Reports say Galaxy Digital is looking to raise $ 250 million to fund loans to cryptocurrency companies.
Set of cryptocurrency bank for fundraising cycle
According to Business intern, the cryptocurrency bank wants offer Cryptocurrency-backed US dollar loans to companies operating in the industry. Anonymous sources who are said to be familiar with the project claim that Galaxy will accept the cryptoassets as well as mining equipment as collateral for the loans.
Reports also indicate that Galaxy Digital will close the first fundraiser for the project in March 2019. Sources indicate that the bank’s asset management arm will be responsible for offering the loans to cryptocurrency companies.
This move represents a continued expansion of the crypto bank in the crypto lending market. Galaxy Digital already offers cryptocurrency business loans from its balance sheet.
Crypto loans are growing in popularity
This announcement, while unconfirmed, comes at a time when the crypto loan appears to be gaining popularity. The 2018 bear market appears to have left startups strapped for cash and in need of a capital injection, providing market opportunities for loan providers.
BlockFi, a Galaxy-backed crypto lending platform, has reportedly seen its revenue and customer base increase tenfold. Salt Lending, another company operating in the crypto lending arena, is also reportedly planning to increase its workforce based on its growing revenue stream.
Earlier in the year, Bitcoinist reported that crypto lending companies are enjoying significant success in responding to both sides of the trade.
Galaxy Digital continues despite bear market
Galaxy Digital like the rest of the market had a difficult 2018 with its prolonged bear market. Company founder and former Goldman Sachs executive Mike Novogratz commented last November on difficulty to build a successful business during a bear race.
In November 2018, the company announcement a net loss in the third quarter of 2018 of $ 76.65 million. According to reports at the time, that figure brought the bank’s total loss in 2018 in September 2018 to over $ 175 million.
Even with poor financial performance, the bank continues to invest in companies in the industry. Last week, Bitcoinist reported that Galaxy Digital was involved in the $ 20 million Series B fundraiser for blockchain start-up Symbiont that seeks to bridge the divide between capital markets and cryptocurrencies.
What do you think the growing popularity of cryptocurrency secured loans even amid the bearish cryptocurrency market? Let us know your thoughts in the comments below.
Image courtesy of Shutterstock.