Digital assets are entering the lending industry faster than ever before. Within this ever-growing industry, crypto lending pioneers like Celsius Network, Cred, and Genesis Capital are challenging traditional financial institutions with their attractive rates of return, liquidity, as well as their ease of transfer and verification.
By the end of Q4 2019, the crypto lending market reached a monumental lifetime lending originations record of $8 billion, a record that was quickly surpassed as the market shot past $10 billion in mid-May, said Credmark’s Crypto Credit Report.
Just as Sarson Funds reported on the doubling of the crypto hedge fund industry AUM last week, Genesis Capital, a leading crypto lending institution, also doubled their loan origination record this quarter as they marked the $2 billion milestone in loan originations.
Cred meanwhile, founded in 2018 by PayPal veterans Dan Schatt and Lu Hua, offers both a basic 4% annual percentage rate (APR) on Bitcoin, with the option to increase to 8% APR by staking Cred’s utility token, Lend Borrow Asset (LBA).
Celsius Network, another leading crypto lending platform, is also enjoying the growth surge of digital assets. Celsius is revolutionizing the crypto lending industry, providing their investors with 80% of the interest they generate from holding investor coins on the company platform.
According to Forbes writer Leeor Shimron’s article on the growth and potential of the crypto lending industry, centralized finance institutions like Genesis Capital and Celsius are laying an important groundwork for the future of the cryptocurrency ecosystem as they allow their users to receive up to 10% APY on their holdings with the firms, compared to the 0.1% returns investors would receive by holding their savings in traditional financial institutions. The attractive rates that industry pioneers like Genesis and Celsius offer will continue to attract an influx of new users into the crypto network as commercial banks continue offering low rates while the world bounces back from the economic contractions inflicted by COVID-19.
Reports from these companies are showing increased adoption and trust in the cryptocurrency market as a whole beyond Bitcoin. Extending upon Sarson Funds’ article on the findings of The Tokenist regarding increasing rates of crypto acceptance and trust, Genesis Capital’s Head of Institutional Sales Dan Torrey reported, “In January 2019, our loan book was at least 70% Bitcoin. Today, it is less than 50%. That doesn’t mean there isn’t demand to borrow Bitcoin, it just means there has been greater growth for other assets like Ethereum, Ripple, Zcash, and others.” The trends Genesis is witnessing is telling of a widespread industry trend of greater acceptance and trust in the ethos of financial freedom that all cryptocurrencies share.
For more on how the crypto lending industry is revolutionizing the financial world, check out Shimron’s Forbes article on the growth and potential of lending companies, here.
By Jahon Jamali, CMO
Disclosures: Not investment advice. It should be assumed that Sarson Funds or its affiliated managers hold positions in all projects that are discussed. It is not possible to invest in any project directly through Sarson Funds, Inc. or its affiliated managers. Any investment product offered by managers affiliated with Sarson Funds should be assumed to be only available to Accredited Investors and subject to the individual terms and conditions of that offering including but not limited to those eligibility requirements associated with U.S. Securities Regulation D, section 506c. Talk with your financial advisor before making any investment decisions or have them contact Sarson Funds directly at info@sarsonfunds.com
