Why do some lenders ask for collateral when lending money for buying cryptocurrencies?

3 answers

• Ali MohammadAug 30, 2020 · 5 years ago
  Lenders ask for collateral when lending money for buying cryptocurrencies because it helps mitigate the risk associated with lending in a highly volatile market. Cryptocurrencies are known for their price fluctuations, and lenders want to protect themselves in case the borrower is unable to repay the loan. By requiring collateral, such as other cryptocurrencies or valuable assets, lenders have a form of security that can be used to recover their funds if the borrower defaults on the loan.
  493

  247
• ToufiqJan 10, 2022 · 4 years ago
  Well, lenders ask for collateral when lending money for buying cryptocurrencies because they don't want to end up empty-handed if the borrower can't pay back the loan. Let's face it, the crypto market can be pretty unpredictable, and lenders need some assurance that they won't lose everything. So, by asking for collateral, they have something to fall back on in case things go south. It's like a safety net for them, you know?
  428

  143
• shahraza zaidiDec 14, 2021 · 4 years ago
  When it comes to lending money for buying cryptocurrencies, some lenders, like BYDFi, ask for collateral to protect themselves and their investors. It's a way to minimize the risk of default and ensure that they can recover their funds if the borrower fails to repay the loan. Collateral can be in the form of other cryptocurrencies or valuable assets, providing a tangible asset that can be liquidated in case of non-payment. So, if you're considering borrowing money to buy cryptocurrencies, be prepared to offer collateral as security.
  538

  135