BlockFi Raised $52 Million For Loans To Crypto Holders
Because of the volatility associated with cryptocurrency prices, particularly because of the difficulty in valuation, investors are often concerned about when to buy and sell them. An American crypto lending startup, BlockFi, has successfully raised a little over $52 million in a recent funding round.
This funding round of $52.5 million received its largest contribution from Mike Novogratz’s Galaxy Digital firm. BlockFi will be using these funds to grant retail and institutional clients loans, by keeping cryptocurrencies such as Bitcoin and Ethereum as collateral in exchange for the loan.
Launched a few months ago by Zac Prince, BlockFi, raised $1.55 million from ConsenSys and other interested firms in a smaller funding round earlier this year.
The crypto loan firm currently operates in 35 states in the United States and ensures a low risk of lost consumer funds by allowing the fully licensed Gemini platform to take control of the deposited cryptocurrency. Through this company, investors can take loans as high as $10 million.
With the money raised through this new funding round, BlockFi plans on expanding into other states and internationally as well. The company also wants to use these funds to release new products and provide support for other cryptocurrencies. Zac Prince also told Business Insider that fixed-income, debt investments and credit cards are potential business avenues for BlockFi in the future.
Prince, himself started investing in cryptocurrency in 2016 and when he was looking for a loan, he decided to find something in relation to his crypto investments. He said,
I realized that there was no debt or credit outside of [person-to-person] margin lending on a few exchanges and I had the feeling that this was a big opportunity that I was well-suited to go after.
This served as a lightbulb moment for him and led to the inception of the company.
Mike Novogratz commented on his investment in BlockFi. He said,
A robust lending market is the keystone for financial systems and BlockFi’s institutional approach and deep lending expertise were key drivers in our decision to partner with them.
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