At Bitbond, you can earn interest by investing your money in their lending system. But are they legitimate?
We all hate frauds so let’s find out.
A Review of Bitbond
Bitbond operates from Torstrafe 177, 10115 Berlin, Germany, and is registered under Bitbond Gmbh. According to their website, the operator has over 60,000 users, and over 1,500 loans funded worth $900.000. Bitbond further claims that since they work only with Bitcoin, borrowers, and lenders don’t need a bank account to take part in their global loan market. No central finance entity manages or charges fees on the process and money. This protects business owners and lenders from higher fees and losses on the lending platform.
The Company
Bitbond is a global peer-to-peer Bitcoin lending platform. Small businesses and individuals can access affordable loans, while lenders earn interest on their loan bitcoins. Their goal is to make investing and financing in Bitcoin available across the world. Bitbond is the third largest Bitcoin lending business, and has a platform that is both high risk and high yield. Thus traders should exercise caution as there’re no risk-free earnings. Investors who loan out their bitcoins can make up to 13% profit through interests.
How does it Work?
For starters, a contract is agreed on between the borrower and the lender to borrow a certain amount of bitcoins. The loans duration can be between 6 weeks to 5 years.
A borrower must get a rating before their loan request is published. The rating focuses on their financial assessment. The borrower also needs to verify their identity.
To get funding, your loan request has to be published in the Bitbond marketplace where lenders place bids during an auction. Your loan request will be in the marketplace for a maximum of 14 days.
Borrowers and lenders both receive a payment schedule. It’s displayed in the member’s area and personal account. This is after an auction concludes successfully.
Investing in Loans
To fund loans for borrowers, go to the investing page and choose your request of choice. You can fund loans with a minimum of 0.01 BTC. Investors can earn good returns and there’s no maximum to your investment. The return rates are competitive and it can be a sure way to add a passive income stream to your portfolio. Always confirm if the borrower has a good reputation. Find out the borrower’s repayment history, and if they have any loan activity. It’s advisable to avoid dormant borrowers.
Borrowing on Bitbond
Bitbond’s slogan is “Borrow and invest without borders”. Borrowers can get quick and easy loans of up to $10,000 approved. For smart borrowing, always apply a loan term of 6 months or less. The maximum length of 5 years is not something you should trust. The loan fees are:
- 6 weeks term loan is 1% of the funded amount
- 6 months term loan is 1.5% of the funded amount
- 12 months term loan is 2 % of the funded amount
- 36 months term loan is 2.5% of the funded amount
- 60 months term loan is 3% of the funded amount
Bitbond hit the headlines recently after raising 800,000 Euros in an angel investment round. If possible, they should use this money for user acquisition as one of the main hindrance to their success is the lack of loan volume.
Transparency
Bitbond is a transparent company and doesn’t hide its identity. Much of the information about the owners is public knowledge. For example, the founder and CEO Radoslav Albrecht name can be found in the domain registration information. Other notable individuals are Jarek Nowotka the CTO, Moritz Cremer the CFO, Chris Grundy the head of marketing and Laurie Williams the developer. Companies and individuals who have a stake in the company include pointninecap.com, Nelson Holzner of Billspay, Felix Jahn of Home24, Angel Investor’s Christian Vollman and the co-founders of Project A Uwe Horstman, and Florian Heinemann. This confirms Bitbond is an established company.
Availability of Historical Data
Another point that adds to the transparency of Bitbond is the availability of downloadable historical data. This feature has made LendingClub and Prosper popular with traders. Bitbond is unique as they’re the only Bitcoin lending operation that provides similar transparency. On their statistics page, you can download a free CSV file. Access to the data increases the investors trust in their platform, and assures them they’re experts in that field. Due to Bitbond’s relatively young age (2 years) the data is not that extensive, though it forms a good starting point.
Support
Bitbond is obviously not a fraud. They’re a well-established company both physically and online. Their multiple staff ensures you get good customer service and support on the website. Though they’re usually fast, allow them up to one business day to respond. Since the loans have to go through a thorough application review, you are more assured borrowers will not run away with your precious bitcoins.
The Pros
- Borrowers have the lowest fees and interest rates in the Bitcoin lending market
- Investors enjoy lower default rates as Bitbond uses a robust feature to ensure high-quality borrowers
- Loans have longer durations and the default rates are approximately 13% – some of the best rates in the market place
- Bitbond allows early loan repayment without having to pay interest full term
- You can invest as low as $2
Cons
- In comparison to the competition, Bitbond has low loan volumes. This can be attributed to the 40% acceptance rate
- It’s not open for everyone as the majority of borrowers are small business owners
- In comparison to LendingClub and Prosper, Bitbond doesn’t offer enough KPI’s. They also lack graphic and visual display of their data
- They claim to have a robust debt collection strategy, but that has not been properly documented.
Bitbond has one of the highest ratings in reviews, which assures investors of their legitimacy. Their fees are lower than the competition due to a proactive and successful borrower risk-assessment program. As a result, their reasonable fees attract serious borrowers partly due to the risk profile of loans.