Ways To Use Bitcoin

Unlike traditional lending, which involves intermediaries such as banks or financial institutions, Bitcoin lending occurs on decentralised platforms, eliminating the need for middlemen, reducing fees, and increasing transparency. Bitcoin’s blockchain technology provides a layer of security, as all transactions are recorded and verified, and once a transaction is recorded, it cannot be altered or deleted.

Bitcoin lending offers unique benefits such as global accessibility and speed, and is an innovative way to quickly access cash; a contrast from traditional lending, which often involves lengthy processing times, geographic limitations, and the requirement of physical assets and proof of credit history.

Luxury purchases and online transactions

These days, many wealthy people use Bitcoin to buy luxury items. One of the first purchases of this type was of a brand-new Tesla Model S in 2013. Bought outright from a Lamborghini dealership at Newport Beach, the car reportedly sold for 91.4 Bitcoins, or $103,000, via BitPay. Other notable Bitcoin purchases include a house in Texas worth $400,000, a $600,000 yacht, and a private jet which was purchased in 2020 for the sum of $4.78 million using the digital currency.

Many e-commerce platforms and online services now accept Bitcoin as a payment method. This enables secure, cross-border transactions without the need for intermediaries. Bitcoin transactions are fast, and typically come with lower fees compared to traditional payment methods. Since it's a global currency, high-net-worth individuals can make purchases and transactions anywhere in the world without the hassle of exchange rates or international banking fees. Plus, there's no need to share personal banking information, which makes it more discreet. Bitcoin can also be used to buy digital collectibles and NFTs (Non-Fungible Tokens), which represent ownership of unique digital items like art, music, or virtual real estate. Collectors can own, display, and trade these digital assets just like physical collectibles. 

Cross-border payments

Bitcoin can facilitate faster and more cost-effective cross-border payments compared to traditional methods, which often involve higher fees and lengthier processing times. With Bitcoin these transactions can be made quickly and securely, bypassing traditional banking systems. If you run a business with international operations, Bitcoin can streamline payments to suppliers, employees, and other stakeholders across borders, saving time and money. Likewise, if you have family and friends in other countries, it can be used to make quick remittances.

But perhaps of most interest to those seeking raise high-value finance, Bitcoin can be used to help high-net-worth individuals facilitate international transactions such as real estate purchases, allowing them to buy property in different countries without the hassle of exchange rates, high bank fees, or delays in processing international wire transfers. It can also help those interested in investing in foreign markets such as foreign stocks, bonds, or other assets, without the need for intermediaries, reducing transaction costs and offering faster trading potential. It’s a great way to purchase luxury items from around the world.

Investment diversification 

Bitcoin is increasingly becoming a valuable asset for those looking to diversify their investment portfolio. It has shown a low correlation with traditional asset classes like stocks, bonds, and commodities. This means it may be able to help reduce overall portfolio risk by providing a hedge against market volatility. Bitcoin's limited supply also makes it an attractive option for investors looking to protect their wealth from inflation. Unlike flat currencies, which can be printed in unlimited quantities and usually decrease in value as supply increases, Bitcoin supply cannot be increased beyond it’s predefined limit of 21 million coins.

Lending collateral 

Bitcoin can be a useful asset when it comes to securities-backed lending. By using your Bitcoin holdings as collateral, you can leverage the value of your currency whilst retaining ownership of it. These transactions are typically processed within 2-3 working days, offering a quick and efficient way to access the cash you need. In this way you can still potentially benefit from any possible future rises in the currencies value, and avoid any tax liability that might result from their disposal.

Philanthropy and charitable donations

Bitcoin allows donations to be made quickly and securely, often with lower transaction fees than traditional methods. Because of this, many nonprofits and charitable organisations are now accepting the currency to take advantage of these benefits. Platforms like The Giving Block, Bitdonate and Engiven help facilitate crypto donations for various causes. According to The Giving Block, which helps nonprofits raise donations from modern philanthropists, the total amount donated through their platform reached $2.4 million on Crypto Giving Tuesday alone. 

Islay Robinson, CEO of Enness Global, added, 'We have seen enquiries regarding crypto-backed finance steadily increase throughout 2024 as digital currencies become more mainstream and accepted by the broader financial sector. Using high-value assets, such as stocks or bonds, as collateral to support lending is a well-established market practice. So it is perhaps unsurprising crypto can now be used in this way. But perhaps what is more surprising is that for many this practice is not always considered as an option versus traditional finance raising, which is why I’m very keen to publicise our capability to assit in this space'.