IS BITCOIN LENDING PROFITABLE?

Bitcoin had recovered over 50% after their last week's crash at US$1,800.00. Who ever took this opportunity to buy some Bitcoins, I'd say CONGRATULATIONS! Now, besides buying and selling Bitcoin, there is another way to earn more Bitcoins! OK, you may nag me about buying mining rigs or cloud mining contracts again, but let me promise you this, I'm writing this article with no intention to up sell you any mining machines or cloud mining contracts. Now, there's this trick to get your Bitcoin start working for you and that would be lending your Bitcoin at a settled interest rate. In this article, I'll guide you where to lend your Bitcoins safely and get your Bitcoins back with interest paid.

DISCLAIMER: The proceeding article written is solely base on the contributor's experience of the product and deem useful for the audience. No marketing affiliation are involved in this article to promote or to market the products of  any company related to Bitcoin or any other cryptocurrencies. Please note that this disclaimer is only applicable to this article and does not apply to any other or future article released. Each article will hold its own disclaimer statement accordingly for audience awareness of the purpose of the article published.

So, I heard that you want to lend your Bitcoins, but you are afraid that no one will pay you back right? No worries mate, let me introduce you to Poloniex. Poloniex offers a range of service which are mainly on cryptocurrency exchange and margin trading. What's cool about Poloniex is that the margin trade provides traders the opportunity to borrow Bitcoins from Poloniex's users, creating the supply and demand for Bitcoins. Hence, Poloniex provided a lending service for the users to get their Bitcoin working for them. 

POLONIEX EXCHANGE

POLONIEX MARGIN TRADE

POLONIEX LENDING

So, how do we get started, first of all of course you need to register an account with Poloniex first. After successfully registering your account, you can deposit your bitcoins through the function available 'DEPOSIT/WITHDRAWAL' under the 'BALANCES' tab. Once your page is directed as shown below, you can now click on 'Deposit' link at the Bitcoin row. If you are depositing other cryptocurrency, make sure to click 'Deposit' on its individual row.

Now, once we are done with the Bitcoin deposit, click the 'BALANCES' again and select 'TRANSFER BALANCES. You will see your available balance shown in the 'Exchange' column. If you don't see your balance yet, check your blockchain transaction confirmation. Most of the time you will need to wait for 3 - 5 confirmations till your balance is credited into your account. Key in the amount that you want to transfer from 'Exchange' account to 'Lending' account. Once you had done that, click on transfer.

You have your Lending account credited with the amount of Bitcoin that you want to lend. That's GREAT! However, at what interest rate should we be using? Here's a great place to benchmark for the daily lending interest rate here. At this time of writing, we can see from the list that Poloniex average lending rate till date is at about 0.067% daily, which my normal lending interest rate is adjusted at 0.065%. You may go lower than that, which you will normally see about 0.03% at Poloniex lending supply. Don't ever do that as they are just being market spoilers. I can confirm you that 0.065% is the best rate to enter, not only there is still demand for such rate everyday, you can also profit twice the amount from those market spoilers!

AWESOME! Now you know which interest rate should you offer. So, lets get back to Poloniex and finish up the rest and get your Bitcoin lending started! Click on the 'LENDING' tab. You will see this section called 'OFFER BTC'. We shall enter the interest rate at 0.065% and the minimum amount valid to lend Bitcoin is 0.01BTC. Anything below that amount will not be accepted by Poloniex system.  As for the lending duration, just keep it at 2 days. I haven't tried anything beyond 2 days and not interested to do so. It is good to have your profit and interest paid back as soon as possible right?

Once you've made an offer, your lending offer will be displayed under 'MY OPEN LOAN OFFER'. Too bad I can't show an example of it as my available balance is not enough for an open loan. It will take a moment until you loan is activated automatically by the system. At that position, your loan will be displayed at 'MY ACTIVE LOAN' instead. Take note that there is a 'Fees' column at your active loan. This 'Fees' is to be paid to Poloniex as service charges at 15% of your interest rate earnings. Also, you may want your loans to be renewed automatically so that you won't have to keep an eye of your loan account every hour. Just login once a day to check and update what's needed. You may adjust your interest rates higher or lower according to the market demand, but not too low which is anything below 0.05%.  

Under the 'LOAN OFFERS' and 'LOAN DEMANDS' section, it displays all the available information in the Poloniex system making it transparent for everyone to know the current market and supply demand for Bitcoin demand for trades and lending offers. 'LOAN DEMANDS' do not supply any useful information for us, however we should keep and eye on 'LOAN OFFERS' to adjust our interest rates to meet with demand. 

So, isn't it profitable to lend your Bitcoin 0.05% - 0.065% daily? 

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