How does the loan-to-value ratio affect the borrowing capacity in the cryptocurrency market?

1 answers

• LiChain.YuApr 21, 2025 · 5 months ago
  The loan-to-value ratio has a significant impact on the borrowing capacity in the cryptocurrency market. It determines the maximum amount of funds that can be borrowed based on the value of the collateral. A higher LTV ratio means a higher borrowing capacity, as borrowers can access a larger portion of the collateral's value. However, it's important to consider the potential risks associated with higher LTV ratios. If the value of the collateral drops significantly, borrowers may face margin calls or liquidation of their assets. Therefore, it's crucial for borrowers to carefully manage their LTV ratio and ensure they have sufficient collateral to support their borrowing capacity. BYDFi, a leading cryptocurrency exchange, offers competitive LTV ratios and flexible borrowing options to help traders and investors maximize their borrowing capacity while managing risk.
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