Is it a good way to earn money with bitcoin?

Is it a good way to earn money with bitcoin?

KuCoin is a bitcoin exchange and cryptocurrency based in Seychelles, which was launched in the market in 2017. Since then, its product portfolio has grown and evolved to suit users. And one of the most outstanding services that the platform has is the lending of cryptocurrencies.

Lending, in simple words, is a loan that an individual makes to another person. Normally, the borrower requests the money to make an investment and the lender expects a refund in return, all this respecting certain conditions. Some cryptocurrency platforms use smart contracts to secure debt payments.

With the KuCoin lending service you can access loans in bitcoin and other cryptocurrencies with a couple of clicks. But, before you decide if you are going to make a loan or apply for one on this platform, it is important that you take into account several factors. This was the result of the KuCoin Lending analysis.

KuCoin bitcoin exchange registration

To lend in KuCoin you must first register. Source: KuCoin.

The Rregistration it was simple and only took a couple of minutes. KuCoin gives you the possibility to register with your phone number or with an email, you choose. If you select email, you will receive a code to verify the address, as is the case with most exchanges.

As to KYC verification is optional. But if you do, you will have more benefits like higher withdrawal limits and access to leverage. To lend on KuCoin, it is not necessary to be a verified user. This is good news for those who want to access loans without sharing their personal data with large financial institutions, something that is mandatory in traditional banks and some regulated exchanges.

This is lending in KuCoin

After opening an account at KuCoin, you can now use the lending service. To do this, the margin trading function must be enabled first. The platform shows a margin trading agreement that you have to read carefully, but if you don’t know english you will be in trouble. Although Spanish was selected as the operating language, this agreement was not in the chosen language, which limits the possibilities for Spanish-speaking users.

After confirming that the document was read and the risks of margin trading are understood, the service of KuCoin lending. At first glance, all the data displayed on the screen could be a bit overwhelming, however, it is easier than it seems to apply for a P2P loan on this exchange.

Is it a good way to earn money with bitcoin?
To access KuCoin P2P lending, you need to enable margin trading first. Source: KuCoin.

When entering the lending section, three tabs are observed: lend, My Lendings Y blur. The eyelash lend is for you to make the loan, while in blur it is you who requests it.

Is it a good way to earn money with bitcoin?
You can make KuCoin loans with more than 70 cryptocurrencies. Source: KuCoin.

To be the lender, you must first select the cryptocurrency with which the loan will be made. A positive point of KuCoin is that the variety of digital assets is impressivethere are more than 70, including bitcoin (BTC), ether (ETH), tether (USDT), XRP, cardano (ADA), and litecoin (LTC).

The amount of money to be lent and the conditions are chosen. KuCoin Lending has 3 terms for the return of your money: 7, 14 and 28 days. You set the daily interest rate, and the platform will show you the estimated benefit you will get from the loan. Each user decides how long it will take to receive the refund and the profit margin that will be obtained while their funds remain in the hands of others.

Two methods to lend in Kucoin

Is it a good way to earn money with bitcoin?
KuCoin Lending allows you to generate passive income without spending too much time. Source: KuCoin.

One important thing to know is that KuCoin loans are collateralized. In order for a user to apply for a loan, he has to lock a certain amount of money on the exchange. This will serve as compensation for the lender, in case of breach of the terms by the borrower.

It is interesting that KuCoin has two ways of making loans, the traditional method and the automatic one. With the traditional one, it is the user who chooses the daily interest rate that best suits him. Now, if the interest is higher than the market rate, hardly anyone will accept the conditions of your loan. This method is ideal for those who have the time to analyze the market and calculate profits, but not for those without the experience or knowledge.

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If you don’t have time to constantly monitor the market, KuCoin has the option to Auto Lend. With this method, the platform automatically lends the user funds at the optimal market interest rate. Unlike the traditional method, you have to enter the amount of money in your account that you do NOT want to lend, the time in which the loan will be repaid and the minimum daily rate. KuCoin ensures that the system will never lend your funds at a lower rate than specified.

KuCoin makes the following warning about the Auto-lend: “Please set your minimum daily rate wisely, as a high minimum rate can negatively affect your credit earnings.” Make sure you understand all the risks of making or accessing loans through platforms such as KuCoin.

Keep this in mind when applying for a KuCoin loan

Is it a good way to earn money with bitcoin?
To apply for a KuCoin loan, you have to lock up an amount of your funds as collateral. Source: KuCoin.

Loans of this type are typically taken out to amplify the returns on your investment by margin trading. It is not like traditional loans, which can be requested for multiple purposes, be it to buy properties, pay off debts or invest. The section blur, the third tab in the loans section, It is for the borrowers.

If you are going to apply for a loan, you must have funds in your margin account, because KuCoin needs a guarantee for your lender. The process is similar to the one described above for making a loan. You have to select the cryptocurrency, the maximum daily interest to accept, the amount to borrow and the term to pay (7, 14 or 28 days).

A word of warning: the cryptocurrency market is highly volatile, which can make debt purchased in this type of digital asset particularly risky if the price fluctuates too much. Never invest more than you are willing to lose.

Is it risky to lend with KuCoin?

There is something you should be clear about investing in cryptocurrencies, as well as in any other market: there are always risks. But some types of investment are riskier than others, such as leverage loans. KuCoin claims to have a comprehensive risk control system that guarantees the protection of the funds of all parties involved in the lending.

In the cryptocurrency market, the absence of regulations is an important factor to consider when talking about loans. If the lender or borrower defaults on the terms, taking legal action will be complicated.

In the case of KuCoin, if the borrower does not have enough funds to cover their debt due to extreme market conditions, the exchange will cover the missing amount to ensure that the lender gets a full refund of your funds. If the term for the payment of the debt expires, KuCoin will automatically collect interest and capital.

Another risk is that you have to keep your funds on the platform when lending. Although KuCoin claims to be secure, no platform is exempt from hacks and theft, which is why many feel uneasy about leaving their money on online platforms.

conclusion

KuCoin Lending is an exchange service where you can earn passive income by lending money in cryptocurrencies or requesting a loan to magnify your investments. The platform has a good interface that is easy to use, as well as a wide variety of digital assets to select from.

With the option of Auto-lend it is simple to make P2P loans, as the exchange takes care of all the heavy lifting. Loan applicants must have sufficient funds in their KuCoin account for collateral. With this guarantee, the exchange ensures that, in the event of a breach of the terms by the borrower, the lender will receive a refund. And if there are extreme swings in the market, KuCoin has a fund to cover the losses and pay the lender a full refund.

When it comes to investments and cryptocurrencies, there are always risks. By having to keep your money in the exchange to access the lending service, there is a risk that the funds will be stolen in cyber attacks. Also, extreme market fluctuations can make paying down debt really complicated.

The Review

KuCoin Lending

PROS

  • Automatic loan functions.
  • More than 70 cryptocurrencies for lending.
  • It is easy to access cryptocurrency loans.
  • Lenders always get full refund.

CONS

  • You must keep your funds on the platform.
  • Legal documentation only in English.
  • It is risky to ask for loans in cryptocurrencies due to its volatility.

product analysis

  • Amount of cryptocurrencies
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  • Interface
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  • Security
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  • Easy to use
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