Cryptocurrency lender Dydx advanced a total of $1.14 billion in digital asset loans over the past 12 months. But about 70% of the money was borrowed in just two months, February and March, as coronavirus-linked volatility triggered a frenzy of borrowing among investors.
Monthly volume remained below $100 million in the nine months to January but rose sharply between February and March to about $300 million and $400 million, respectively, the latest data from the company shows. More than $100 million worth of loans have been lent out so far this month, indicating a steep decline in investor appetite to borrow.
Cryptocurrency prices fell sharply during this period as coronavirus lockdowns sent markets crashing throughout the world. Ethereum, a dominant currency of exchange on Dydx, dropped below $100 at the time but has since recovered to above $180.
About 45% of the total loan portfolio, or $516.64 million, is denominated in ether while 33%, or $378.67 million, comprises dai loans. USDC loans account for the remainder of the equivalent of $128.08 million.
The decentralized margin trading exchange did not detail the type of borrowers it lent to or how they utilized their funds. However, with such market volatility, investors typically try to hedge derivative investments or bet on the direction of certain cryptocurrencies.
Antonio Juliano, the founder of Dydx, said traders scrambled to use his margin trading facility as coronavirus volatility reached a fever pitch, according to media reports. But that has since started to decline because volatility had slowed down, he said.
Dydx is a decentralized exchange for margin trading. It operates on the Ethereum Blockchain, allowing users to trade, borrow or lend three digital assets — ether, dai and USDC — with leverage of up to 4x. Cryptocurrency loans are emerging as an increasingly viable alternative to borrowing fiat.
What do you think about cryptocurrency borrowing during covid-19? Let us know in the comments section below.
The post Dydx Processed $1.1 Billion Cryptocurrency Loans in 12 Months — 70% in Just 60 Days appeared first on Bitcoin News.
Bitcoin.com is author of this content, TheBitcoinNews.com is is not responsible for the content of external sites.
Our Social Networks: Facebook Instagram Pinterest Reddit Telegram Twitter Youtube
