Bitget has announced plans to roll out its crypto lending service to allow users to stake their digital currencies in order to secure loans in other coins. The company says the service is designed for borrowers not satisfied with the available traditional lenders.
While making the announcement, Bitget managing director Gracy Chen said the exchange’s crypto lending service will give users a chance to stake coins that have less demand to secure loans in liquid crypto assets for the purposes of investment.
Bitget’s users who will utilize the platform’s crypto lending service should be aware that each loan will attract a certain interest rate, and the amount of loan to be obtained will be determined by the staked collateral’s market value.
Staking is not a new concept in blockchain technology. Ethereum is one of the many networks that allow users to stake their native tokens, ETH in this case, in exchange for rewards. Staking is an attractive venture for passive investors.
Crypto Lending Market Statistics
Meanwhile, Bitget’s latest move comes at a time when the crypto lending space is witnessing massive growth. Recent data from Allied Market Research showed crypto lending market size reached $12.5 billion last year. The research company also anticipated that the market would grow to $70 billion in the next ten years. Another report from Global Market Insights suggests that the crypto lending market value will be $60 billion by 2030.
Also read:Crypto loans usually take a few minutes to be approved. By contrast, securing a loan from a traditional financial institution may take weeks. However, crypto lending carries several risks, including fraud and hacking risks. In addition, the digital asset lending sector has seen several massive failures in recent months.
For example, in June 2022, crypto lender Celsius was forced to file for Chapter 11 bankruptcy protection after encountering liquidity problems that led to the suspension of customer withdrawals. A few months later, another crypto lender BlockFi, failed. In January, Genesis became the first crypto lender to file for bankruptcy this year.
Despite the setbacks, numerous success stories have been created in the crypto lending industry. For example, two years ago, one of the world’s largest asset managers, Fidelity, announced its partnership with cryptocurrency lender Nexo, aiming to provide digital asset loans to institutional investors.
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