Crypto Loans Unlock Cash, but They Carry Risks – Crossroads Today

Crypto Loans Unlock Cash, but They Carry Risks – Crossroads Today

Like a house, car or other investment, your cryptocurrency can serve as collateral for crypto loans, which are loans that can have low interest rates, same-day funding and no credit check.

The downside? If your crypto’s value falls, you may need to pledge more crypto.

“That is going to be the main disadvantage of crypto,” says Travis Gatzemeier, a certified financial planner and founder of Kinetix Financial Planning near Dallas. “It’s not a normal, stable asset that you’re using to borrow.”

Despite the risks, cryptocurrency — and borrowing against it — have become popular topics on public forums like Reddit and YouTube. But is a crypto loan right for you?

What is cryptocurrency?

Cryptocurrency entered the financial dialogue in 2008, with an anonymous programmer’s white paper on the concept of bitcoin.

Bitcoin is a cryptocurrency, or a digital form of money. It
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