Crypto Lenders Are Cashing In on the Crypto Bear Market
Lenders in the cryptocurrency industry are supposedly weathering the recent crypto bear market better than others, Bloomberg reported on Jan. 2.
As per Bloomberg, creditors that provide their services in the cryptocurrency industry are “finding strong demand from borrowers who don’t want to sell their virtual coins at depressed prices, as well as from big investors eager to borrow coins for short selling.”
Bloomberg publishes that revenue of the crypto lending company BlockFi has grown tenfold since June, after which Michael Novogratz’s company Galaxy Digital Ventures invested $52.5 million in the firm.
The company lends fiat currency to clients that deposit digital currencies. BlockFi’s CEO, Zac Prince, said that “it’s a low-risk type of lending,” after mentioning that the company “never had a loss of principal.”
Michael Moro, the chief executive officer of Genesis Capital, a company that permits users to borrow crypto in exchange for dollars, supposedly said in an interview that “the bear market has certainly helped, at least has fueled the growth.”
As Cointelegraph stated in October, Genesis processed $550 million during its first six months of activity. Now, Moro supposedly said that Genesis has published $700 million in loans and has about $140 million in loans outstanding with an average duration of six weeks.
While other companies in the crypto space have been contemplating layoffs, Genesis is now supposedly planning to more than double its staff to 12 people, and expand to Asia. Moro mentioned in an interview with Bloomberg:
“We’ve been profitable from day one. 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.”
Accompanying the crypto market crash in November 2018, decentralized social media podium Steemit had to lay off more than 70 percent of its staff and begin structural reorganization. The drop in markets resulted in a reduction in fiat currency returns from the company’s automated STEEM token sales.
Cryptocurrency mining giant Bitmain and major crypto exchange Huobi have also supposedly confirmed plans to lay off staff as “crypto winter” endures.