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Cryptocurrency-While most of the cryptocurrency investment base continues to regress from the 2018 bear cycle, which saw Bitcoin fall by more than 60 percent and the altcoin market collapses further, cashiers and bets on debt still managed to come forward.
According to a recent relationship from Bloomberg, creditors who target cryptocurrency providers have found a booming market despite the otherwise abysmal price for token prices. Demand is driven by investors and cryptic companies who fear to sell before the next rally, or who look at the current intermediate value of depressed coin prices as a buyer's opportunity,
Lenders who focus on the crypto arena say they find strong demand from borrowers who do not want to sell their virtual coins at low prices, as well as from big investors eager to borrow coins for short sale. He is putting creditors on both sides of the Bitcoin bust: Helping believers to pay their bills while waiting for a rebound, and also allowing bets from those who think the drop should still go.
The Bloomberg report continues to profile two cryptocurrency providers, BlockFi and Salt Lending, which have expanded despite the downward trend in the evaluation of cryptocurrencies. BlockFi, which received a $ 52.5 million investment from Mike Novograt & # 39; z Galaxy Digital Ventures, reports that its customer base has grown 10-fold since June. Aave, the group behind ETHLend, a cryptocurrency loan market, has recently opened an office in London with the intention of entering the US market in the near future.
While most of the cryptocurrency providers have been established since 2017, their practices have changed in the last two years with the transition from a bullish to bearish market. Initially, lenders provided a source of money for investors and crypts-companies feared to sell their stock of coins while market prices continued to rise. With the collapse of the value of the token in 2018, lenders have now provided a source for the loan of currency in exchange for money.
Michael Moro, CEO of Genesis Capital, told Bloomberg in a telephone interview that the bear market has helped its industry,
"The bear market has certainly helped – at least it has fueled growth"
Genesis Capital, which lends currencies to US depositors, has already issued $ 700 million in loans since March 2018. It reports about $ 140 in outstanding loans for an average term of six weeks. Moro reports the intention of doubling his staff over the next few years, and shares some additional insights into the profitability of his business,
"We have been profitable from day one," said Moro. "We have certainly shown that there is a demand from the market, that there is a suitable product and that it is time to invest even more in this part of the company".
The owners and companies outlined in the Bloomberg piece seem to have the impression that their business is at low risk, despite its interaction with the highly volatile cryptocurrency market. In addition, lending companies offer flexibility to investors in both the bear and the bear market, allowing the encrypted croupiers to hold their own currencies during price increases while allowing for rapid accumulation of currencies during periods of depressed prices.
However, while traditional investors have been disappointed by the prices of currencies in the current bear market, lenders have been able to capitalize.
"Everything flies in the bull market, but the real magic happens when it does well in a bear market," said Aave CEO Stani Kulechov in a telephone interview. "The encrypted loan model is one of the rarest."
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