Known as the leader in cryptoasset lending to USD, BlockFi recently announced the first institutional investment in loans backed by cryptoassets. This came in the form of $52.5 million from the blockchain tech and digital currency investment firm Galaxy Digital Ventures LLC. The investment from Galaxy Digital Ventures is designed to expand BlockFi’s operations. This historic investment should encourage other financial institutions to join Galaxy Digital Ventures in its choice to take part in various crypto investing strategies.
How the Investment Will Be Used
As mentioned, the investment from Galaxy Digital Ventures will go toward the expansion of BlockFi. Specifically, this is a step toward BlockFi’s ability to offer large-scale credit throughout the crypto ecosystem.
In the past, loans from BlockFi have helped clients make a range of investments, including paying off higher-cost debts, diversifying to make traditional investments, start businesses, or buy real estate. There has already been a high demand for low-cost USD loans that leverage Ether and Bitcoin. The investment from Galaxy Digital Ventures should let BlockFi expand this to support more cryptocurrencies and reach more markets, helping even more people secure the loans they need.
Why Galaxy Digital Ventures Chose BlockFi
Galaxy Digital Ventures chose to lend to BlockFi over the other available projects partly because of its extensive lending expertise combined with its institutional approach. BlockFi stands out from other USD loans backed by cryptoassets by being the most affordable yet fastest option. Early clients left overwhelmingly positive reviews, further encouraging Galaxy Digital Ventures’ choice of investment. Additionally, team members at Galaxy Digital Ventures have said that they feel the regulatory approach, risk management viewpoint, and marketing capabilities of BlockFi set it up to become the market leader, encouraging the company’s choice of investment.
How BlockFi Is Different from Other Cryptoasset Lenders
There are other cryptoasset lenders in the market. However, BlockFi stands out from the crowd by delivering the benefits you expect from an institution without sacrificing its ability to offer the lowest rates you can find for crypto-to-USD borrowing. BlockFi has already proven itself by having the most lending licenses for individual states out of the competition.
BlockFi had also already taken steps to incorporate more banking and fintech veterans into the team prior to this investment from Galaxy Digital Ventures. In May, one of the former Bank of America Merrill Lynch managing directors, Rene van Kesteren, became chief risk officer for BlockFi.
The New Partnership
This investment marks the beginning of a new partnership between BlockFi and Galaxy Digital Ventures. By working together, the two companies have hopes of inspiring other financial institutions to consider various crypto investing strategies. Additionally, Galaxy Digital Ventures’ choice to invest in only BlockFi instead of distributing its investment will help BlockFi provide credit on a much larger scale across the entire crypto ecosystem.
To solidify the new partnership formed from the investment, there is a new addition to the BlockFi Board of Directors: Galaxy Digital Ventures’ head of principal investments, Chris Ferraro.