Investing

Asking the question, can you get the best bitcoin loans or what cryptocurrency to invest in, most people immediately answer – in Bitcoin. This is the right answer, but not the only one. Bitcoin is the first cryptocurrency in the world, it was designed as a peer-to-peer payment system. The development of the protocol was completed in 2009, at the same time Satoshi Nakamoto published the code of the program client. Bitcoin’s price is constantly rising. While at the time of its creation, it was worth a fraction of a cent, at its peak in 2022, the price reached $69,000.

For those who have decided to start investing in digital assets, Ethereum (Ethereum or Ether) may be no less attractive. It is not a payment system like Bitcoin. Ethereum was conceived as a platform for launching decentralized online services. This altcoin appeared in 2014. It has the second market rank, which means it comes right after Bitcoin. The level of market dominance of Etherium is 21.07%.

When considering which cryptocurrency to invest in, it is not necessary to focus on the market leaders. There are quite a few other popular altcoins that trade well on exchanges and allow you to earn passively. For example, Cardano (ADA), Ripple (XRP), Dogecoin (Doge), and Polkadot (DOT). Separately, let us mention Binance Coin (BNB) – it is a coin of the cryptocurrency exchange of the same name, it is not only in demand in the cryptocurrency market but also gives its holders a discount on commissions when trading on Binance.

Where is the collateral stored? There are two options for storing collateral:

The collateral is held by a third party. This option is offered by platforms that lend with their funds. They get users’ cryptocurrency into temporary possession. This option is also offered by some p2p services that provide a platform for interaction between lenders and borrowers. The borrower transfers the collateral to the address specified by the service, and the lender releases the money. When the loan is repaid, everything happens in reverse order.
The p2p platform stores the collateral at the multi-sig address. In this case, the platform acts as a guarantor of the transaction. For each transaction, a new multi-sig address is created from the public keys of the borrower, the lender, and the platform, to which the collateral is transferred. One private key remains with the borrower, one with the lender, and one with the platform. Funds are released when 2 of the 3 keys are entered.
Biterest keeps the pledge on the multi-sig address. The platform does not store funds or users’ private keys. Neither party can access the collateral until the transaction is closed.

Under what conditions can I get a loan with cryptocurrency collateral?

Platforms that lend out of their funds and hold users’ assets set terms for loans. They set minimum and maximum loan amounts, interest rates, discounts, loan-to-value (LTV) ratios, and terms. In p2p lending, borrowers and lenders negotiate among themselves and choose their terms. On Biterest users can fully form loan terms without restrictions: the platform has no mandatory requirements for amounts, terms, interest rates, and discounts.

How is the collateral amount determined?

The value of collateral in any type of loan must be higher than the loan amount. The amount of collateral depends on the loan amount, the annual interest rate, the term of the loan, and the discount – the “safety margin” of the collateral.

The discount indicates how much the exchange rate of the collateral currency may fall before the value of the collateral equals the loan amount and the transaction closes (this situation is called the emergence of a margin call). The greater the discount the borrower gives, the greater will be the collateral amount.

PaxFul

Cryptocurrencies available: Bitcoin (BTC), Ethereum (ETH), Tether (USDT)
Fees: 0.1% – 5%, depending on the payment method (only from the merchant)

The main advantage of the PaxFul exchange is the huge choice of ways to pay for bitcoins, ether, and USDT. These are not only e-wallets and bank cards, but also gift cards, cash, and altcoins. There is no commission charged to the buyer.

There is a special training program to help newbies get started faster and find a reliable merchant. In addition, there is a special button “Find the best offer”, which greatly simplifies and speeds up bidding. Notably, on PaxFul sellers can create their payment methods, so their total number is constantly growing.

LocalBitcoins

Available Cryptocurrencies: Bitcoin (BTC)
Commissions: 1% from ad creator

LocalBitcoins is an exchange that has been operating since 2012 and has maintained its leadership position throughout that time. It allows you to make an exchange among many destinations in just a few minutes. It provides payment escrow services (escrow) for the security of each transaction. According to the name, only bitcoins can be traded here.

Of the disadvantages, note the fact that with a zero account, it is quite difficult to find a partner for the transaction. You will have to try to pump it up to gain credibility. Also, on the exchange, one can only sell or buy bitcoins (but it supports more than 200 fiat currencies).

The creator of the ad pays LocalBitcoins a commission of 1% of the transaction amount. The commission of the bitcoin network is also taken into account. There are limits on ad placement – a newbie can create no more than five bids – and two ways to set the price: exact or floating.

Cryptocurrency trading

You must be aware that blockchain and cryptocurrencies are already being used in many areas. Without a doubt, speculation is one of the most common uses nowadays. Trading usually involves making profits in the short term. Traders are constantly opening and closing positions. But how do they determine when to enter and exit a trade?

One of the most common ways to understand the cryptocurrency market is through a method called technical analysis (TA). Technical analysts study price history, charts, and other types of market data to find trades with good odds of profit.

What is the best method to buy cryptocurrencies?

Exchangers can be profitable at certain times. P2P exchange services are consistently in high demand. But the most convenient method is a crypto exchange. Top exchanges are regulated, their activity is transparent, and they have good technical support. They provide users with multi-currency wallets and different deposit/withdrawal options, including direct payment from a bank card and prompt transfer to it. Plus, they provide additional features, including stacking.

Conclusion

CoinLoan’s multi-purpose platform includes interest-bearing accounts, instant loans, and a cryptocurrency exchange using an API, giving users full control over the management of their assets.

Investing in cryptocurrencies is risky enough because of their massive volatility and lack of regulation. Investing in the altcoin/meme coin space presents an additional challenge because of a lack of differentiation and the fact that most of their value is based on frenetic trading by their fanatical followers. Here are some investing considerations for a potential investor in Shiba Inu.

Shiba Inu’s price soared more than tenfold in October 2021, giving it a peak market capitalization of $41 billion (on Oct. 29, 2021) and became one of the top ten meme cryptocurrencies by this measure. A tweet from Tesla founder Elon Musk on Oct. 3, 2021, featuring a picture of his new Shiba Inu puppy Floki provided the initial impetus for the meme coin’s price surge. Because Musk is one of the most high-profile supporters of Dogecoin and the self-proclaimed “Dogefather,” his cryptic tweets often result in heightened volatility in the cryptocurrency space.

Shiba Inu’s price surge in October 2021 resulted in it almost catching up to Dogecoin’s $36.9 billion market capitalization (as of Oct. 31, 2021), after briefly surpassing it at one point.

It remains to be seen whether Shiba Inu will indeed become “the Dogecoin killer” that its growing community of supporters—known as the SHIBArmy—expects. But at least in October 2021, the stunning price gains of this previously obscure altcoin made Shiba Inu the tail that wagged the Dog(ecoin).

Low per-token price: Even after its impressive gains, Shiba Inu (SHIB) costs a fraction of a cent, so one can buy millions of SHIB tokens with a few hundred dollars. At its peak price of $0.00007482 (on Oct. 29, 2021), $100 would have fetched you over 1.5 million SHIB tokens. Currently, at $0.00002925, $100 will buy you 3.4 million SHIB tokens, more than twice as much.

Limited utility and use case: Though its adherents may point out that Shiba Inu-based NFTs are now available, and its Ethereum base might enable smart-contracting capabilities in the future, Shiba Inu presently has very limited utility and does not have a compelling use case yet.

High volatility: Shiba Inu’s peak market capitalization of $41 billion makes it larger than many S&P 500 companies that have been in existence for decades and that have grown sales and profits for most of that time. In fact, the combined $79 billion value of Shiba Inu and Dogecoin (as of Oct. 28, 2021) exceeded the market capitalization of 388 companies on the S&P 500. On Aug. 2, 2020, SHIB was trading at $0.00000000051, so at its peak price of $0.00007482 (on Oct. 29, 2021), it has gained an astronomical 14,670,488%! This means that $1 invested in SHIB on Aug. 2, 2020, would have been worth a cool $146,705 on Oct. 29, 2021. By mid-2022 the price had fallen to $0.00001040.

That eye-popping return also means that Shiba Inu has achieved its founder Ryoshi’s objective of creating something from nothing in spades. However, those gains may likely have been driven by social-media-fueled speculative frenzy as cryptocurrency enthusiasts look for the next big thing. If the bubble bursts, retail investors who got in at the highs may be left holding the bag.

Category: Investing

What cryptocurrency to invest in