Two Prime Sees $2 bn in Demand for BTC-Backed Loan
Cryptocurrencies have shown resilience, with the market value of all cryptocurrencies doubling to $1.3 trillion this year, recovering from last year’s crash.
The renewed interest in centralized crypto-collateralized finance has also been impressive, with about $2 billion in demand for bitcoin-secured loans since the soft launch of lending offerings on September 13.
Crypto-backed fiat loans are preferred during bullish market trends as rising prices boost the value of the collateral, allowing miners or investors to keep their crypto holdings while sourcing additional fiat money to fund operations and yield-generating strategies.
Crypto-backed platforms like BlockFi, Celsius, and Voyager saw tremendous growth during the 2020-21 bull runs before the crypto market crash exposed the lack of proper risk prevention measures at these lending giants.
Two Prime is well-positioned to fill this gap, with about 85% of fiat loans extended so far being collateralized by bitcoin, while the rest are secured by ether and other larger alternative cryptocurrencies.
(With inputs from Shikha Singh)
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