- Hong-kong based organization Babel Finance is now offering loans against mining machinery
- Using mining machines as collateral allows mining farms to maximize profit
- Loans at cheaper Loan-to-value ratio
An Asian start-up Babel Finance is coming forward to make it easier for bitcoin and other crypto mining firms to establish and grow their mining operations. Operating a crypto mining business is a capital-heavy and complicated venture, and Babel will be accepting mining machines as collateral for USD loans from miners.
Mining machines for loans
The Hong-kong based company Babel Finance, a cryptocurrency financial services provider, offers USD loans to bitcoin and other crypto miners against their mining machinery.
Without selling off the mined coins, managing cash for daily expenses becomes a handful of a task. However, with the innovative offering of Babel Finance, crypto miners can now have the taste of their pudding and still have it!
Talking about the firm’s unique and innovative offering, Lei Tong Babel’s MD (managing director) of Babel Finance said,
“Mining machines are bitcoin miners’ biggest assets. After the March 12, 2020 price drop, they wanted to keep as many coins as possible. Putting their machines up as a mortgage is a much better way for them to get loans versus using bitcoin (BTC).”
Babel has partnered with some of the most prominent crypto mining organizations like F2Pool (BTC), Hashage and Heng Jia Group (BTC), and Spark Pool (ETH) to facilitate the borrowers with its services.
What benefits will borrowers enjoy, and how
The loan-to-value (LTV) ratio for these loans offered by Babel is way much cheaper than their usual charges.
Babel claims to offer these loans at 30% LTV compared to their standard charges of 160%. This implies that to borrow USD 1 million, miners have to put up Bitcoins worth USD 1.6 million.
Bitcoin is on a severe bull run since the recent times, and the value of the world’s flagship cryptocurrency has continuously surged this year. During the bull market, miners tend to hold onto their newly mined coins to maximize their profits when the prices touch new highs.
During times like this, founders need to think about electricity bills, the expense of hardware and its maintenance, and even employee payroll without losing the new coins, and Babel’s innovative step will make their work just easy.
Crypto Mining organizations will operate the machines while holding them as collateral. Babel keeps the newly mined coins; this enables Babel to recover the absolute value of the loan even in the market crash, said Lei Tong.
Babel believes this innovative idea will protect crypto miners during the market crash and grow their profits.
Will this idea help in the establishment of new mining farms? And what else Babel’s can offer in the coming future.
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