Bitcoin Millionaires Turn to SALT for Liquidity

Bitcoin Millionaires Turn to SALT for Liquidity

SALT Lending offers a peer-to-peer lending platform that allows cryptocurrency holders to use their Bitcoin and Ethereum as collateral for loans. Blockchain technology benefits both lenders and borrowers on the platform by eliminating many of the complexities and inconveniences of traditional lending. Further, lenders can earn high interest even when the market is down, and borrowers can leverage their assets without having to cash out.

A Peer-to-Peer Lending Platform

Dave Carlson, who runs a cryptocurrency mining operation in Washington, has used SALT for this very purpose. With electricity expenses running as high as $250,000 per month, Dave needed $1 million to cover operating expenses for Giga-Watt, his mining operation. However, the potential for a price surge made him reluctant to exchange his cryptocurrency for cash.  He found an alternative in SALT, which The Wall Street Journal has reported is helping Bitcoin millionaires “unleash their fortunes.”

SALT is a lending platform that started providing blockchain-backed loans in 2017, after two years of development. In simple terms, cryptocurrency is used as collateral to secure a loan. Interest rates on the loans range from 12 percent to 22 percent, and SALT lends against collateral in Ethereum and Bitcoin. At present, SALT offers 36-month loans, where borrowers can receive up to 60% of the value of their collateral.

The market downturn however, has provided another use for the platform: helping Bitcoin millionaires earn high interest rates on their cryptocurrency holdings.

The Benefits of Blockchain Lending

Cryptocurrency brings numerous advantages to lending. First, online transfers are made instantly within a secure P2P lending platform. Secondly, funds are instantly accessible, which means that the lender can instantly start earning interest. Blake Cohen, a former real estate executive and founder of SALT, told TechCrunch that cryptocurrency is a perfect fit with traditional, collateral-based lending:

“Cryptocurrencies and blockchain assets make the ideal collateral. In typical asset-backed lending the assets need to be located, seized and liquidated for lenders to be made whole. With cryptocurrencies, all of these problems go away.”

Borrowers benefit from the SALT platform as well. There is no requirement for a credit history check, and loans can be customized. Borrowers can also get verified on the same day as the application is submitted; if there is enough cryptocurrency to serve as collateral, then the loan is secured.

Cohen is optimistic about the future of the company. He says that now that the concept is proven, there is more scope for institutional investors to get involved:

“Basically the money that we put in is as a proof of concept to entice the institutional capital providers to get involved with this […] This point is to one, demonstrate that there’s a market for this, and two, that you can do this and make risk palatable to the lender.”

The post Bitcoin Millionaires Turn to SALT for Liquidity appeared first on BTCMANAGER.

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