Bitbond.com Review 2019 – Strenghts and Weaknesses of Bitbond

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BitBond is a P2P Bitcoin lending website founded by Radoslav Albrecht that started operating in 2013. The company is registered in Germany where it complies with local laws and regulations; it has physical offices located in Berlin.

The platform follows AML / KYC policies which allow lenders to pursue legal actions against defaulters if they want or work with a collection agency. The average percentage yield (APY) of the platform is 13%.

Using the site: signing up

Anonymous accounts are not possible since identity verification is mandatory for both borrowers and lenders. Temporary email services are mostly blacklisted and cannot be used to register accounts. The process is quite straightforward and it takes only filling some basic personal information (name, last name, phone number, email), choosing the type of account (lender or borrower) and setting a password.

A nick name is automatically assigned to new users, which they can edit only once. Investors have the chance to switch their role, but once they request a loan they cannot participate as lenders anymore.

The warning you get after trying to get a loan from an investor account. If you decide to go on with the switching, you will be redirected to the borrower’s verification process

Using the site: account verification

Getting verified is required to use the site, the process is slightly simpler for lenders which in the past did not require to pass a verification at all (it was implemented to enforce AML / KYC policies).

This is what happens if you try to fund (or partially fund) a loan if you have not verified your account. In the picture you can also see what happens when you do not have any funds, but ignore that.

Lenders need to fill their personal information and then proceed to a video call with an MT agent which will check their national ID or passport and confirm their identities. Currently, BitBond has personnel that speaks English and German, but they are planning to add support for Spanish in the near future.

Getting your account fully verified takes less than 5 minutes, you only need a webcam, a microphone, your document (ID or passport) and a decent internet connection

Borrowers on the other hand have to add some extra information, including employment status, residence, contact details and link at least two social, financial or business accounts (such as Facebook, PayPal and eBay, respectively). The more complete your profile is, the better rate you will get and the higher the odds of getting a loan will be. Interests and maximum amount that can be borrowed are closely related to the personal rating.

Using the site: loans

The site offers two types of loans: exchange rate pegged and BTC locked loans. The first one lets borrowers reduce the risk inherent to the volatility of Bitcoin and represent a great opportunity for investors when the BTC price sinks. The latter, gives investors clear numbers regarding their expected returns and are beneficial for borrowers when the price falls.

BTC locked loans are in theory more favorable for lenders, but it is a double edged sword: if the price of Bitcoin goes up, they are expected to get a double profit, but the odds of borrowers defaulting increases as well. These days, exchange rate pegged loans clearly dominate BitBond, with debts in USD and EUR being at least 10x more common than their crypto-backed fellows.

Out of nine, only one loan request is stated in Bitcoin. You may also notice that most loans have got a steady flow of funding (all but the first one(s)).

Regardless of their denomination, all loans have to be paid in Bitcoin as the site takes advantage of the benefits cryptocurrencies offer for moving money between borders.

Fees and other terms depend on the rating each user has. Available periods are 6 weeks (with a single payment) or 6, 12 or 36 months (with a monthly payment schedule), with an originating fee for the borrower of 1, 1.5, 2 and 2.5%, respectively. An additional fee that does not depend on the internal score system is the arrears fee, which consists in a 1-EUR-in-BTC charge for every email sent notifying a borrower about a due loan. Lenders are charged only a 1% fee when a repayment is executed.

To request a loan the user has to complete the verification process, get a rating and then proceed to post the request giving as much detail as he can. Approval rates are not listed in the site, but most loans pass the 60% funding threshold required for them to become active.

Borrower’s verification: at least two accounts must be linked

The platform is even easier to browse for investors who only have to find any of the “invest in loans” links all over the site and click on it.

Even if you randomly click the screen, the odds are high that you will end up in the loans listing.

Once you are in the list, you can directly invest by clicking the button, but you should rather check the requests in detail and decide which ones match your profile risk. With every potential loan you will find a description of what the user intends to do with the money, the interest rate offered, comments from other users and, of course, the profile of the person borrowing.

This guy is trying to get a loan to add more stock to his online store, or at least he claims so.

If you see a proposal that fits your criteria, simply click on the invest button and select the amount you want to put. The minimum amount is 0.01 BTC, and you can either place a bid in BTC or fiat (if successful, you will still be paid according to the type of loan).

Here I am, pretending that I will invest Bitcoin I do not have

Take your time to analyze the outline of the request and the borrower himself. Interest rates are inversely proportional to the risk level (C: 20 ~ 28%, D: 28 ~ 30% and E: 30+%), so do not let them deceive you. The site also comes with an auto investing feature, but the soft factor must always be taken into account, so it is advised to stay away of the bot.

BitBond Statistics

As of July 2017, BitBond has granted more than 1,850 loans worth over 2,300,000 USD, and 60,000+ satisfied users. The number of registered accounts just passed the 100,000 threshold.

BitBond statistics: this map interactively shows the origin and destination of loans

Statistics for defaults are not listed on the website, but Noreikaite and Ambrazaite calculated an estimation based on more than a thousand loans, in 2015. Default rates range from 20 to 100%, with an average of 41.4%.

BitBond on the media

BitBond has hit the headlines of the crypto-news thanks to its alliances and successful funding reception. The site has received around 7 million EUR in total, with more than 6 million in 2017 (February and May) and the remaining in 2015.

They were also highlighted following their partnering with MPESA to provide Africans from Tanzania, Kenya, Nigeria and Uganda the opportunity to withdraw their loans using their mobile or to their bank account in about 20 minutes.

Conclusion

BitBond is a solid company which is not only focused in lending for profit but to contribute with welfare through the globe. High default rates and predominantly exchange rate pegged loans make the site a bad choice for the long term, unless careful attention is paid.

Investors need to devote time to analyze the positions where they will invest. The abundance of fiat pegged loans turn the site into a potential gold mine when Bitcoin is having rough times if a smart strategy is used.