Everyone thinks that to be a successful crypto trader, one must have a large stash of capital to get started. That’s not the case. Every trader starts somewhere and more often than not, it has roots in borrowed funds. Loans are not just for people who need cash to pay the bills. They are a valuable trading tool used to access larger amounts of capital for less. Crypto traders have a unique strategy they’ve been using to make profitable deals and now, the will share it with the world.

Crypto traders playing a “game of loans” as a leveraging strategy...

As the crypto market and the industry surrounding it began to evolve, so did the strategies of crypto traders. With more tools available to them, they could now make similar deals compared to traders on the traditional stock market. For example, take leveraged loans.

Traders are playing a “game of loans” with this strategy that involves taking a loan, using that cash to buy more crypto, using that crypto as collateral for a 2nd loan, taking the cash from the 2nd loan to buy more crypto to use collateral for a 3rd loan and so on and so forth. In theory, they can repeat this process as many times as possible. The end result is having a large stash of crypto which they will own if they pay back the loan.

Then, if a bull market comes, the value of their newly acquired crypto will rise and offset the costs of the loan, leaving them to keep all the profits. Let’s see an example of this using a crypto lending platform.

Crypto traders using lending platforms to strengthen their portfolio...

Let’s say 1 BTC = $10,000 in this example. A crypto trader goes to a crypto loan platform with their 1 BTC and uses it collateral for a USD loan (90% LTV). Hence, they receive $9,000 in USD which they then use to buy more BTC and use as collateral for the second loan in the chain.

The process is repeated five times to look like this:
1st loan: 1 BTC
2nd loan: 0.864 BTC
3rd loan: 0.746496 BTC
4th loan: 0.644973 BTC
5th loan: 0.557257 BTC

By the end of the chain, the user has 3.812726 BTC even though they started with just 1 BTC. When it comes time to repay the loan, the total amount is 31, 701.23 USD (not including the 5015.31 USD the client has from the final loan in the chain). At the end of it all, the got 2.812726 additional BTC for 31,701.23 USD. Therefore, 1 BTC costs only 11270,64. That’s just +12.7 % of current value. Then imagine if BTC price grows +15%, which it has done many times in the past, then the trader essentially got 2.812726 than a much cheaper rate than on an exchange.

Crypto traders find a new automated tool for a chain of loans...

Yes, it is possible to do the aforementioned technique with a combination of crypto exchanges and crypto lending platforms. However, crypto traders found one platform that can do it all.

FinTech platform YouHodler has a unique feature called Turbocharge that helps you start a chain of loans in just one click.

Starting with the initial collateral the platforms automatically use borrowed funds from the first loan to buy more crypto and get another loan. This step is repeated from 3 to 10 times. Sometimes a bull run is too fast to take manual action. Once your collateral coin hits the Take Profit price, YouHodler automatically uses the collateral to repay the fees. You get the rest of the crypto back and benefit from the price's growth.

You can repay the full amount and get up to ×6.5 of your collateral for the initial price. Also, you can use collateral to repay the loan and take the rest of your crypto ("Close now "option). YouHodler makes leveraged loans accessible to anyone, everywhere. So if you’re looking to become serious about trading crypto, check them out today.

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Author: Matt Miller
London News Desk