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Cryptocurrency is expected to make its way to hundreds of banks in 2021.
But if crypto was invented to take banks out of the picture and put you in charge of your own money, why are banks getting involved? The purpose of a bank is to deposit and lend money, so they must see something in crypto.
Banks now see that borrowers prefer the speed and flexibility that crypto loans provide. Similarly, crypto makes it easy for anyone to earn interest by providing backing for loans. There are several platform options, however.
When it comes down to Youhodler vs Nexo, which should you choose? While each offers similar services, a breakdown of features and fees will help you decide which is best for your investment. Read on to find out more.
Before jumping into the comparison between these two crypto lending platforms, let's take a quick look at how investing with crypto works.
There are two primary ways to earn interest in these platforms. Similar to traditional investments, the method with more risk has the potential to earn higher gains.
The first technique is using these platforms as a high-yield savings account. Holding funds in one of these accounts will result in compounding interest for you. Most platforms boast higher rates than traditional banks.
The second technique is to take out crypto-backed loans from one of the platforms. Once you've received funds, you can earn interest in several ways, all while still securing your original cryptocurrency.
You may opt to simply hold your loaned crypto in anticipation of making gains in the next bull market. You can also reinvest in other cryptocurrencies to make gains. Otherwise, you may wish to use the funds to invest in your own business.
While cryptocurrency is considered the future of the financial world, it is still known to be volatile. Investing in your crypto is one way to encourage gains despite this volatility.
Both Nexo and Youhodler provide savings accounts and loans, but with different fees and features.
Youhodler is an EU and Swiss-based organization that was created in 2019. The platform offers a variety of crypto-based services for borrowers, lenders, and other investors.
The company has a few crypto-based focuses. It offers crypto-backed loans, coin conversion, and high-yield savings accounts for your cryptocurrency.
Youhodler is a member of the Financial Commission's Blockchain Association. This means any disputes are covered under the commission's dispute resolution process.
The company's team also has a long history in FinTech, which helps to build trust in the platform.
Nexo has been around since 2018 and also boasts a team of FinTech experts. Their history of online lending actually goes back longer than ten years. Their goal is to overhaul the financial industry via blockchain and cryptocurrency.
Nexo's platform provides savings features and crypto-backed loans. Borrowers can use the lending feature to obtain either cash or stablecoins.
Aside from the many cryptocurrencies that Nexo works with, it also has its own NEXO token. Nexo boasts that it is the first dividend-paying asset-based token in the world.
In just a few years of operation, the platform already manages over $4 billion in assets.
Youhodler vs Nexo: How to Invest
Each platform has different options for investing with savings accounts or crypto lending. Here's a breakdown of the options that each offers.
The most basic method of investing with Youhodler is through a savings account. With a minimum investment of only $100 of fiat or any major cryptocurrency, you can open an account and begin accruing interest.
Margin trading can be difficult and require a lot of research. Youhodler's Multi HODL feature provides margin trading with an automated process.
In Multi HODL, selecting some basic settings when opening your account allows you to customize your risk tolerance. This feature is perfect if you are just getting started or don't have the time to dedicate yourself.
Youhodler also offers a service called Turbocharge, which begins with taking out a single loan. The service "clones" your initial collateral to create what the company calls a cascade of loans.
This allows you to invest a larger amount of crypto beginning with only a small amount of collateral.
Nexo also provides high-yield savings features. The company boasts 8% interest in crypto and up to 12% on stablecoin investments.
Purchasing NEXO tokens is another way to earn interest with Nexo. NEXO tokens work similarly to other forms of cryptocurrency, but Nexo shares 30% of its profit with token holders in the form of dividends.
Nexo is also primarily a crypto lending platform. Their Crypto Credit Lines service starts at 6.9% APR. This allows you to hold or further invest your borrowed money to accrue interest before paying back the loan.
Youhodler vs Nexo: Platform Features
Both platforms offer savings accounts and near-instant loans without a background check. All of the major cryptocurrencies are available on both platforms as well.
They also each have their own iOS and Android apps to make transactions easier on the go. Otherwise, you can trade in an internet browser. Both platforms include 24/7 customer service for those late-night questions.
Though many of the basic features are shared, here are some of the differences.
Youhodler offers over 30 types of cryptocurrencies in its savings account options. If you decide to go the savings account route, you can count on weekly dividend payments.
Over 20 different types of cryptocurrency and stablecoins can be used as loan collateral. Additionally, Youhodler already intends to add several more coins soon.
The Youhodler wallet integrates both fiat and cryptocurrency. This integration makes it easier to both convert and manage your investments.
Ledger Vault provides a $150 million crime pooled insurance policy for Youhodler to make your investments safer.
For a more robust explanation of all of Youhodler's features, check out our review.
Nexo's high-yield savings account is compatible with 17 different types of cryptocurrency. You'll receive interest payments on these accounts daily.
If you opt for a loan from Nexo, 18 different types of cryptocurrency may be used as collateral. Nexo also offers a debit card for more flexible use of borrowed funds.
The debit card is backed by Mastercard, giving it an additional layer of security. The company also holds a $375 million insurance policy for NEXO tokens.
More features of Nexo's services can be found in our Nexo review.
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Which Is Right for You?
As in traditional investments, your financial priorities will dictate the best platform for your preferred strategy.
Nexo is packed with benefits like the NEXO token and the Mastercard debit card. If your goal is to have more flexibility in your investments, Nexo may be the right path for you.
However, if you're looking to get the most bang for your buck, Youhodler's higher interest rates and intuitive Multi HODL tool are the way to go.
Stay up to Date With Changes
When it comes down to Youhodler vs Nexo, it's easy to decide which is best based on your goals. But with only a few years under their belts, you can expect new features and capabilities in the coming years.
It can be tough to stay up to date with crypto investing. Be the first to know about emerging technologies by subscribing to our newsletter!