Block Earner launches Australia's Crypto-Backed Loans to help crypto holders free up liquidity

Sydney, 7 September 2023 — Leading blockchain-powered fintech company Block Earner today announces the launch of its Crypto-Backed Loans product — a first for Australia — enabling crypto owners to free up liquidity using their digital assets without selling them.

Crypto-Backed Loans by Block Earner enable everyday Aussies to use crypto as collateral against its loans with a 33% loan-to-value ratio (LVR). Ethereum-backed loans cost 5.95% APR, while Bitcoin-backed loans cost 7.95% APR. Similar products exist in other regions of the world through Coinbase in the US and Nexo in the EU, but Block Earner is the first solution to deliver a local, compliant and AUD denominated offering.

There are over 4.6 million Australians who own crypto in 2023, who have seen the value of their digital assets diminish in the past 18 months after macro economic factors have affected both traditional finance and crypto markets. Many crypto owners, avoiding realising their losses, are now sitting on their digital assets waiting for the market to recover.

The need for liquidity to cover increasing living expenses is also becoming more evident, with inflation at its highest level in 30 years, interest rates at their highest levels in over a decade, and Australian savings levels dangerously low. Millennials and gen Zs have a combined average of just $20,000 in savings, while homeowners are cutting back significantly to cover their mortgage repayments.

More than half of Australian crypto owners (61%), equating to around 2.8 million Aussies, are considering using their crypto as security for loans in the next year to cover rising living expenses, Block Earner research indicates. Nearly a third (31%) of Aussie crypto holders say they’ll do so to cover unexpected emergency expenses — more than any other reason. 26% are looking into Crypto-Backed Loans for home deposits and cars, while 23% are looking to pay off regular household bills.

Charlie Karaboga, co-founder and CEO, Block Earner said: "Block Earner is the first blockchain company in Australia to provide groundbreaking Crypto-Backed AUD Personal Loans, offered with an Australian credit licence authorisation, to crypto investors.

“We built this product because there’s a glaring need for it in Australia right now. 4 million crypto holders are going through a cost-of-living squeeze and are dipping into their savings or selling off their investments to free up cash. Now, however, we’re providing a way to free up cash without needing to sell their investments with a unique borrowing option that Australia has never seen before.”

Committed to remaining conservative in its approach, not only is collateralization limited to the most established coins on the market (Ethereum and Bitcoin), Block Earner’s loan-to-value ratio (LVR) for its newest innovative product is 33%, meaning customers are well-protected from large market moves. Customers also have the flexibility to pay their loan back in instalments or at the end of their loan period.

While there is a positive outlook towards Crypto-Backed Loans during a time when volatility is at its lowest level since 2016, Block Earner’s research highlights potential concerns including future market volatility and possible loss of assets value. Block Earner addresses these concerns by offering the loans with a safe 33% LVR and setting an automatic repayment threshold of 70% LVR, which means the value of a customer’s crypto would have to drop by more than half to trigger an automatic repayment of the loan using the security, bringing the LVR back down from 70% to 55% by paying part of the loan.

Jordan Momtazi, co-founder and chief strategy officer said: “Now, crypto investors can borrow against their digital assets to access liquidity, which is increasingly important for many in the current economic environment. The product is designed to be seamless, allowing a simple, security based AUD loan, against an asset that many want to hold for the long term.”

As Australia's first Crypto-Backed Loans provider, Block Earner will operate under an Australian Credit Licence Authorisation and is currently a member of the Australian Financial Complaints Authority (AFCA). In anticipation of high demand, Block Earner has implemented a waitlist for its new crypto-backed loans product, which will launch in late September, offering 0% interest for the first 30 days to people who sign up.

Study methodology: Research was commissioned by Block Earner and administered by YouGov. It was conducted in May 2023 among a sample of 1,060 Australian crypto owners aged 18+ (representative of the population).