As more and more crypto startups launch, Australia has seen crypto holdings or rather the number of people who hold crypto, triple during this year. This is according to a crypto survey conducted recently by Finder-backed brokerage firm HiveEx.
It is not only in Australia where more people are owning and holding crypto; another survey from SharePost says that the number of crypto owners or people owning or holding crypto has increased significantly globally in the last one year despite the bear market. Also, the survey from SharePost showed that 59% of these investors and 79% of consumers, will be adding to their crypto portfolios over the course of this year. The survey said that non-crypto holding customers wanted to start with Bitcoin as their first crypto investment while crypto investors were looking towards ETH and XRP as the greatest investment opportunities.
Back to the Australian crypto survey: it involved 2,000 people and further revealed that a half of the crypto holders in the group are holding for reasons of investment while 34 percent are fearing to miss out and 26 percent using it to save retirement. More important is the fact that 80 percent of respondents said they are planning to pay their taxes using cryptocurrencies for their day-to-day purchases.
As more people buy into crypto, related services are going to have to improve. One of those is crypto lending. And that too is a main area for businesses in crypto.
Helio Lending has become the first cryptocurrency lending startup to launch in Australia since Wednesday this week, and is planning to offer 50% more spending power than they do by holding their cryptocurrency assets. But interest will be a little bit on the higher side, at 24% for those who use their maximum LVR of 50 percent, with loan terms going between 60 days and five years. Interest rates will drop to 20% for a 40% LVR, and 17% for a 30% LVR.
Although those rates might seem to be higher, head of business development at Helio told Business Insider news outlet that they were lower compared to those charged by competitors, although standard interest rates on Australian-issued credit cards range between 12.5% and 20%.
The initial loan terms will be limited to a minimum of 60 days and a maximum of 5 years. According to Business Insider, the startup will lend money based on a maximum loan to value (LVR) ratio of 50%. It means a person can take loan of as much as half of the value of their crypto holding in the wallet.
Anyone with crypto assets, whether held within or outside of Australia, will be able to access fiat loans of from $1,000 in minimum up to a maximum of $5 million in AUS, USD, EUR and HKD, without having to sell their digital assets. Customers will, however, require Know Your Customer (KYC) checks and signing lending agreements. The company also takes custody of the assets used as collateral, which is returned when the person pays the loan to full. A customer can also choose to pay the loan as principal and interest, or in terms of interest only.
With the bear market biting hard and volatility causing value of crypto holdings to fall terribly lately, crypto holders are constantly in search of better ways they could avoid huge loses because selling may not be the most viable. The firm said that it anticipates that the new service which affords Australians loans for their held cryptocurrency assets, will unlock their reinvestment and buying potential. But a customer may also end up losing their crypto holdings if the crypto prices drop further and the value of underlying asset reaches 95 percent of the loan amount when the startup will have to liquidate.
With the new service, Helio customers will be able to access the fiat loans simply by depositing their assets into crypto wallets and using them as collateral. The startup, which is partnering with ETHLend in the Asia Pacify region to manage crypto wallets and clear liquidity, uses distributed ledger based technology to continually monitor the prices of Approved Digital Assets such as Bitcoin, Ethereum, Litecoin and Ripple in order to give out loans. Those are the assets they will start lending against.
The service has even started getting inquiries from interested customers according to CEO and Founder of ETHlend Mr Stani Kulechov. Helio Lending Founder and Managing Director, John O’Shea said there are only two or three providers of crypto loans globally adding that they are excited to enter an untapped area with so much potential for growth and expansion.
Helio is licensed after obtaining an ASIC (Australian Credit Licence)-approved Australian Credit Licence, via the buyout of another lending company known as Cashflow Investment.
Still, more remains to be done in regard to cryptocurrency industry in the country and world-over if such services are to thrive; some are not holding because they lack knowledge of cryptocurrency according to the HiveEx survey. 65 percent said they do not own crypto because of lack of understanding or difficulty in using or acquisition and over 20 percent of those who do not have crypto say they believe it is a scam and an equal percent thought it was a bubble.