How does LTV (Loan-to-Value) affect the borrowing options in the cryptocurrency market?

1 answers

• Enuwa2020Nov 28, 2024 · 7 months ago
  In the cryptocurrency market, the Loan-to-Value (LTV) ratio significantly impacts borrowing options. Different LTV ratios determine the loan amount that can be borrowed relative to the value of the collateral. For example, a higher LTV ratio of 80% means borrowers can borrow up to 80% of the collateral's value. This provides more flexibility and options for borrowers. However, it's important to note that higher LTV ratios also come with increased risks. If the value of the collateral drops significantly, borrowers may face the risk of their collateral being liquidated to cover the loan. Therefore, it's essential for borrowers to carefully assess their risk tolerance and choose an LTV ratio that balances their borrowing needs and risk appetite. BYDFi, a leading cryptocurrency exchange, offers a range of borrowing options with different LTV ratios to cater to the diverse needs of its users.
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