The cryptocurrency bear market has reached its savage claws into nearly every corner of the crypto industry, tearing down everything from mining to token sales. However, Bloomberg has reported that one small piece of the industry has managed to thrive in the midst of the bloodbath: lending.
According to the report, creditors who have targeted cryptocurrency users have found “strong demand” from crypto hodlers who are reluctant to sell their coins at low prices as well as investors who want to stock up on cheap coins for short sales.
When it Comes to Lending, the Bull Market is Good, But the Bear Market is Better
“It’s putting lenders on both sides of Bitcoin’s bust: Helping believers pay their bills while awaiting a rebound, and also enabling bets by people who think the drop has further to go,” the report said, adding that some crypto lending companies even appear to be doing better in the bear market than they did when the market was bullish.
One of these lenders, BlockFi, has reported that both its revenues and customer based have increased to the tune of 100 percent since June when Galaxy Digital Founder Mike Novogratz invested $52.5 million in the company. The company lends fiat currency to clients that deposit their cryptocurrencies. Zac Prince, the company’s CEO, said that the practice is a “low-risk type of lending,” and claimed that the company has never suffered any principal losses.
Salt Lending, another lending company, said that it’s adding new employees to its 80-person team every month; the UK-based ETHLend is preparing to expand its presence in the US and is “nearing profitability.”
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— Aave (@AaveAave) February 17, 2018
Genesis, a lending company that launched at the end of Q1 2018, has reportedly issued $700 million in loans, and currently has roughly $140 million in outstanding loans. “We’ve been profitable from day one,” CEO Michael Moro told Bloomberg. “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.”
— Genesis Capital (@Gen_Capital) October 18, 2018