The ongoing crypto winter has meant that many businesses are struggling for funding. Some have resulted in shutting down while others lay off staff. However, one section of the industry is thriving; crypto lenders.
Crypto lenders that are focused on the crypto industry say that they are finding strong demand for their services from individuals that are not willing to sell their crypto coins at depressed prices. Also, there is demand from big investors that are eager to borrow coins for short selling.
The Bear Market Has Been Good For Crypto Lenders
It’s easy to see why crypto lenders are currently in demand. They are helping the true believers pay their bills as they wait for the market to turn. Also, they are enabling bets from individuals that believe the market has further to drop.
BlockFi is one such lender whose revenues and customer base has grown 10-fold since Galaxy Digital Ventures invested $52.5 million last June.
Another is Aave which owns ETHLend a crypto-lending marketplace. Business is so good the company has just opened an office in London, and there are plans to enter the U.S market.
Many of the existing crypto lenders set up shop in 2017. At first, they offered enthusiast a way to borrow cash without having to sell their prized virtual assets which at the time many expected would even soar higher.
In 2018, the crypto market crashed hard. However, crypto lenders still managed to find new roles that helped them thrive. As these businesses are finding out, they can even fare better during the bad times than good.
According to Michael Moro of Genesis Capital, a crypto lending firm, the bear market has helped fuel the growth for these businesses.
Genesis was launched last year in March to help Institutional investors to borrow crypto coins by depositing U.S dollars. Speaking to Bloomberg, Moro said the company has already issued $700 million in loans.
Also, it has about $140 million in outstanding loans that had an average duration of six weeks.
The company now plans to double its staff this year and also expand into new territories like Asia.