Cryptocurrency credit firms are registering booming business following an increase in demand for their services. Despite the Bear cycle, the lenders to Cryptocurrency investors have been able to benefit from institutional and retail investors demand. In the first case, institutions are becoming increasingly interested in Digital assets for short selling and other purposes. In the second instance, hardcore Crypto enthusiasts are leveraging on the bear market to borrow and expand their portfolios.
The Demand For Cryptos Is Rising Exponentially
Many experts had feared that the freefall in Crypto markets could discourage new investors and compel existing investors to sell off their Digital Assets. However, the opposite is happening where more retail investors are gaining trust in this nascent industry and hence use their Cryptos as collateral instead of disposing of the assets. This class of investors is anticipating a rebound and a greater growth rate for Cryptos which is a powerful factor to allure more individuals and higher purchases.
As for institutional investors, investing in Cryptos is vital for the going concern and the rebalancing of books if the Crypto markets stabilize or appreciate. Therefore, these firms use their Digital assets to borrow funds for various reasons such as business capital formation, debt settlement, Crypto portfolio diversification, etc.
Cryptocurrency Industry Has Been In On A Downward Spiral, But Stability Is Returning
On November 24th, Bitcoin Cash Hard fork resulted in the creation of two coins-Bitcoin Cash Santoshi Version and Bitcoin Cash ABC Tokens. The chaos surrounding the upgrade plunged the whole markets into a bear cycle that has is now retracting albeit slowly. Further, around September 2018, the suspension of plans to launch a Goldman Sachs Bitcoin trading desk had rattled the markets and eroded gains that had been made in the prior short-term.
However, from the beginning of 2019, trends are already looking upwards with big gainers such as Ethereum, and EOS surging by more than 5% in the last 24 hours. Other Tokens such as BTC, XRP, BCH, Dash, etc. are also bullish with gains of at least 1% in the last 24hours.
Cryptocurrency And Blockchain Industry Negatively Affected Except Cryptocurrency Lending
The impact of the bear run has been dire for Blockchain companies such as mining chip makers who have had to adjust to cope with the low value of Cryptos by restructuring. In some instances, employees have been laid off, projects have been postponed or abandoned indefinitely, and some companies have closed altogether.
Meanwhile, it has been business as usual and more for Cryptocurrency lenders. This section of the Cryptocurrency industry offers clients the opportunity to use Digital Assets as collateral for fiat money. It allows borrowers to partake in a number of investment decisions such as Buying Cryptos and raising capital for various needs. It also reduces selloff pressures in Crypto markets thus easing downward bear pressures.
Some of these Cryptocurrency lenders are BlockFi, SALT, and Nexo that are currently planning to widen the scope of their services. For example, SALT is looking to expand to 35 states by opening up 20 new locations. The long-term goal is to cover all the US states according to the CEO-Bill Sinclair.