Onramp Teams Up with Arch to Launch Bitcoin-Backed Lending Service
In an exciting development for the cryptocurrency community, Bitcoin financial services firm Onramp has announced a partnership with lending platform Arch to introduce a new bitcoin-backed lending service. This innovative offering allows Bitcoin (BTC) holders to secure loans while maintaining ownership of their digital assets, catering to investors eager to access liquidity without the need to sell their bitcoins.
The newly unveiled product enables users to obtain bitcoin-collateralized loans, where borrowers can leverage their Bitcoin holdings as collateral to receive cash or stablecoins in return. This approach not only helps borrowers maintain their investment in Bitcoin but also allows them to sidestep capital gains taxes that would typically arise from selling their assets. Furthermore, by keeping their bitcoins, borrowers can continue to benefit from any potential appreciation in value, making this an attractive option for many.
With Arch specializing in asset-backed loans, they will oversee the underwriting and distribution of these loans, ensuring a seamless experience for users. Meanwhile, Onramp, which is dedicated to providing comprehensive bitcoin financial solutions, plans to integrate this lending service directly into its platform. This integration will make it accessible to users who are seeking alternatives to traditional financing methods.
The trend of bitcoin-backed lending has been gaining traction, particularly in this market cycle, as it serves as a viable alternative to conventional loans. This option is especially favored by long-term Bitcoin holders who are keen to retain their assets while still addressing their liquidity needs. The model has found applications across various financial scenarios, from personal liquidity requirements to more extensive institutional financing strategies.
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