Lenders Earn On Cryptocurrency Market Crisis — Bloomberg
Creditors who operate in the field of digital currencies, succeeded to increase revenues due to the decline of crypto market in the second half of 2018, Bloomberg reports.
Lending has remained barely the only industry that experienced significant demand last year, and was not affected by massive layoffs, lack of funding, nor did it shut down.
Loans are most popular among traders with debts, who do not want to sell cryptocurrency at a low rate. Also, large investors who borrow for short sales are regular customers of lenders. Thus, companies benefit from both sides — the one that believes in the future crypto market recovery, and the one that is confident in its further long-term collapse.
It is noted that the income of a loan startup BlockFi has increased ten times since June 2018, with more traders starting to use the service. Recently, Novogratz’s and Pompliano’s firms have invested in the project.
Another crypto project, Aave, which manages an online loan service ETHLend, has recently opened an office in London and is going to expand into the US market. Also, a startup called Salt Lending, which previously consisted of 80 people, each month hires a number of new employees thanks to the increased profits.
According to Michael Moro, the head of a crypto loan company Genesis Capital, the downtrend in the digital currency market has fueled the growth of its industry. The firm has already issued loans worth $700 million, and the total amount of outstanding loans, given by company, is $140 million. Genesis Capital allows traders to borrow cryptocurrencies in exchange for US dollars.