Bitget launches crypto loans product despite 2022 troubles in the sector

Quick Take

  • Bitget has entered the cryptocurrency loan market, catering to users seeking alternative means of funding via digital assets.
  • The platform’s dual-coin approach allows users to stake one digital asset as collateral and borrow a corresponding amount in another asset.

Crypto derivatives and copy trading platform Bitget is making a foray into the cryptocurrency loan sector by introducing its Crypto Loans product.

Bitget aims to attract users dissatisfied with traditional credit institutions by offering an alternative funding solution backed by cryptocurrencies, according to a statement. Its Crypto Loans product follows a dual-coin approach, enabling users to stake one digital asset as collateral and obtain a loan in another. 

Bitget argues crypto loans have been gaining popularity in recent years thanks to an overall digital lending sector that surpassed $8.5 billion in 2022, with a compound annual growth rate of 20.5%, according to a report from Global Market Insights.

However, the crypto loan sector, in particular, suffered significant setbacks after a tumultuous 2022 for centralized crypto lending services — a year that saw the collapse into bankruptcy of firms like Celsius, BlockFi and Voyager Digital. It remains unclear the extent to which users will trust such services going forward.

Streamlining the crypto loan process

Bitget says it has streamlined the loan process, replicating a more familiar process found in traditional finance to ease user onboarding. The borrowed amount is determined by the market value of the collateral staked and is automatically disbursed, with each loan issued at a specific interest rate. Borrowers can utilize the funds as needed and adjust the collateral based on requirements. Users have the option to repay the loan before or at the predetermined deadline.

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Bitget also said support for withdrawals and a swift review process on loan applications would encourage users to use the platform.

"Users now have the opportunity to stake less-demanded coins, enabling them to obtain loans in more liquid assets for investment purposes,” Bitget Managing Director Gracy Chen said in the statement. “Our platform's flexible borrowing and repayment mechanism is designed to cater to the needs of all users, accommodating their requests and ensuring convenience.”

In March, Bitget acquired a controlling stake in the crypto wallet BitKeep — rebranded as Bitget Wallet — with an additional $30 million investment at a $300 million valuation. At the time, BitKeep claimed to be Asia’s largest crypto wallet, with 9.5 million users, while Bitget says it has 8 million users. 

Bitget also unveiled a $100 million venture fund in April, following a $10 million investment from Dragonfly Capital.

 


© 2023 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

About Author

James Hunt is a reporter at The Block, based in the UK. As the writer behind The Daily newsletter, James also keeps you up to speed on the latest crypto news every weekday. Prior to joining The Block in 2022, James spent four years as a freelance writer in the industry, contributing to both publications and crypto project content. James’ coverage spans everything from Bitcoin and Ethereum to Layer 2 scaling solutions, avant-garde DeFi protocols, evolving DAO governance structures, trending NFTs and memecoins, regulatory landscapes, crypto company deals and the immersive metaverse. You can get in touch with James on Twitter or Telegram via @humanjets or email him at [email protected].

Editor

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