BitGo Prime, the institutional-focused trading service of Crypto wallet and custodian BitGo, has partnered with Clear Hedge Capital for an institutional lending platform fully dedicated to cryptocurrency.
This collaboration will enable deep-pocket players to borrow using popular digital assets through originating and underwriting crypto-backed wholesale cash loans of $10 million and above. The demand side would include hedge funds, market makers, trading houses, OTC providers, crypto lending firms, and exchanges.
Clear Hedge, which is majority-owned by UAE-based conglomerate Gawah Holdings, targets institutions and mining groups who seek to post digital-currency as collateral with longer borrowing time horizons.
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The use cases mentioned by BitGo Prime and Clear Hedge tells us that the lending trends are shifting to reflect a reliance on digital assets to support business’ operations rather than only betting on short term prices moves. Specifically, the recent data shows substantial interest from the institutional players to borrow in order to facilitate a specific strategy such as for shorting, arbitrage or working capital purposes.
Investors Will Also Be Insured up to $100 Million
“This provides an opportunity to offer a lending service that was not previously available to institutions. We are excited to see how this partnership with BitGo enables Clear Hedge to bring traditional credit investors into this new asset class,” said Clear Hedge Founder and CEO, Richard Tan.
BitGo Prime is led by Nick Carmi, who previously held roles across the mainstream finance world, including at Deutsche Bank, Barclays and Lehman Brothers, among others. The prime broker connects investors with several exchanges through a single gateway and lets them trade directly from the cold storage services that BitGo has been building since 2013. Investors will also be insured by BitGo’s policy, ensuring an additional layer of protection.
BitGo already allows its users to cover up to $100 million worth of their digital assets held in their accounts with the blockchain security firm. The company’s patent multi-signature wallet technology has attracted institutional players because it offers an enterprise-grade custody service for their assets as well as application programming interface access to its underlying security platform.