Reports indicate that Galaxy Digital is looking to raise $250 million to fund loans to cryptocurrency companies.
Cryptocurrency Bank Set for Fundraising Round
According to Business Insider, the cryptocurrency bank wants to cryptocurrency-collateralized US dollar loans to companies operating in the industry. Anonymous sources reportedly familiar with the project say Galaxy will accept crypto-assets as well as mining hardware as collateral for the loans.
The reports also indicate that Galaxy Digital will close the first round of fundraising for the project in March 2019. Sources say the bank’s asset management arm will be responsible for offering the loans to cryptocurrency firms.
The move represents a continued expansion of the crypto bank into the crypto lending market. Galaxy Digital already offers loans to cryptocurrency firms from its balance sheet.
Crypto Lending Growing in Popularity
This announcement though unconfirmed comes at a time when crypto lending appears to be . The 2018 bear market appears to have left startups cash-strapped an in need of capital infusion thus providing market opportunities for loan providers.
BlockFi, a Galaxy-backed crypto lending platform reportedly saw its revenue and customer base grow ten-fold. Salt Lending, another company operating in the crypto lending arena is also reportedly planning to expand its workforce based on its increasing revenue stream.
Earlier in the year, Bitcoinist that crypto lending firms are enjoying significant success by catering to both sides of the trade.
Galaxy Digital Pushing on Despite Bear Market
Galaxy Digital like the rest of the market endured a difficult 2018, with its prolonged bear market. Company founder and former Goldman Sachs executive, Mike Novogratz commented last November on the of building a successful business during a bear run.
Back in November 2018, the company a net loss in Q3 2018 to the tune of $76.65 million. According to reports at the time, this figure put the bank’s total 2018 loss as at September 2018 ending to over $175 million.
Even with poor financial performance, the bank continues to invest in businesses across the industry. Last week, Bitcoinist that Galaxy Digital participated in the $20 million Series B fundraising round for blockchain startup firm Symbiont that’s looking to bridge the gap between capital markets and cryptocurrencies.
What do you think about the increasing popularity of crypto-collateralized loans even in the midst of the cryptocurrency bear market? Let us know your thoughts in the comments below.
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Published at Mon, 28 Jan 2019 12:00:04 +0000
