How to invest in cryptocurrencies with minimal risk and maximum profit (Part 3)


When the cryptocurrency market shows bullish trends, Bitcoin provides great opportunities for earnings. In this article, we share the secrets of how to more than double your profit during Bitcoin hodling. It will also be useful for you to find out how to reduce investment risks through lending on Biterest. If you are a newbie in the world of cryptocurrencies, we advise you to start with the Part 1.

How To Invest In Bitcoin With Maximum Profit?

The main use of crypto-backed loans is the profitable Bitcoin hodling. You cash in bitcoins without spending your coins. Let's look at a few strategies that our users use.

We often receive questions “Why is bitcoin indicated in the methods of obtaining if I get a loan secured with BITCOIN?”. This is not a mistake but another way to trade on investment growth. All loans on Biterest are fixed in USD but the currency for issuing loans can be any - both fiat and cryptocurrencies. Unlike fiat transfer methods, sending a loan in cryptocurrency has a number of advantages: funds come faster and cheaper, you can enter into transactions with users from any geographical location, you are relieved of worries that the account may be frozen due to exceeding the limit or unidentified funds.

When a borrower receives a loan in BTC, and the repayment amount is $1,400, then at the time of loan repayment the borrower will always have to pay back $1400 worth of Bitcoin. Repaying a loan in BTC, the borrower will pay a smaller amount than originally received due to the growth of the exchange rate. As for a lender, issuing loans in bitcoin is equally beneficial as in fiat currency, because their profit is fixed in USD.

Next we learn how to maximize the profit from hodling.

Consider a simple example: suppose you invested $10,000 in bitcoin and received a loan of $7,500. The lender sent it to you at a rate of 9,750 USD per Bitcoin, consequently you received 0.76923077 BTC. If the Bitcoin exchange rate grows by 10%, then the value of the collateral will increase by $1,000. The repayment amount then will be 0.0559441 BTC lower than the amount originally received in a loan. With a 10% increase of bitcoin value, you could earn $1,600.

And now we will use bitcoin to work further.

Andrey decided to receive another loan and collatelized $7,500. He pledged 0.7692307692 BTC ($7,500) which received from the lender and got a second loan in the amount of 5,625 USD at the rate of 9,750 BTC/USD. We gave the name to this model “Smart Hodling”.

Due to a 10% increase of bitcoin exchange rate, the repayment amount of the second loan fell to 0.5347319 BTC. Andrey paid $453 less than what he originally received from the lender. After repaying the loan, he received 0.7692307692 BTC from the collateral. Using the received collateral, he repaid the first loan, the amount of return on which decreased to 0.7132867 BTC. Again, Andrey paid around 600 USD less. Having repaid this loan, he received the collateral of 1,0256410 BTC, which has grown by 1000 USD. In total: Andrey's earnings, who used the Smart Hodling system on Biterest, reached the profit of $2,053, which is more favourable than regular hodling by $ 453.

How To Predict Profit With Smart Hodling?

To calculate how much you could earn with Smart Hodling, we created a calculator http://calc.biterest.com. In the right column of the table you need to indicate the amount of the initial investment, which you send as the collateral for the first loan, the discount percent, loan days, annual interest rate and projected BTC rate growth. The more loans you remake, the greater your final profit will be. In three days it's possible to increase the capital by 15% or more.