In a nutshell, Crypto lending is simply the process of borrowing digital assets through Cryptos exchanges or other lending platforms with no interest at all. For the past couple of years, Crypto lending has gathered some considerable amount of attention from mainstream financial institutions and now is increasingly being a mainstream topic in investment banking and institutional lenders. This is because it provides investors with an opportunity to buy low and sell high without depending solely on banks.
Basically, this means that if you want to invest in anything that’s fiat money (like stocks), you are more or less limited to buying one at a time. If you plan to buy several stocks in different companies and then sell them, you would have to wait for a while before you can make a profit.
Fiat cash is more stable. With Crypto lending you don’t have to wait for a couple of months before you can sell your digital asset. You can make a quick profit, sell and then start the process all over again the next day.
Buying in low and selling in high is another benefit. With fiat money there are so many factors that can influence the prices of an asset. These include interest rates, government stimulus programs, and even economic news. While fiat money is always relatively stable, investing in Cryptos currencies allows you to capitalize on these fluctuations.
Fiat money doesn’t have an easy expiration date. As mentioned, Fiat money is not backed by any tangible asset. Unlike in the case of other financial instruments like bonds and stock, once a coin has already been issued, there’s no real way to make a good return on it. This is because no bank or lender can just take it back and resubmit it to the public.
There’s no such thing as fiat money. The value of the currency is not a guarantee of its value in the future. Therefore, the only way to guarantee the value of your assets is to buy them when they are low and sell them when they’re high.
That’s where smart people come in. They buy a digital asset at a low price (such as a digital certificate) and then sell it for a high price (such as another digital certificate.
It’s also possible to invest in Forex trading, but I will not cover that in this article. Hopefully you enjoyed my quick overview of what Crypto lending is.
There are some drawbacks to Fiat money. For one, it’s very unstable. When you purchase a certificate, it’s pretty much guaranteed that your money will be lost. If the economy crashes, you’ll have no collateral to trade on.
In addition, the government’s intervention is not necessarily favorable. Many countries are trying to make it so that their currency isn’t as attractive to investors. This is done by reducing the amount of cash in circulation and increasing the number of digital certificates in circulation.
Lastly, many consider Fiat money to be quite expensive for its stability. However, in the case of the United States, we’ve been in a very stable economic environment for years, making it a good choice for some.
In the end, if you’re considering investing in Crypto, you need to consider how it compares to fiat money. If you look at the current market, you’ll see that it’s not that great a deal for the average investor.
In conclusion, I hope this has shown you why investing in the currency of your choice should not be a gamble. There are better ways to get in and out of it.