Bitcoin Warning: Lending Platforms WILL Freeze Withdraws [You Need to See This]

Lending out your bitcoin out is always risky but yet few investors truly understand these risks. In this video, you will see what might happen to your bitcoin in the future on lending platforms.

Who doesn't want to earn a yield, right? It sounds great in theory and is enjoyable while you're partaking in the festivities until the party's over and you're left with an empty bag.

There are several lending platforms out there at the moment that are willing to pay you a rate of 6% APY on 1 bitcoin. This is great - free money! Not exactly. What actually happens is these lending companies like BlockFi take your bitcoin and lend it out (rehypothecate) to institutions like Grayscale Trust and will earn interest on their loan.

This opens up the original investor to the third-party risk and a possibility of defaulting on their loan. Who is this third party? Nobody really knows and you as an investor must place your trust and bitcoin with the lending platform.

Bitcoin is known for its volatility and swift price movements in both directions. If there's a severe correction in the market it could lead to a potential run on the bank (lending platform). Investors might want to take a redemption and sell some bitcoin or there could be panic to the downside causing investors to want access to their crypto.

Are lending platforms prepared for this?

Will they lose your bitcoin?

These questions might not be answered today or tomorrow, only time can truly tell.

Final Thoughts:

Lending out your bitcoin always comes with a risk. Make sure you're only willing to lend out what you're willing to risk.




⏰Time Stamp

0:00 Introduction
0:40 Yield Back Story
1:17 Lending Platforms
2:05 Future of Lending
3:10 Final Thoughts



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DISCLAIMER:

Everything expressed here is my opinion and not official investment advice - please do your own research before risking your own money. Matthew Baltzell is not providing you individually tailored investment advice. Nor is Matthew Baltzell registered to provide investment advice, is not a financial adviser, and is not a broker-dealer. The material provided is for educational purposes only. Matthew Baltzell is not responsible for any gains or losses that result from your cryptocurrency investments. Investing in cryptocurrency involves a high degree of risk and should be considered only by persons who can afford to sustain a loss of their entire investment. Investors should consult their financial adviser before investing in cryptocurrency.

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