- U.S. customers can access Bitcoin-backed loans from $75,000 to $2M.
- Bitcoin-backed loans allow customers to access cash without selling Bitcoin.
- Strike partners with capital providers to offer competitive lending rates.
Strike, a Bitcoin payments platform, has rolled out a crypto lending service on its platform. This service enables both individuals and corporate users to borrow funds with Bitcoin as a collateral asset. Strike seeks to enable Bitcoin holders to obtain liquidity without the need to sell their digital assets.
Strike Lending is only available for U.S. customers in specific states but anticipates being rolled out to international customers soon. Users can access Bitcoin-backed loans from $75,000 to $2 million based on both eligibility and the applicant’s state. Customers can borrow the Bitcoin-backed loan at a minimum annual percentage rate (APR) of 12% with no additional lending charges.
Strike’s Bitcoin-Backed Loans
Strike’s Bitcoin-backed loans allow customers to access cash and stablecoin loans without selling their Bitcoin assets. The company has collaborated with financial capital providers to provide competitive lending rates. The collateralized Bitcoin assets are transferred to a trusted third-party provider, but Strike maintains legal responsibility for the assets.
Strike Lending provides a loan repayment period of 12 months, which allows users to pay the loan in monthly installments or in full at maturation. The loan does not report to credit agencies, which reduces users’ concerns about credit scores. This makes the product more attractive to Bitcoin holders who wish to access loans and protect their credit records.
Strike CEO Jack Mallers stressed on the benefits of Bitcoin-backed loans to allow customers access to loans and retain their Bitcoin wealth. Mallers states that the Bitcoin loans would become more profitable as the Bitcoin price increases faster than what it costs to borrow. This allows users to leverage Bitcoin growth to manage debts.
Crypto Lending Market Recovery
Strike Lending product comes at a time when the crypto lending industry demonstrates development. The market has started to recover after a major setback in 2022 when several centralized lending platforms collapsed. Coinbase and Xapo have developed their lending programs, which shows renewed enthusiasm in the sector.
The crypto lending market has attracted increased interest despite the 2022 collapse. A recent report indicates that Ethereum-based decentralized lending is worth more than $34 billion. Major centralized platforms such as Tether, Galaxy, and Ledn hold a large market share.
Although Strike has encountered regulatory scrutiny over its operations in El Salvador, the firm continues to pursue innovation. The service will serve both retail and institutional clients who seek alternative solutions to conventional borrowing methods.
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