral market value drop.
If you decided to unlock your assets, go to My Loans, and find your active borrowed loan. Click on View Details. On the right, you will see the information on collateral and two buttons to manage its amount, as shown in Figure 1. If you can see only Add More Collateral button, your LTV must be 70% or below, and you have no excess for withdrawing.
Click on the Withdraw Collateral button. You’ll see a clue with the amount available for transfer. The crypto you free up will shift immediately to My Wallet, available to any transactions.
How to Profit From Idle Assets?
The first scenario is to get an Instant Loan if you want to draw more cash against your crypto.
The other opportunity is to earn interest on your asset using Interest Account. On bitcoin, for instance, you can earn 4.4% APY. The good thing is that interest is accrued daily, so make profits starting from one day and withdraw assets whenever you want without losing the income earned. If you see the market situation changes, you can relocate crypto to secure your existing loan with a more significant amount of collateral.