Bitget Exchange Announces New Cryptocurrency Lending Program

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What – Bitget has launched a new cryptocurrency lending platform allowing users to stake their tokens in exchange for getting loans in terms of another crypto asset.
Why – Bit has introduced this approach to deal with the growing demand for lending services.
What next – Bitget may likely strengthen its position as a crypto lender with the new lending approach.

Bitget, a cryptocurrency trading platform that ranks ninth in terms of market capitalization per statistics by Coinranking.com, has recently introduced a crypto lending program to meet the rising demand for crypto loans.

Bitget Ventures New Cryptocurrency Lending Program Focused on Staking

The platform has referred to this model as a dual crypto loan. Here, users will be able to stake one asset as collateral while taking another asset as a plan. In essence, it is a way for users to stake their own tokens in exchange for borrowing crypto assets.

Managing director at Bitget, Gracy Chen, has specified that this loan program opens up new avenues for borrowers to expand their investment portfolios beyond their existing coins.

She highlighted how, by collateralizing the current currency, capital utilization will increase – allowing users to do more with what remains.

Users now have the opportunity to stake less-demanded coins, enabling them to obtain loans in more liquid assets for investment purposes, he added further.

The announcement by Bitget came to light on Twitter:

🔥 Bitget Crypto Loan is LIVE!
🎁 Flexible borrowing and repayment, competitive interest rates!

👇 How to join:https://t.co/TSDNPxeBr0

Learn more about Bitget Crypto Loan:https://t.co/hOGGq7P7Eu pic.twitter.com/2cXTUWTZLF
— Bitget (@bitgetglobal) July 5, 2023

Bitget crypto loans allow the investor to stake a token as collateral to borrow another token of the same value. There is an interest rate tied to every loan – allowing users to get more funds for a fixed time in a way that increases the fund’s utility without utilizing the funds.

To get crypto loans, users need to go to the official page of Bitget and select the token they want to stake. They then add the amount they want to borrow.

That said, not every token listed on Bitget can be borrowed to be staked as collateral. For the time being, Bitget has only allowed three assets to serve both of these services – Bitcoin, Ethereum, and USDT. The official page of the platform states that it will add more tokens soon.

2022’s State of Cryptocurrency Lending Wasn’t Optimal

Crypto lending is a niche that didn’t go through a path toward growth last year.

First, it was Celsius, a bullish cryptocurrency lending institute that ended with bankruptcy shortly after the customers found that they could not their assets.

The bankruptcy was filed on July 13th, 2022, after a month-long battle of trying to salvage the situation.

Then came FTX’s downfall – which was more painful for the majority of the crypto space because of the image SBF has fostered among crypto traders. His approach to “effective altruism” made him a favorite among social media. But it all came crashing down in the last quarter of 2022 when the crypto space found that most of FTX’s liquidity was being maintained by its native token – FTT.

BlockFi was one of the respected crypto lenders that was also caught up in the storm whipped by FTX’s wrongdoings.

But the big one that made the most news was Three Arrows Capital (3AC) – a crypto hedge fund company that fell soon after the fall of Terra Luna in May 2022, losing billions in the process.

Other failures include Voyager Digital, which fell as a result of the downfall of 3AC.

Interesting tidbit here, FTX US was set to bail out Voyager Capital during that time. Predictably, it didn’t come to pass.

While these incidents paint a grim picture of the state of crypto lending last year, there were success stories as well.

NEXO became a prominent lending company during that time. Part of the reason it retained its strong standing was due to its partnership with Fidelity in 2021.

In the wake of Celsius’s bankruptcy, Nexo demonstrated its commitment to avoiding risky loans on a massive scale, distinguishing itself from its competitor.

Bitget is following that same trail of strategic partnerships and new additions to the official platform in hopes of providing more value in the market.

Bitget Establishes Strategic Partnership with STX

In a move to strengthen its market standing, Bitget has unveiled a strategic alliance with Space and Time (SxT) to create a decentralized data warehouse.

.@bitgetglobal is the first centralized exchange to leverage a decentralized data warehouse 🙌 pic.twitter.com/c8KN1zmnr4
— Space and Time (@SpaceandTimeDB) March 27, 2023

This partnership aims to establish an unalterable audit trail to ensure the integrity of all transactions.

Bitget Brings New Cryptocurrency Lending Program

Bitget has also introduced a dedicated “proof of reserves” section on its website, offering users enhanced visibility into the platform’s asset holdings.

Conclusion

Bitget has introduced its new cryptocurrency lending program at a time when the demand for cryptocurrency loans has increased. And that demand has increased not just due to the failure of crypto lending services in the past but also due to recent issues with traditional financial institutions – such as the Silicon Valley Bank.

So, the timing could help Bitget maintain a strong position in the market. That said, we now must watch how this new lending service performs – and how the community responds to it.

So far, the reception towards the tweet about this info that Bitget made has been lukewarm. But that may be due to only three cryptocurrency assets being available for lending for now. We will likely see more news as Bitget adds more assets to the lending list.