Everyone Makes These MISTAKES With Crypto Loans

1. Don’t “buy the dip.”
2. Sell your current wallet instead of getting a crypto loan.
3. Inadequate market research before obtaining a cryptographic loan.
4. Ignores short-term trading opportunities
5. Ignore when Crypto Loan Margin Call is red.
Crypto loans in 3 steps

Crypto lending has been around since the dawn of smart contracts and decentralized finance. The idea of ​​crypto lending has become popular over the years as the industry continues to grow. Various cryptocurrency lending platforms have come up and have continued to offer the most crypto lending customer services across the world. However, there are some common mistakes many investors make with crypto loans due to the volatile nature of cryptocurrencies and crypto loans.

The cryptocurrency market is the most active market for retail and institutional investors. High volatility can lead to huge price fluctuations that primarily affect the total value of the investment portfolio. Due to these sudden price changes, investors often make rash decisions that turn out to be serious investment mistakes. This article debunks some of the most common mistakes with cryptocurrency-backed loans.

1. Don’t “buy the dip.”

png«/>png» alt=”Some investors wisely take the opportunity to buy the decline of the declining cryptocurrency market.” title=”Buy the dive strategy”/>

Often when the crypto market turns red, some crypto investors see it as the end of time and keep complaining about the crash because they believe they are losing money on their investments. However, a long-term investment strategy benefits from significant price declines. Every time a dip occurs, savvy crypto investors perceive it as an opportunity to buy the dip. Below is a chart of Bitcoin prices over the years 2013-2022 showing how dips are part of the growth path.

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<img src="data:image/svg+xml,%3Csvg%20xmlns=" http:="" alt="The rate graph of bitcoin from 2013 to 2022″ title=”Bitcoin Historical Rate Chart” data-lazy-src=” -ERRORS-with-the-cryptographic-loans.png»/>The bitcoin rate chart from 2013 to 2022The bitcoin rate chart from 2013 to 2022

Bitcoin Price Action from 2013 to 2022 by Coin Market Cap

So what does “buy the dip” mean?

Cryptocurrency investors can use the price collapse as an opportunity to buy more crypto tokens. Whenever prices drop, savvy crypto investors use crypto-backed loans and invest in promising digital assets that would pay more in interest in the long run. For example, here is a chart showing Bitcoin’s long-term price prediction.

<img src="data:image/svg+xml,%3Csvg%20xmlns=" http:="" alt="The chart predicts the price of bitcoin until 2031" title="Bitcoin Chart Price Prediction» data-lazy-src=» -cryptographic.png»/>The chart predicts the price of bitcoin until 2031The chart predicts the price of bitcoin until 2031

2. Sell your current wallet instead of getting a crypto loan.

Making investments is a difficult part for most people. Financial education is key to ensuring financial success. Whenever a person needs a loan, there are often better options to obtain without damaging their property or investment portfolio.

Whenever faced with financial constraints, people often rush to sell expensive and more valuable assets like houses. Others spend their life savings or cut wages to continue their investments.

This mistake is a common one for investors: ignoring great investment opportunities that open crypto loans and continue to deliver their own funds. Cryptocurrency lending platforms offer a safer option that allows you to borrow cryptocurrency against crypto collateral. The best crypto platforms allow users to obtain fast and affordable loans indefinitely and repay them when they are ready. Such crypto loans provide significant coverage against investment risks and protect crypto investors from unnecessary market risks.

3. Inadequate market research before obtaining a cryptographic loan.

Crypto loans from different platforms often have various terms and conditions. Obtaining cryptocurrency-backed loans without proper background checks is just as risky as investing in a cryptocurrency project without investigating.

Many cryptocurrency users fall into the trap of earning attractive returns that often exceed market rates without investigating how these assets generate additional profits. Here are some factors to consider;

The best crypto lending platforms generate profit from the loan interest earned. However, some platforms use escrows to trade on third party platforms that get more interest. These additional investments expose users of crypto loans to risks that can often lead to collateral losses. A reputable crypto lending platform should only rely on interest rates and lock loan collateral in secure cold wallets to protect their clients from unnecessary risk.

Crypto lending platforms sometimes form partnerships with other industry players to ensure smooth processes. Platforms with major industry players as partners are often more credible.

Crypto lending platforms need to process loans and escrows quickly and efficiently. If a platform has robust APIs that are too large, it can take a long time to receive your loan amounts.

4. Ignores short-term trading opportunities

The high volatility in the cryptocurrency market is essentially a double-edged sword. Day traders and sculptors often take advantage of daily price changes to make more profitable trades. These short-term strategies are sometimes more profitable than long-term strategies that involve holding tokens even when the market is in the red.

Experienced day traders can use quick cryptocurrency loans to trade, make a profit during the day, and pay off the loans at the end of the day to keep the profits. Such strategies often benefit smart hands that can take advantage of good trading opportunities in daily market trends.

5. Ignore when Crypto Loan Margin Call is red.

Cryptocurrency-backed loans are issued by depositing your favorite cryptocurrency as collateral before receiving the loan amounts in the stablecoin of your choice. It is essential to keep an eye on the loan-to-value ratio when accepting cryptocurrency loans, as it determines the settlement price.

The investor ignores the red line of his margin callThe investor ignores the red line of his margin callThe investor ignores the red line of his margin call

Since the cryptocurrency market is a 24-hour market, prices change every time, which makes quick settlement possible. Some of the big crypto lending platforms have effective notification systems that monitor collateral levels and notify users of their loan status to top up their crypto collateral whenever the settlement price is close.

Crypto loans in 3 steps

Cryptocurrency lending platform CoinRabbit has an excellent track record of demonstrating credibility and trust when handling crypto collateral from clients. The platform has gained significant trust in the industry thanks to its partnerships with large companies such as ChangeNow, Atomic Wallet, and Guarda Wallet, significantly improving the overall experiences of crypto lending users on the platform.

Here is a guide on how to get a quick loan from CoinRabbit crypto lending platform.


Borrowing against cryptocurrencies is a fantastic way to preserve your portfolio by creating more investment opportunities. Cryptocurrency-backed loans can open multiple investment doors and build your cryptocurrency portfolio while avoiding the pitfalls discussed above.

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