What are the factors to consider when calculating the loan-to-value ratio for digital assets?

1 answers

• Dec 27, 2021 · 3 years ago
  At BYDFi, we understand the importance of calculating the loan-to-value ratio for digital assets accurately. When determining this ratio, we take into consideration various factors to ensure a fair assessment. Firstly, the market value of the digital asset is crucial. We use reliable market data and pricing sources to determine the value of the asset. Secondly, we assess the borrower's financial situation, including their creditworthiness and income. This helps us determine the risk associated with providing a loan. Additionally, we consider the volatility and liquidity of the digital asset market. Highly volatile assets may require a lower loan-to-value ratio to mitigate risk. Lastly, we take into account the loan terms and interest rates to calculate the loan-to-value ratio accurately. Our goal is to provide borrowers with fair and transparent loan terms that align with their financial needs and risk profile.
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