2019-1-25 16:49 |
Bitcoin bull Mike Novogratz’s crypto merchant bank Galaxy Digital is raising at least $250 million to offer loans in USD to crypto firms looking for cash, reported Business Insider on Jan. 25.
According to people familiar with the matter, borrowers will get loans by using cryptocurrencies, buildings, and even cryptocurrency mining hardware as collateral.
The firm is looking forward to closing the first round of funding in March.
Galaxy Digital has not yet issued a comment on the fund.
Borrowing demand is highThe merchant bank is already using its own balance sheet to lend to crypto firms.
Galaxy Digital has previously backed crypto lending platforms through its investment arm Digital Galaxy Ventures and led a $52.5 million fundraising round for BlockFi, a New York-based startup.
The cryptocurrency market has seen prices decline since the beginning of 2018.
The price of Bitcoin, the world’s most popular cryptocurrency has fallen by more than 80 percent while the entire market has lost a huge portion of its value.
As a result, a high number of crypto firms are in dire need of funding.
Miners, the entities that validate transactions and mint new coins on the blockchain protocols, have been hit hard by the price declines as they rely on high cryptocurrency prices to realize profits.
Some of these companies have been forced to lay off their staff or close shop altogether.
The bear market also affected companies that raised funding by selling digital coins as they have struggled to raise additional funding.
This type of borrowing is good for HODLers or miners who may need to have fiat currency to settle their expenses without liquidating their digital assets.
Lenders to these companies, naturally, have witnessed a surge in demand.
BlockFi launched its crypto-backed lending platform last year, and its revenue has grown 10-fold since June, according to BlockFi’s CEO, Zac Prince.
Driven by this growth, the company plans to offer more products during the year and a savings account where clients are able to earn interest on their crypto stake.
Another crypto lending platform, Salt Lending has already employed 85 people to date and is planning to increase its workforce by 25 percent this year.
The firm issued $52 million in loans last year.
Galaxy Digital needs to diversify its income streamsGalaxy Digital, just like many crypto firms is in need of more income streams due to losses suffered in 2018.
In the first nine months of last year, the merchant bank suffered losses of almost $136 million mostly due to bad bets on Bitcoin, Ether, and XRP.
“While we continue to improve and strengthen our trading business, lack of overall trading volume in cryptocurrencies has been a headwind,” said the firm in a filing.
Mike Novogratz’s Galaxy Digital Is Raising a $250 Million Credit Fund for Crypto Firms was originally found on Cryptocurrency News | Blockchain News | Bitcoin News | blokt.com.
Similar to Notcoin - TapSwap on Solana Airdrops In 2024
Emerald Crypto (EMD) на Currencies.ru
|
