Cryptocurrency lenders riding high on the bearish Bitcoin [BTC] wave
Bitcoin’s bear market which stormed through 2018, eclipsing the highs of the previous year has led to several crypto ventures shutting-up-show. However, lenders in the crypto-realm have not budged, in fact, they have spurred, as per a report from Bloomberg on January 2.
Cryptocurrency creditors have noticed an increase in their services from two factions of the market. Firstly, from investors who are hoping for a price increase and do not want to sell their cryptos in the current bear market and secondly, from large-scale players which want to borrow cryptos to short-sell.
Both sides of the prediction spectrum are being served by these cryptocurrency lenders, those who predict a rise and are looking to hoard and those who expect a further drop.
BlcokFi, the crypto lending company which saw a $52.5 million investment by crypto-enthusiast Mike Novogratz’s Galaxy Digital Ventures has grown tenfold since mid-2018. Zac Prince, the CEO of BlockFi said, “It’s a low-risk type of lending, assuming you are able to manage that liquidity and track the volatility.”
Lenders in this industry only rose to prominence in 2017 allowing investors to borrow fiat without selling off their cryptocurrencies. Michael More, the CEO of Genesis Capital said, with reference to last year’s constant downtrend, “The bear market has certainly helped — at least has fueled the growth.”
Moro adds that Genesis has been, “profitable from day one,” and is now issuing $700 million of loans. Their loans outstanding are worth $140 million with a six-week average duration. They further want to expand their workforce to double its current capacity and want to expand to the Asian market. He concluded, “We’ve certainly proven that there is market demand, that there’s product fit and that it’s time to invest even more in this side of the business.”
Other crypto-centric companies have been forced to cut costs to balance the decline prices of the cryptos. Steemit, the decentralized social media platform laid off over 70 percent of its staff. ETCDEV, an Ethereum Classic development was forced to exit the market citing financial difficulties and ConsenSys, the Ethereum-start-up incubator was also forced to ‘reorganize.”
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