Asian Startup Offering Machine-Backed Loans to Bitcoin Miners
Babel Finance is now making life easier for bitcoin (BTC) miners and other crypto market participants. The Hong Kong-based firm is now accepting mining machines from bitcoin miners as collateral for USD loans, according to reports on January 12, 2021.
Machines for USD Loans
Babel Finance, a Hong Kong-based cryptocurrency financial services provider that claims to be focused on building a sustainable financial infrastructure for the cryptospace and make it easier for the average joe to access crypto-based financial product, has rolled out a fresh service designed to make life easier for bitcoin miners.
Per sources close to the matter, bitcoin (BTC) miners interested in obtaining USD loans from Babel Finance can now put up their mining machines as collateral. Notably, the loan-to-value ratio for the loans is just 30 percent, instead of the 160 percent the firm normally charges. This is because the entire crypto mined via the machine used as collateral will be under Babel’s custody until the miner repays the borrowed funds.
Bitcoin has been on a serious bull run since late 2020, and the value of the world’s flagship crypto has continued to surge this year. During bull markets, miners tend to hodl their freshly mined coins in a bid to make maximum profits when prices skyrocket.
And without selling off the mined coins, accessing cash to pay for daily expenses becomes a herculean task. However, with the help of Babel Finance, miners can now eat their cake and still have it!
Commenting on the firm’s innovative offering, Lei Tong Babel’s managing director of financial services said:
“Mining machines are bitcoin miners’ biggest assets. After the March 12, 2020 price drop, they really wanted to keep as many coins as possible. Putting their machines up as a mortgage is a much better way for them to get loans versus using bitcoin (BTC).”
Steady Progress
Launched in June 2020, Babel Finance says its primary objective is to help Chinese miners compete with large firms in the Western world who have the power to purchase sophisticated machines.
To make the business a huge success, Babel has joined forces with some heavyweights in the cryptospace, including Spark Pool, a leading ETH mining pool, F2Pool, one of the largest bitcoin mining pools, and several other crypto market participants.
The firm claims it has accumulated $22 million worth of machine loans since its launch last year, representing five percent of its $450 million in outstanding loans. In the near future, Babel aims to allow miners to use their machines to hedge against negative price volatility.
