Bondster first to enable investors invest in loans secured by bitcoins

Bondster first to enable investors invest in loans secured by bitcoins

Bondster news
Bondster first to enable investors invest in loans secured by bitcoins

Bondster comes up with a unique solution in the field of P2P investments not only in the Czech Republic but also in Europe. From September 7 on, people will be able also to invest in bitcoin-secured loans.

The principle of investing in these loans is no different from other types of secured loans on Bondster. The only difference is in the method of securing, where instead of movable or immovable property, borrowers pledge their bitcoins.

The advantage of such an investment is that it is hedged against bitcoin price fluctuations and investors get a stable return from it every month. This way, they achieve an annual return of 10-11% with the duration of the investment being 1–12 months. Thanks to this, investors can quickly appreciate their savings and then reinvest them.

Investor protection

Moreover, investors are protected in the event the value of bitcoin on world markets falls sharply. In such a case, borrowers have to make up the difference otherwise they lose their bitcoins. Should such a situation nevertheless arise, the loan originator, which is the Czech company Acema, immediately sells the collateral on the exchange and pays investors out. Here lies one of the advantages of cryptocurrencies - bitcoin, unlike other types of collateral (e.g. real estate), can be immediately and easily converted into money.

Loans secured by bitcoins are also subject to the buyback guarantee, which is applied in the event the borrower ceases to repay the loan. In such a case, the originator pays the investors the entire amount invested, including the interest earned.

"The number one priority for us was maximum safety. The LTV * (Loan-to-Value) ratio for this type of secured loans is therefore 50-70%. At the same time, loans come with the buyback guarantee which applies both to the event of default and early termination, so that investors will not lose their money or interest. These will always be paid out to them in full, “explains Bondster’s CEO Pavel Klema.

Another opportunity to diversify investments

For investors, loans secured by bitcoins represent another opportunity to diversify investments on Bondster, where people currently find over two thousand investment loans from four continents. "A few weeks ago, we achieved the 12,000 investor milestone on the platform, and investor interest in terms of the amount of money invested in April has returned to pre-pandemic levels. In this context, I firmly believe that loans secured by bitcoins will further accelerate the growth of the investment platform Bondster, “concludes Pavel Klema.

If you want to include these investments in your portfolio, you can easily find them by the type of collateral. If you use Autoinvest, you can select the preference for these loans in its settings in the field “Collateral".

Note: * LTV (Loan-to-Value) indicates the ratio between the amount of the loan and the amount at which the pledged bitcoins were valued at the time of the loan agreement. The lower the LTV, the higher the hedging rate.

Author: Michal Rázga


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