Loans backed by crypto assets and their liquidity promise

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Galaxy Digital


Salt Lending (SALT)

Genesis Capital


Sweetbridge (SWC)

MoneyToken (IMT)

Key concepts

Crypto Bear Market

Crypto Loan Company

Crypto Lending Market Place

Bitcoin-backed loan platforms

  • As a result of the crypto bear market in 2018, many crypto-based companies are illiquid. Among these companies are crypto-mining firms and startups which raised funds in the form of digital coins.
  • Most crypto holders don’t want to sell their digital tokens at these depressed prices and are expecting a rebound in the market.
  • There is a new breed of startups: crypto loan companies, which aim at providing liquidity to the crypto market space.
  • These companies extend loans to individuals and companies in the form of a fiat currency and require crypto assets as collateral from the borrowers.
  • Some of the leading companies in this space: Galaxy Digital, BlockFi, Salt Lending, Genesis Capital, Aave, Sweetbridge and MoneyToken.
  • The interests rates on these crypto loans range between 10% to 20%.
  • The term length extends from weeks to 36 months depending on the creditor company.
  • To hedge against the liquidity volatility in the crypto market, these crypto loan companies usually demand a higher collateral. For example, a 1-0.35 ratio to hopefully prevent themselves from getting burned if prices fall drastically.
  • The 2018 crypto bear market seems to have boosted this kind of business as some companies have grown 10-fold such as BlockFi. Others are set to receive huge funding in 2019 with $250 million earmarked for Galaxy Digital alone.



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