Despite the general chart of the upswing trend of the cryptocurrency as a whole, it is periodically drawn down by corrections, or the news affecting the market in the background.According to CoinMarketCap, the price of Bitcoin has been volatile by more than 20% during the last week (14-20 June 2021). Meanwhile, altcoins have lost about 30-40% on average due to massive bans in China as well as cancellation of BTC acceptance by several corporations.
This is exactly the case why and how crypto loans can help you to accumulate more funds while the market is bearish.
Shorting: What is it?
Shorting is understood as with the aim of capitalizing on the reduced cost of activation. If you believe that any asset will become cheaper, you sell assets on the exchange and wait for a price downswing. If the dump occurs, you earn the difference between the prices while selling and buying assets back. It can be done multiple times depending on the market condition.
For example, on Monday June 21. the BTC price dropped below the $34,000 level. This kind of the market drawdowns could be used for shorting.
A real example of getting profit with a bear crypto loan
2. The price of Bitcoin at the time of getting the loan is $35.000. You sell or exchange 0.75 BTC at this price. For such sell you get around 26.250 USDT
3. A month and a half later, during the cryptocurrency market continuing downswing, the price of BTC dropped to $25,000.
You buy more BTC at this rate – for 26.250 USDT you get 1.05 BTC
4. With such market move you earn 0.3 BTC difference from the moment of you getting the loan from CoinRabbit.
5. Now you want to close the loan and bring back your deposit.
6. The annual loan interest rate is 10% (APR). Since you paid off the debt in a month and a half, the interest accumulated is just 0.0125 BTC.
7. You send the repayment amount for your loan to CoinRabbit which is 0.7625 BTC and get back the 50 000 USDT deposit.
8. Total profit is 0.2875 BTC (that is 9.528$ at the moment). You can sell it or hold it and wait for the right moment.
How to get bear crypto loan on CoinRabbit
If you think the market is about to fall and you are ready to short, then bearish loans with unlimited time frames are perfect for you. With the help of crypto loans, you sell the received currency, catch the dump and buy the same currency. Next, you take the profit and pay off the loan.
- To take a crypto loan, you should navigate CoinRabbit website and select the “Loans” option.
- Next, choose the loan amount you’d like to get.
- After it, you will need to specify your wallet address and add your phone number/email to be able to track the status of your loans later.
- Next, you have entered the number, you will receive an SMS/email verification, you just need to enter the verification code.
- After confirmation, you will have a CoinRabbit address to send your deposit in stablecoins (USDT / USDC).
- Further, comes several processing checks of the receiving funds. The whole process of getting the loan takes about 10-15 minutes. As easy as that.
CoinRabbit Bear markets loan conditions.
- No verifications or KYC
- Unlimited time frames. You can withdraw your deposit at any time
- No maximum amount of the deposit
- We accept USDT ERC20 (Tether) and USDC Coin
- From just 100 USDT/USDC loans to be able to try out the short strategy on a small amount
- Annual Interest Rate – 14% APR. You can pay it at any time when you decide to close the loan.
- You can increase your deposit amount anytime to increase the liquidation price and minimize the risk
- You can bring your deposit anytime by paying off the repayment price. This usually takes about 20-30 minutes.
- If significant increase of the price happens, you will receive several warnings of a possible liquidation
Shorting the crypto market has several risks. If you sold the assets but the price goes up — you are losing the funds. On top of it, you risk falling into the liquidation zones which are fixedly provided for on exchanges in this case, the client can lose much more than he has.
But bear market loans at CoinRabbit gives you flexibility, convenience, unlimited time frames and increased safety for your funds to be liquidated. Also, you can always react to changes in the market conditions and change your strategy by increasing or returning your deposit, while minimizing your losses.
Not financial advice. Do your own research and take everything moderately.
Terms of deposits might be changed. Stay tuned.