CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
US English

Binance Pool launches $500M lending project for BTC mining, seeks cloud mining vendors

By Raphael Sanis

10:47, 14 October 2022

A bitcoin miner
Bitcoin’s mining difficulty has reached an all-time high as miners migrate to the blockchain – Photo: Shutterstock

The Binance cryptocurrency exchange has launched a $500m loan for bitcoin (BTC) miners after recognising “difficult market conditions”. 

This news came as BTC fell close to a three-month low. However, the coin appears to be rebounding, as mining difficulty reaches an all-time high.

A loan for BTC miners

The loan comes from Binance Pool, the exchange’s platform dedicated towards mining services. 

These funds will be available to public and private bitcoin miners, including infrastructure companies, as it looks to spur a flourishing market.

Its announcement said: “As one of the world’s leading crypto mining pools, Binance Pool has a responsibility to help maintain a healthy digital asset ecosystem.”

The exchange is hoping its $500m loan will benefit this ecosystem. The loans would span between an 18 to 24-month period, with interest rates ranging from 5 to 10%.

Binance also announced it is launching its own cloud mining products, where users can mine cryptocurrencies without their own hardware or software. It is now looking for vendors to help provide this service.

The announcement said: “As the cloud mining hash power will be directly purchased from bitcoin mining and digital infrastructure providers, Binance Pool is looking for cloud mining vendors to work with us.”

Market fluctuations

Bitcoin has struggled over the past month. Its price dipped to a 90-day low of $18,290.32 on 21 September. BTC has recently came close to this low again on 13 October after falling to $18,319.82.

BTC to USD

SOL/USD

171.52 Price
+0.660% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 2.2652

DOGE/USD

0.13 Price
+1.000% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.0012872

ETH/USD

3,512.09 Price
+0.070% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
Spread 6.00

XRP/USD

0.60 Price
+3.190% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.01168

But the cryptocurrency has recovered. As of 14 October, it was trading at roughly $19,500 and was up 3% in the previous 24 hours.

Mining difficulty spike

This price rise comes as bitcoin mining difficulty reaches an all-time high.

Difficulty is a measurement of how much computational power it requires to mine a BTC. The more miners on the network, the higher the difficulty is.

Bitcoin difficulty has recently rocketed to a record of 35.61 trials/nonce (t). This is almost 80% higher than its difficulty last year, when it was sitting around the 20t mark, according to YCharts.

This spike in difficulty is not a surprise to the crypto community as there was a large migration of miners last month. Ethereum switched to a proof-of-stake consensus mechanism, evicting miners from their consensus mechanism.

The Bitcoin blockchain is benefitting from this with its mining difficulty seeing an average growth rate of 176%, according to YCharts.

Related topics

Rate this article

Related reading

The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
Capital Com is an execution-only service provider. The material provided in this article is for information purposes only and should not be understood as investment advice. Any opinion that may be provided on this page does not constitute a recommendation by Capital Com or its agents and has not been prepared in accordance with the legal requirements designed to promote investment research independence. While the information in this communication, or on which this communication is based, has been obtained from sources that Capital.com believes to be reliable and accurate, it has not undergone independent verification. No representation or warranty, whether expressed or implied, is made as to the accuracy or completeness of any information obtained from third parties. If you rely on the information on this page, then you do so entirely at your own risk.

Still looking for a broker you can trust?

Join the 630,000+ traders worldwide that chose to trade with Capital.com

1. Create & verify your account 2. Make your first deposit 3. You’re all set. Start trading