Crypto’s great but ain’t much use when baby needs new shoes. Crypto loans and crypto lending services allow you to use your cryptocurrency as collateral when you want to borrow against your crypto.
Cryptocurrency loans can be a useful service if you want access to fiat cash such as USD during a bull run. If you were to sell your cryptocurrency you would lose the opportunity to benefit from price rises. You may also incur a tax liability on any gains. Borrowing against your crypto assets enables you to stay in the market.
Lenders will usually lend a fraction of the value you deposit with them. So for example, if you deposit Ethereum worth $1000 a lender might advance you $500. If the value of Ethereum falls to far towards $500 the lender will sell sufficient Ethereum to cover your debt and return the rest to you.