Mike Novogratz’ crypto merchant bank, Galaxy Digital, has announced that it is the leading contributor in a $52.5 million fundraising round for BlockFi, a crypto lending startup. The company raised its funding over two rounds, the first bringing in a total of $1.55 million in February. Top contributors in the initial round were Kenetic Capital, Consensys Ventures, and SoFi.
The young company, which is based in New York, offers lending products and services to both corporate and retail customers. Business Insider reports that BlockFi’s loan book is “in the millions.” The company also reportedly has plans to expand across the US and into the international market, and to add more cryptocurrencies to its roster.
— Michael Novogratz (@novogratz) July 24, 2018
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BlockFi’s Crypto Lending Platform Allows Users to Keep their Crypto
According to BlockFi president Zac Prince, the company is also interested in opportunities in lines of credit and credit cards, as well as fixed-income and debt investments.
BlockFi currently offers investors the ability to use BTC or ETH as collateral to borrow up to $10 million. The idea is that the investors can gain access to fiat without having to sell their cryptocurrency completely. “That lets investors retain ownership of their crypto and not miss out on the next potential price surge, but also have cash on hand to pay employees or go on a vacation, for instance,” Business Insider explained.
Loans are offered with a 12 percent standard interest rate, which seems to be on par with the lending rates of other crypto lending platforms.
”A Herd of Institutional Investors” is Coming for the Blockchain Space
Galaxy Digital has made a number of large, high-profile investments over the past several months. In June, the bank dropped $35 million and $15 million into High Fidelity and Alpha Point, respectively. A number of the bank’s investments in the cryptocurrency market have not been publicly disclosed.
Despite the long-standing doldrums that the cryptocurrency markets have been stuck in since the beginning of the year, Mike Novogratz remains optimistic about the future of the industry. Last week, during his keynote speech at Korea Blockchain Week, Novogratz said that “a herd of institutional investors” is headed for the crypto markets.