Messi-backed Bitget joins crypto exchanges offering crypto loans
Cryptocurrency derivatives exchange Bitget is the latest platform to roll out an in-house cryptocurrency lending service for its users.
The Seychelles-based exchange launched its native Crypto Loans product, delivering interest payouts to users that deposit cryptocurrency through the platform’s new offering. The service is touted to payout interest payments from lending pools, while lenders can deposit and redeem loaned tokens without lock-up periods.
Bitget said the new offering caters to a growing audience of users who may be hesitant to rely on traditional credit institutions and are instead interested in exploring alternative funding options using digital assets.
Bitget’s Crypto Loans product employs a “dual-coin” mechanism, enabling users to utilize one cryptocurrency from their holdings as collateral and borrow an equivalent value in a different coin of their choice.
When availing a loan through Bitget’s Crypto Loans, users stake a specific cryptocurrency as collateral, and the amount they can borrow is determined by the current market value of their staked asset. The loan carries a defined interest rate that users are required to repay within a predetermined timeframe. Users have the flexibility to choose whether they want to repay the loan before or at the agreed-upon deadline.
The dual-coin model of Bitget’s Crypto Loans product enables users to access liquidity while diversifying their portfolio. This approach is particularly appealing to investors seeking alternative means of funding and those who wish to maintain their exposure to multiple cryptocurrencies.
Meanwhile, borrowers on Bitget’s exchange can take out loans to tap into funds for various trading options on the platform. Borrowers must post an equal or greater market value of collateral assets in relation to the loan amount to safeguard lenders’ investments.
A statement from Gracy Chen, Managing Director of Bitget outlined the exchange’s intent to offer users a means to generate returns. “Bitget’s new product highlights the flexibility of collateralized currency usage, enhancing capital utilization. Users now have the opportunity to stake less-demanded coins, enabling them to obtain loans in more liquid assets for investment purposes. Our platform’s flexible borrowing and repayment mechanism is designed to cater to the needs of all users, accommodating their requests and ensuring convenience,” he added.
Bitget has unveiled a simplified loan process designed to enhance user onboarding and replicate the familiar procedures found in traditional financial institutions. The transaction begins with users staking collateral from their cryptocurrency holdings. Once staked, Bitget automatically disburses the loan funds to the borrower.
Additionally, borrowers can adjust their collateral positions during the loan duration, adding or withdrawing collateral based on their individual circumstances and requirements.
Bitget made headlines in October when it signed the world-renowned soccer player Lionel Messi to become its brand ambassador. Part of his responsibilities is to further introduce Bitget to users, brands, and to organizations worldwide.