Binance comes to Bitcoin miners' rescue.
Binance is the world’s largest crypto exchange, and with great market share, comes great responsibility.
The Bitcoin (BTC) mining industry has become tough of late, due to:
Increasingly difficult blocks to mine (meaning it requires more energy to be burned, in order for miners to earn Bitcoin)
Higher energy rates (making mining even more expensive)
Higher interest rates (increasing the rent on physical warehouses)
A bear market (meaning each Bitcoin mined is worth less than it was a year ago)
But, a big part of Binance’s trade volume is in Bitcoin. In order to continue its market dominance, Binance needs BTC to continue to thrive.
So the big brains at Binance have come up with a plan: lend money to miners.
Binance just announced that they would be creating a lending pool of $500M, to give Bitcoin miners a helping hand.
Borrowers will have access to loans on an 18 to 24 month term, with interest rates ranging from 5% to 10%.
The idea being, Binance can help miners right now, and in 18-24 months, things should be rosy again in the crypto markets (the next bull run will have begun), and miners will hopefully be profitable again.
To put that it into real world terms:
This is kind of like when you're hungry at 4pm and choose to snack on your housemate's stash of Tostitos, in order to get you through till dinner time.
You'll eventually need to replace them, so he doesn't notice. But for now, you're good.
(Greg, if you're reading this, it's time to find a better hiding spot).
If this works out as Binance hopes it will, it should tide BTC miners over to the next bull run, and they’ll make a bit of interest on the side.
If enough BTC miners take a loan, and things get worse, well that could be a huge headache for Binance.
Fingers crossed we get scenario one
