Crypto Lending

Crypto lending is where investors loan digital currencies to borrowers in exchange for interest payments or dividends, typically through an online platform or app. For token holders, crypto lending is seen as a way to generate passive income while for borrowers, it can be less complicated than getting traditional loans from banks.

In this guide to crypto lending, we explain how different services work, what to look for in an online crypto lending platform, and the associated risks for both loaners and borrowers, from taxes to regulations.

Best Crypto Lending Platforms

#1 - CEX.IO

CEX.IO is one-stop-shop for crypto investors where you can buy and sell popular digital tokens, speculate on prices with margin trading and earn rewards through staking. Since it launched in 2013, more than five million traders have deposited over $7.5 billion. CEX.IO is registered with the FinCEN in the US and the GFSC in the EU.

"CEX.IO will serve a range of crypto investors looking to buy, sell, trade, hold and earn. The tiered pricing structure will appeal to active traders while rookie investors will enjoy the straightforward platform interface and excellent education."

- DayTrading Review Team
  • Instruments: Crypto
  • Regulator: GFSC
  • Platforms: TradingView
  • Min. Deposit: $20
  • Min. Trade: $1


  • 24/7 support with fast response times during tests
  • Low minimum deposit of $20
  • High quality educational materials through the University


  • Limited regulatory oversight
  • No demo account
  • High deposit and withdrawal fees

#2 - Nexo

Nexo is a crypto trading platform that also acts as a gateway to DeFi crypto functions such as staking, borrowing and lending. The platform supports 60+ crypto tokens, which can be purchased with a fiat on-ramp and traded in 500+ market pairs. The exchange operates a zero-fee policy allowing a set number of completely free withdrawals per month and fee-free trading.

"Nexo is good for traders who want a straightforward way to access DeFi crypto markets and earn interest on their digital assets."

- DayTrading Review Team
  • Instruments: Cryptos
  • Regulator: ASIC, FCEN
  • Platforms: Own
  • Min. Deposit: $10
  • Min. Trade: $30


  • 2 factor authentication for added security
  • Referral program with $25 in BTC
  • High-yield interest savings


  • Limited free cryptocurrency withdrawals
  • Native tokens are required for maximum interest rates
  • Relatively small selection of crypto tokens which misses newer altcoins

#3 - Gemini

Gemini is a crypto exchange offering 90+ cryptocurrencies, a native stablecoin and derivative trading via perpetual swaps. The two proprietary platforms will suit beginners and experienced traders, execution is fast with low slippage and fees are competitive.

"Gemini is a great platform for traders looking for a straightforward way to trade crypto derivatives in a secure environment."

- DayTrading Review Team
  • Instruments: Cryptos
  • Regulator: NYDFS, MAS, FCA
  • Platforms: AlgoTrader, TradingView
  • Min. Deposit: $0
  • Min. Trade: 0.00001 BTC


  • High security with 2FA a requirement for all crypto investors
  • The app has a high-end design and intuitive interface
  • There is a wealth of education, guides and tutorials suitable for both beginners and novice investors


  • There is a 3.49% card deposit fee
  • Some of the top coins by market cap are not available to buy through Gemini
  • Trading on margin is not supported

Crypto Lending Overview

Token holders are increasingly looking for access to fiat money by leveraging their crypto supply. Fortunately, holders of cryptocurrency can borrow physical money such as USD, EUR, and GBP or lend their digital assets in return for interest payments. Crypto lending is available on dozens of popular coins and stablecoins, including Bitcoin and Tether.

Lenders and borrowers are connected via an online platform or exchange such as Binance, Kraken, and Coinbase. Platforms act as a third-party and intermediary, managing the transaction between the borrower and lender.

What is crypto borrowing

The two primary crypto lending strategies are centred around:

  1. Stablecoins – these tokens are typically pegged to a major fiat currency, such as the US Dollar, bringing some stability to an otherwise unpredictable market. Stablecoins are generally considered the lower risk option.
  2. Traditional cryptocurrencies –  well-known cryptos and altcoins are usually more volatile and therefore the amount of interest you can earn can be unpredictable. This strategy suits those with a larger risk appetite.

Some investors also use crypto lending to capitalise on interest rate arbitrage. This is where you borrow an asset from one platform and lend it out on another at a higher price, profiting from temporary price discrepancies.

Crypto Lending For Investors

Investors can deposit their digital currencies into wallets on crypto lending platforms and receive weekly or monthly interest payments. Lending interest rates vary but can range from 3-7% for Bitcoin. Interest rates for more stable assets can be much higher, sometimes up to 17% for coins like USD Coin (USDC) and Binance USD (BUSD).

The worry of borrowers not repaying a loan is somewhat reduced with crypto lending as borrowers must stake between 25% and 50% of their own coins as security for the loan.

Crypto Lending For Borrowers

Crypto lending also allows you to borrow physical money so you can avoid selling your digital assets. Borrowers could be individuals or businesses looking for a temporary loan.

Generally, borrowers can use either crypto or fiat assets as collateral to secure a loan. Those borrowing against crypto assets normally need to ‘overcollateralise’, meaning they will need to lock up more than the overall value of the funds they are borrowing. Once you have paid back the loan, plus the incurred interest, the crypto collateral is returned. The key risk to highlight is the danger that the crypto collateral depreciates in value.

Crypto Lending Rates

Providers charge borrowers interest fees on their loans. Each crypto lending site will also have its own mark-up to take into account. Charges vary, but firms are fairly transparent about the fee structure at the sign-up stage.

The typical annual percentage yield (APY) for stablecoins is 10% to 18% while for standard cryptos, it’s 3% to 8%. The Kucoin exchange has even offered an APY of more than 25% for users lending cryptocurrency.

Note, if you don’t pay back your crypto loan, lenders can liquidate all or part of your collateral to recoup their losses. Also, collateral can be liquidised because of an unmet margin call—where platforms inform borrowers that they need to increase their collateral due to a change in the value of cryptos.

Low crypto lending rates

Pros Of Crypto Lending

Crypto lending has advantages for both borrowers and lenders:

  • Easy access – you don’t need a bank account or credit check to start crypto lending or borrowing
  • Automated – minimal effort is required with many crypto lending platforms. Simply activate the bot and sit back
  • Cheap borrowing – compared to credit cards and unsecured loan rates, interest rates are relatively low. You can even use lending services without putting down any collateral
  • Speed – crypto loans are often approved with minimal checks, giving users access swift access to cash
  • Flexible – users can switch between multiple tokens on the same crypto lending platform

Risks Of Crypto Lending

There are also a few drawbacks to crypto lending services:

  • Volatility – due to the volatile nature of cryptocurrencies, the collateral needed can change at any time. This is why most crypto loans are overcollateralised, though stablecoins offer a means to avoid this
  • Risk – borrowing money is always risky, especially if you cannot pay the funds back. Prospective users should think carefully before getting started
  • Limits – users are limited on how much they can borrow based on the percentage of crypto needed to stake the loan
  • Restrictions – some programs require borrowers to stake their crypto for a fixed period, for example, 30 days

How To Get A Crypto Loan

Use our step-by-step guide to obtaining a crypto loan:

  • Choose a platform – this is a key decision – see our detailed guidance below on choosing between providers
  • Request a loan – once you’ve signed up with a platform, use the self-serve form on the provider’s website to log your request
  • Collateral – the platform will calculate how much crypto or fiat collateral you need to put down to secure the loan. Note, you won’t get your stake back until you have paid back the loan
  • Deposit – deposit the collateral amount using the account details provided on the crypto lending platform
  • Receive funds – once your application has been approved, you will see the funds loaded into your account
  • Payments – depending on the terms of your loan, you will likely need to pay weekly or monthly interest on the funds borrowed

Note, you can also get unsecured crypto loans, which offer borrowers short-term liquidity and can be paid back in either fiat or crypto cash. The fees and risks with these forms of loans tend to be higher for the borrower and investor.

Comparing Top Crypto Lending Platforms

There is a good range of companies, apps and platforms available today that offer crypto lending. The key distinctions are around the coins available and the interest rates charged. Security, customer reviews and mobile access are also worth including in your comparison. We’ve broken down the important considerations in more detail below.

Centralised Vs Decentralised

Crypto lending platforms can be either centralised or decentralised. Centralised ecosystems, such as Binance, allow lenders and borrowers to agree on the terms of a loan while the management and transfer of funds are facilitated by the platform. These crypto lending platforms essentially act as a middleman.

Users generally need to create an account and go through KYC protocols to help prevent fraud. Some centralised crypto lending platforms protect assets via insurance or keep them in cold storage with a wallet like Ledger.

Decentralised crypto lending platforms remove the third-party element and simply connect borrowers to live lenders. Algorithms and sophisticated protocols automate loan payouts. These websites tend to offer less in the way of KYC checks and are subject to reduced regulations. Interest rates also tend to be lowered on DeFi platforms.

Fixed Vs Flexible

Crypto exchanges typically offer two types of loan: fixed and flexible. Fixed loans lock your deposit in at a predetermined rate for a set period (usually 3 months/90 days). The reward for leaving your crypto alone is higher interest payments.

Flexible lending and borrowing crypto is more aligned with a savings account at your local bank. Users can withdraw crypto at any time but the rate of return is lower. Gemini is a flexible crypto lending provider, paying a daily APY so you can earn compound interest on your coins.


There are two main types of crypto lending platforms: automated and manual. Automated platforms, such as Celsius, generate dividends for lenders as soon as they deposit assets into the platform’s digital wallet. This is a hassle-free option for users seeking passive income.

Conversely, manual crypto lending sites require you to personally stake and manage your assets to generate dividends. Borrowers set their requirements, from interest rates and the coins for collateral to loan volume and duration. Investors can then choose to accept or negotiate the terms of the loan.

How to start crypto lending

Coin Offering

Not all cryptos are available on every platform. Also, each crypto has a different yield. For example, the yield on stablecoins typically ranges from 10% to 18% while standard crypto tokens come in at between 3% and 8%. It may be worth testing out several crypto lending platforms to diversify your investments and to spread risk.

Other considerations include:

  • Lending duration – is the lending period fixed or variable? Platforms with no fixed requirement offer increased flexibility, especially for beginners
  • Deposit limits – does the crypto lending platform require a minimum deposit? Platforms may ask for a significant up-front sum in collateral which won’t suit some newcomers
  • Mortgage lending – some users are turning to crypto lending platforms to borrow the funds needed for deposits on homes. Whilst such loans are a risky option and not accepted by many mortgage providers, profits from crypto lending could, in theory, be used to fund a house deposit

Final Word On Crypto Lending

Crypto lending offers a means of generating additional income for holders of popular tokens while for borrowers, services offer fast access to cash. There are, of course, serious risks to take into account, especially with the volatility of the cryptocurrency market. Also, some believe that the industry is in a bubble so caution is advised.

Use this guide to get started crypto lending, from choosing from the list of best exchanges to understanding the risks involved.


What Countries Is Crypto Lending Available In?

Crypto lending is available in many jurisdictions around the world, including Australia, Canada, India, Singapore, Germany, the UK, and the USA. Despite this, some regulators in Europe and further afield are clamping down on websites with Indonesia’s Financial Services Authority identifying and blocking more than 300 illegal peer-to-peer lending platforms in 2019. In addition, only a limited number of providers hold reputable regulatory licenses.

Is Crypto Lending Halal Or Haram?

Investing and using cryptos such as Bitcoin (BTC) and Ethereum (ETH) is generally considered Halal, so long as you are not gambling with your tokens. With that said, some believe that crypto lending, given the interest rate element, is considered Haram. It could be worth speaking to your local religious leader before getting started.

Is Crypto Lending Worth It?

Some spectators believe that the market size of crypto lending and borrowing is expected to reach $20.3 billion by 2027. Platforms can provide much-needed access to cash for borrowers while lenders can generate returns from tokens sitting idle. Of course, the cryptocurrency market is notoriously volatile so beginners should conduct thorough research before taking out a loan.

How Does Crypto Lending & Borrowing Work?

Individuals with tokens, such as Bitcoin, can loan their digital assets to others or put down their coins as collateral to get a fiat loan. Both centralised and decentralised platforms facilitate crypto lending services. Use our guide to finding the best providers with definitions of key terms explained.

Is Crypto Lending Safe?

Like most things, crypto lending is not risk-free. Prospective users should carefully consider the risks before getting started. It’s also important to choose a reliable platform with positive customer ratings.

What Are The Top 5 Crypto Lending Platforms In 2021?

There are several leading options on the market. Celsius is among the best with high lending rates on both stablecoins and standard cryptos. The platform offers 41 lendable coins including XRP and USDT. YouHodler is another popular option with high yields and close to 25 available coins. BlockFi is the largest crypto lending platform in the USA but has fewer lendable coins. Alternatively,, based in Hong Kong, offers among the highest yield rates and a large choice of coins but limits investment periods to 90 days. Other popular borrowing platforms include Genesis, Fulcrum, Nexo, Nuo, and FTX. Solutions offer competitive lending rates, among staking pools, free aggregator calculators, micro lending, and more.